We asked our writers to pick some of their favourite stocks to buy this August. Below is what they came up with.
Tom Richardson: Iress Ltd (ASX: IRE)
Is the fintech business that is a market leader with a narrow moat due to the complex systems services its software provides to clients. As an integrated software business its revenues are also quite sticky and importantly are recurring, which means Iress is not constantly fighting to sell new products just to keep its head above water.
At $12.90 it trades on a trailing price to operating cash flow (OCF) ratio around 23x, with a trailing 3.3% yield franked to 60%. Management is forecasting more growth in 2017 and it looks an ASX rarity in offering a classic mix of an earnings moat, scale, value, and income.
Motley Fool contributor Tom Richardson owns shares in Iress Ltd.
Tristan Harrison: WAM Microcap Limited (ASX: WMI)
WAM Microcap is the latest listed investment company (LIC) to be launched by Wilson Asset Management. This LIC's focus is getting back to the investment team's roots by focusing on the small, high-performing shares of the microcap world.
There's an opportunity to buy its shares at a smaller premium to NTA than the other WAM LICs trade at, and then potentially benefit as the premium to NTA rises. Combine that with the strong long-term performance of Wilson Asset Management and investors should be onto a winner.
Motley Fool contributor Tristan Harrison owns shares of WAM Microcap Limited.
James Mickleboro: Aristocrat Leisure Limited (ASX: ALL)
With this gaming solutions company's shares down over 10% since this time last month, I believe investors have a chance to snap them up at a reasonable price of 27x annualised earnings. Whilst this may be a significant premium over the market average, I believe it fair for Aristocrat given its performance and outlook. After all, the company delivered a 56.9% increase in first-half profit from ordinary activities after tax, thanks partly to the growing popularity of its digital games.
Motley Fool contributor James Mickleboro has no financial interest in Aristocrat Leisure Limited.
Regan Pearson: EML Payments Ltd (ASX: EML)
I think payments processing company EML Payments could surprise on the upside when it reports full year results later this month. EML Payments solves the costly problems of cash handling and money transfers for global retail and gaming companies. It also boasts a robust, easily scalable system.
I anticipate strong cash flow growth supported by growing unredeemed card credit or "accrued breakage", which has grown strongly over the last 12 months. The company is expecting to increase gross margin above the already significant 78% as higher margin products become a larger percentage of the overall business.
Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.
Rachit Dudhwala: Commonwealth Bank of Australia (ASX: CBA)
The CBA share price slumped almost 10% in May, after the 2017/18 budget introduced a new bank levy. 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 price correction makes it a top stock to buy today given the company retains one of the highest returns on equity 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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