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Top stock picks for July

Regan Pearson: Webster Limited (ASX: WBA)

Shares in walnut and onion producer Webster Limited (ASX: WBA) have plummeted almost 40% since February and are now at very attractive levels. It may sound boring, but Webster produces 95% of Australia’s walnuts, which are growing in demand and falling in supply, pushing prices up.

The company has minimal debt, is increasing earnings, yields, and dividends, and the planting of new orchards means walnut production is forecast to double over the next nine years.

Given the company’s growth profile and new Avondale Orchard, Webster would fit a conservative portfolio with an expectation to hold for the next decade.

Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.

Mike King: LifeHealthcare Group Ltd (ASX: LHC)

LifeHealthcare (ASX: LHC) is a distributor of a large array of medical devices to surgeons, hospitals, and other medical specialists. Its products are critical components for the provision of health care and include implantable devices and prostheses as well as equipment such as ultrasound machines.

The company has posted four consecutive years of revenue growth, and this financial year is expected to see 8.1% growth in net profit. The company says its primary markets are forecast to grow at 7.7% annually over the next five years, setting a strong base for LifeHealthcare to grow above that level through new products and entry into new markets. 

Motley Fool writer/analyst Mike King owns shares in LifeHealthcare.

Tim McArthur: McPherson’s Ltd (ASX: MCP)

With a market capitalisation of just $105 million, McPherson’s Ltd (ASX: MCP) is an under-researched and underfollowed company and is certainly not on the radar of most investors.

In contrast, the brands owned by this wholesaler of personal care and household consumable products are very widely recognised. McPherson’s brand portfolio includes Manicare beauty accessories, Swisspers cotton products, Wiltshire knives, and Multix cling and foil wrap.

With the stock price bouncing up around 10% from its 12-month low it’s possible the stock has finally found a bottom. With management’s guidance suggesting full year earnings per share of 18.2 cents per share, the stock is trading on a price-to-earnings ratio of just 6.1 and boasts an attractive looking annualised dividend yield of 10.8%.

Motley Fool contributor Tim McArthur does not own shares in McPherson’s.

Peter Andersen: Chesser Resources Limited (ASX: CHZ)

Chesser Resources (ASX: CHZ) has 100% ownership of a highly rated gold deposit in Kestanelik Turkey. Recent drilling programs have confirmed the quality of the ore body and indicative cash costs are estimated at US$600 per oz; well below comparable projects in Australia.

At present Chesser is in the process of proving up the resource before moving on to the available funding options and obtaining government and environmental approvals. The operation is well situated with easy access to all necessary infrastructures, including labour.

Turkey is a relatively stable country and is sympathetic to new mining projects. Selling at 11c, Chesser Resources is an outstanding speculative buy for those with a little patience.

Motley Fool contributor Peter Andersen owns shares in Chesser Resources

Ryan Newman: Coca-Cola Amatil Ltd (ASX: CCL)

I first recommended Coca-Cola Amatil (ASX: CCL) as a best buy back in December, highlighting the business’ enormous competitive advantages as well as its short-term woes. At the time, the stock was trading at a price of $12.34.

Unfortunately, those short-term woes have seen the stock plummet a massive 23% since that day. But with my long-term outlook for the bottler remaining intact, Coca-Cola Amatil presents as an even better buy today.

A strategic review of the business’ operations will ensure higher productivity and efficiency while it is estimated up to $100 million in costs could also be removed. In addition, its forecast dividend yield is 4.8%, franked to 75%.

Motley Fool contributor Ryan Newman owns shares in Coca-Cola Amatil Ltd.

Owen Raszkiewicz: FSA Group (ASX: FSA)

FSA Group (ASX: FSA) was one of 2013’s best stocks to hold, soaring more than 178%. FSA helps businesses and individuals with cash flow management and relieving the burdens of excessive debt by consolidation and arranging payment plans with creditors.

Its business is divided into three operating segments, namely Services, Home Loans and Small Business. Last year all divisions grew profits well but management recently increased their FY14 guidance to between 18% and 25% higher than FY13.

When interest rates (inevitably) rise, more people and businesses are likely to suffer from credit stresses (driving demand for FSA’s services). It is forecast to pay a 4.1% dividend fully franked in the coming 12 months.

Motley Fool contributor Owen Raszkewicz does not have a financial interest in FSA Group.

Tom Richardson: GBST Holdings Limited (ASX: GBT) 

GBST Holdings Limited  (ASX: GBT) is a financial software business that services the asset management industry mainly in Australia and the United Kingdom, with potential to grow elsewhere.

GBST’s Composer technology is what provides its potential in the U.K., as the technology assists in the administration of very popular tax-based, superannuation-type, financial products for U.K. consumers.

It has been growing revenues through winning new corporate clients and sells for just 14.5 times projected earnings. The business model is based on a sticky client base and recurring revenues — it will likely be a big winner if more new business deals start to drop and its reputation grows.

Motley Fool contributor Tom Richardson owns shares in GBST.

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