We asked our contributors to pick their favorite ASX stocks to buy in March. Here are their top ideas.
Owen Raszkiewicz: Liquefied Natural Gas Ltd (ASX:LNG)
This small-cap stock is engaged in the exploration of LNG… did the name give it away? It has two key projects, one in Queensland named Fishermans Landing, which has the potential to produce 3.8 million tonnes of gas per year and the other, its flagship project Magnolia (8mtpa potential), is in Louisiana, USA.
This is a commodities explorer, which sounds risky, but what sets it apart is its very experienced management, fast tracked development, advanced technology, customer base, and huge production potential.
Currently priced around $0.33 per share, I will not be surprised if it trades above $1.00 within 12 months, with further upside potential very likely. At 100% ownership, the Magnolia project (at only 4mtpa) is forecast to have a 20-year life on an EBITDA basis of U.S. $370 million per year.
Motley Fool contributor Owen Raszkiewicz owns shares in Liquefied Natural Gas.
Ryan Newman: Amcor Limited (ASX: AMC)
The global packaging company successfully demerged its Australasian and Packaging Distribution group Orora Ltd (ASX: ORA) late last year, allowing the group to focus solely on operations in emerging economies that possess the greatest growth potential for the business.
Amcor recently reported a 21.2% increase in profit after tax for the six months ending 31 December while recognising sales growth of 18% in China, which is one of the group’s largest emerging market exposures.
The group has delivered solid returns over the last five years and a weaker Aussie dollar will see them improve for years to come.
Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.
Sean O’Neill: 1300 Smiles (ASX: ONT)
A last-minute surprise pick for March is this dental chain. Its poor results recently caused a 15% drop in the share price, which I think presents a solid buying opportunity for the growth and dividend-focussed individual.
Its lower second-half 2013 results appear unusually poor in comparison to a bumper first half of 2013 that was caused by an influx of dental work before the expiry of the government’s CDDS subsidy scheme.
With no debt, high levels of cash on hand and a keen eye for acquisitions, 1300 Smiles could be just what the doctor (or dentist) ordered for your growing portfolio.
Motley Fool contributor Sean O’Neill doesn’t own shares in 1300 Smiles.
Regan Pearson: Strike Energy (ASX:STX)
My top pick for March is Cooper Basin gas developer Strike Energy. Strike has a market cap of $84 million, but claims prospective net gas resources of up to 4.5 trillion cubic feet (tcf).
By comparison, Woodside Petroleum (ASX: WPL) is paying U.S. $850 million to enter into Israel’s off-shore Leviathan gas joint venture which will give it rights to approximately 4.725 tcf.
Its early days still (first production is forecast for 2017), which adds an element of speculation, but it looks compelling, especially with low break-even hurdles and growing merger and acquisition interest in the Cooper Basin.
Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.
Tim McArthur: Yowie Group Limited (ASX: YOW)
Yowie Group is a chocolate brand that provides an interesting history lesson and potentially (in the speculative sense) a very interesting future.
Let’s begin in 1938 when the USA passes a law banning the selling within its borders of “confectionary product with a non-nutritive object, partially or totally imbedded within it.” You can guess the one country in the world where you can’t find a Kinder Surprise!
Now, skip forward to 1995, when Yowie launched a chocolate treat (imagine an Australian version of a Kinder Surprise). It becomes the number one selling single unit confectionary line in Australia and New Zealand, recording sales of 100 million units.
Now fast forward 10 years to today and Yowie is about to launch in the USA thanks to a patent that allows it to produce a confectionary product that circumvents the law that has so far kept Kinder Surprise out of that country.
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
Peter Andersen: Sundance Energy (ASX: SEA)
Although listed on the ASX, this oil and gas company operates exclusively in the U.S. With interests in the highly productive Eagle Ford region plus additional acreage in other promising targets, Sundance Energy is an active participant in the fast-growing North American energy industry.
With proven and probable reserves increasing rapidly, this company is no speculative explorer. Having recently raised $80 million in an institutional placement Sundance Energy is well capitalised to further develop existing prospects and acquire new ones.
Rapidly growing positive cash flows and production capacity ensure a good future. At 98c, I think this company is significantly undervalued.
Motley Fool contributor Peter Andersen owns shares in Sundance Energy.
Chris Koenig: Paladin Energy (ASX: PDN)
A world concerned about global warming can look to nuclear power as an excellent choice for producing electricity without emitting carbon.
Paladin Energy has 75% of the Langer Heinrich Mine in Namibia, 25% of which recently was sold to the China Uranium Corporation for the equivalent of 27 cents per Paladin share (U.S. $190 in total). That places an equivalent value of AU $1.08 per share for Langer Heinrich alone, although the current share-price happens to be just half that at 54 cents.
I have followed the ups and downs of this stock for more than a decade and consider that now is a great time to buy it, since all the stars are in alignment for its ascendance.
Motley Fool contributor Chris Koenig does have shares in Paladin.
Tom Richardson: Kathmandu Holdings Ltd (ASX: KMD)
Trading around 15 times forecast earnings Kathmandu looks a good opportunity to me. The group’s core markets of Australia and New Zealand have grown solidly in recent years, particularly given the issues faced by others in the retail sector. It aims to expand in Australia and New Zealand through store openings and globally through online sales.
Kathmandu’s big opportunity is to grow itself as a successful global brand. Online sales made up only 4% of total sales in the last financial year, but if properly managed, I think it has potential to climb a lot higher.
Motley Fool contributor Tom Richardson does not own shares in any company mentioned.
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