3 Hot Stocks to Buy in August

By Markets Fool.com

Image source: TASER Systems.

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There have been some expected and unexpected winners so far in 2016. Momentum is a powerful thing, but the real challenge for investors is to figure out which are the hot stocks that will keep going.

Let's take a look at hot stocks -- investments that are trouncing the market this year by soaring at least 50% year to date -- that have what it takes to keep moving higher this month.

MercadoLibre

These are volatile times through Latin America, but the area's largest online marketplace operator is thriving in this climate. MercadoLibre (NASDAQ: MELI) posted blowout quarterly results last week. A whopping 43.7 million units were sold through its platform during the second quarter, 45% more than during the same period a year earlier. It's the dot-com darling's headiest growth on that front since 2009. There was $2 billion in gross merchandise volume sold through MercadoLibre during the quarter, representing 57% growth on a local currency basis if you back Venezuela out of the mix.

MercadoPago -- MercadoLibre's payment platform -- processed 32 million transactions, 76% ahead of the prior year. Latin America is no stranger to political uncertainty, iffy economies, and frenetic inflation, but right now MercadoLibre continues to shine through the volatility.

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Groupon

The top dog in daily deals was a bargain for investors that got in early this year. Groupon (NASDAQ: GRPN) stock has nearly doubled, up 91% year to date. The big story here has been its stateside turnaround. Gross billings rose 8% in North America for its latest quarter. That may not seem so great, but it tweaks the narrative of a flash sale provider that once seemed to be fading from relevance.

Groupon has stumbled overseas, so it's been selling off its profit-slurping international operations. It's working. Groupon boosted its top-line guidance last month, and armed with a cash-rich balance sheet, it still has a long way to go before it even approaches its 2011 IPO price.

TASER International

"What an exciting time to be at this company," TASER International (NASDAQ: TASR) CEO Rick Smith said during last week's quarterly conference call.

He couldn't be more right. At a time when police conduct is a hot topic, TASER is benefiting from the flux.

We all know about TASER's namesake stun guns, weaponry that's growing in popularity with police forces that want to embrace less-than-lethal forms of restraining violent suspects. TASER's stun gun business has grown 20% over the past year. However, the real growth story at TASER these days is Axon, its wearable camera segment and its cloud-based Evidence.com where the recorded footage is archived. Axon bookings through the first half of this year are approaching what it scored all of last year. Its Axon segment is now a bigger business than its namesake weapons.

MercadoLibre, Groupon, and TASER have treated investors well in 2016. Things may continue to heat up this summer on all three fronts.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends MercadoLibre. The Motley Fool recommends TASER International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.