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Top stock picks for June

Credit: Simon Cunningham

We asked our Foolish writers to name some of their favourite picks to buy this June and below is what they came up with.

Tom Richardson: Dicker Data Ltd (ASX: DDR)

Is a founder-led company that operates as a distributor of IT hardware from its Sydney base to businesses all around Australia and New Zealand. It has an excellent track record of growth thanks to its dominant market position and excellent management team that has heavy levels of insider share ownership.

The company is expecting to deliver 16.4 cents in dividends per share over FY17, which places it on a yield of 7% plus franking credits when selling for $2.34. It’s also forecasting more decent growth in FY17 yet trades on just 14x trailing earnings per share. A huge yield, growth, and value, you can’t ask for much more than that.

Motley Fool contributor Tom Richardson owns shares in Dicker Data.

Sean O’Neill: Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

An oxygen mask and medical equipment manufacturer from New Zealand, Fisher & Paykel ticks a lot of boxes. It has high spending on research & development, a good balance sheet, a growing market, and new products coming through that could lead to higher revenues. There is the potential to win new customers and expand to new markets, and management is also relocating more manufacturing to Mexico which is expected to result in wider profit margins.

The main drawback is price. I would take a small stake now with a view to building a larger position on any pull-backs.

Motley Fool contributor Sean O’Neill doesn’t have any financial interest in Fisher & Paykel Healthcare.

James Mickleboro: Nextdc Ltd (ASX: NXT)

Leading data centre business NEXTDC would have to be one of my favourite growth shares on the Australian market right now. The incredible rise of cloud-based software in Australia has seen demand for data centre services outstrip supply. This led to NEXTDC reporting a 32% increase in contracted utilisation and a 110% increase in EBITDA in the first half of FY17. While its shares may be expensive, I think this level of growth and its positive outlook justify the premium.

Motley Fool contributor James Mickleboro owns shares in Nextdc Ltd.

Christopher Georges: Healthscope Ltd (ASX: HSO)

The Healthscope share price has been under pressure over recent months, although I think the shares currently offer a compelling risk-reward proposition at $2 each. The market is taking a dim view on the short term outlook for the private hospital operator, although the underlying fundamentals of the sector are strong.

Encouragingly, the company’s recently appointed CEO has taken a $1 million stake, which should provide investors with some confidence that his interests will be aligned with other shareholders. The shares currently trade on 18.5x earnings and offer a dividend yield of 3.7%.

Motley Fool contributor Christopher Georges does not have any financial interest in Healthscope Ltd.

Tristan Harrison: National Veterinary Care Ltd (ASX: NVL)

National Veterinary Care is the second-largest veterinary clinic business in Australia and New Zealand. It’s utilising an acquisition strategy to grow its network, but is now slowing down whilst growing profit margins. I think over the long term this business could grow to match the size of Greencross’s veterinary business.

Management are confident in the stability of the company and expect to pay a dividend when it reports in August. The price decline of 18% over the last two months could make now a great time to buy this higher-risk company.

Motley Fool contributor Tristan Harrison owns shares in National Veterinary Care Ltd.

Rachit Dudhwala: Commonwealth Bank of Australia (ASX: CBA)

The CBA share price slumped almost 10% in May, after the 2017-18 Federal Budget introduced a new bank levy on the big banks. Morgan Stanley’s broker downgrade in late May also didn’t help CBA’s cause, as concerns over the health of Australia’s housing market weighed on the share price of Australia’s largest lender.

Nevertheless, I believe CBA’s recent price correction makes it a top stock to buy today, given the company retains one of the highest return on equity rates of the big four and remains well capitalised compared to international peers.

Motley Fool contributor Rachit Dudhwala owns shares in Commonwealth Bank of Australia.

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The Motley Fool Australia owns shares of Dicker Data Limited. 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. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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