Top 5 Stocks for August

Top Stock #1:
Quest Diagnostics (DGX)

I predicted that Quest Diagnostics (DGX) was poised for another round of great earnings, and I was right. In the second quarter, DGX reported a 17% profit increase thanks to a jump in clinical testing revenue. As a result, this stock posted a decent earnings surprise.

The laboratory operator earned $188.2 million or $1 per share, compared with $161.3 million or 82 cents per share last year. Revenue increased 3% to $1.9 billion. Analysts were expecting earnings of 95 cents per share on total sales of $1.89 billion, so Quest easily beat the Street.

Thanks to the company's better-than-expected results, DGX raised its full-year profit outlook for the second time this year, which is great news for investors. Demand for Quest's clinical testing services is going strong, so make sure you're well-positioned in this stock now so you can ride its upward momentum all the way to top.

This company is the leading provider of independent diagnostic testing in the U.S., and has seen very strong sales even amid weak consumer spending

Top Stock #2: Sociedad Quimica y Minera (SQM)

Sociedad Quimica y Minera (SQM) is one of my favorite stocks right now and is perfect for just about any portfolio.

A Chile-based producer of specialty fertilizers, iodine and lithium, SQM has tremendous growth potential and is in great shape to profit big-time from commodity inflation. Prices are rising for commodity fertilizers, and this is translating to higher prices for the company's specialty plant nutrients.

What's more, SQM's lithium and iodine businesses are booming right now and should continue to boost the stock's bottom line. Lithium is used in hybrid car batteries and laptops, so once consumer spending firms up this stock should generate even more explosive returns.

Top Stock #3:
Express Scripts (ESRX)

Express Scripts (ESRX) is a North American provider of pharmacy benefit management services. As this stock's recent earnings report proves, consumers are still spending a lot of money when it comes to their prescriptions — and ESRX is reaping the benefits.

Last week ESRX reported a profit of $192.3 million, or 88 cents per share — two pennies higher than the consensus — thanks to higher sales of its generic drugs. Revenue for the quarter fell slightly to $5.5 billion from $5.53 billion in the year-ago period, yet still beat estimates of $5.47 billion. Express Scripts has worked diligently to create savings for its existing customers. This strategy has helped the company to retain clients, improve margins and stay ahead of the competition.

Top Stock #4:
Apollo Group (APOL)

Apollo Group (APOL) is America's leading private educational provider, mainly through online and brick-and-mortar classes at its flagship University of Phoenix. With high unemployment in the U.S., more workers are heading back to school for retraining — and APOL is benefiting from booming sales and class enrollment.

The stock reported standout earnings earlier this month, and just as I expected, the stock beat Wall Street's estimates and posted solid year-over-year sales growth. The company said earnings soared 44% to $201.1 million or $1.26 per share, compared with $139.1 million or 85 cents per share in the same quarter a year ago.

Wall Street was looking for just $1.12 per share, so APOL beat expectations with a nearly 13% earnings surprise! What's more, the education company's sales rose nearly 26% to top expectations.

APOL is clearly at the head of its class. Buy it now!

Top Stock #5: AutoZone (AZO)

Did you know that cars are more likely to break down during the summer months because heat creates problems for car batteries, engine cooling systems and tires? Cars require a lot of extra care during the summer, and AutoZone (AZO) is the go-to place for vehicle repairs.

There's a reason that AutoZone is on my list of Top 5 Stocks again this month, and that's because the company continues to enjoy robust business growth despite the recession.

This parts supplier and auto repair company has investors salivating and waiting for a big payout as consumers hang on to their cars longer. I know I am.