Top stock picks for October

We asked our contributors to pick their favorite ASX stocks to buy this month. Kip McGrath Education Centres Limited (ASX:KME), Ainsworth Game Technology Limited (ASX:AGI) and ABM Resources NL (ASX:ABU) are among their top ideas.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We asked our contributors to pick their favorite ASX stocks to buy this month. Here are their top ideas.

Ryan Newman – Japara Healthcare Ltd (ASX: JHC)

Given that it only listed on the ASX earlier this year, aged-care provider Japara Healthcare will be a name unfamiliar to most investors. However, it has the potential to be a great investment for those who get in early.

Not only is the company in a box-seat to benefit from Australia's ageing population, it is also a relatively safe bet for investors in times of economic uncertainty. Demand for healthcare services doesn't tend to fluctuate too greatly even in the toughest conditions.

The stock is trading at $2.38, which is significantly below its peak at $2.79 in May.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

Andrew Mudie: Ozforex Group Ltd (ASX: OFX)

I've written about OzForex group before because I simply don't understand why the market has given it such a tough run. The company listed in October last year and quickly rose from the $2 offer price to $3.50 in March but fell back to around $2.50 in June after investors were disappointed by the number of active users reported by the company. User numbers were down 2% from the IPO forecast while most other metrics were beaten by 5% or more.

I view the company as a great long-term opportunity due to its high growth and disruptive nature. In my view the outlook has not changed enough to account for the severe price drop and thus it still appears great value.

Motley Fool contributor Andrew Mudie owns shares in OzForex. You can find Andrew on Twitter @andrewmudie

Owen Raszkiewicz: WAM Capital Limited (ASX: WAM)

WAM Capital is the largest listed investment company run by Geoffrey Wilson of Wilson Asset Management. Since inception the investment portfolio has returned an average of 18.2% per annum and has outperformed the All Ordinaries index by a whopping 9.5%pa (before expenses, fees and taxes).

Currently its share price is trading slightly above its net asset backing but I think the group has a healthy cash balance (30.7%) and its top holdings are a number of fantastic growth stocks which provide healthy upside potential. Although management's goal is to provide a rising dividend stream, given the nature of the business predicting payouts is fraught with risk. Its trailing dividend yield is 6.5% fully franked.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in WAM Capital.

Sean O'Neill: ABM Resources NL (ASX: ABU)

Although there are several compelling reasons not to be in gold at the moment, I believe this gold explorer transitioning to producer still has considerable potential for the speculative investor.

Reserves of 611,000 ounces at an average grade of 10g/t and the proximity of processing infrastructure should help keep the cost of production competitive, while even modest production figures would leave the company looking very cheap.

ABM's more recent explorations have found sizeable veins of up to 167g/t of gold which I believe will maintain if not increase total reserves and ore quality going forwards.

Motley Fool contributor Sean O'Neill owns shares in ABM Resources.

Aryan Norozi: Senex Energy Ltd (ASX: SXY)

Mid-tier oil and gas producer, Senex Energy operates and develops energy sources in the lucrative Cooper Basin. With a 38% decline in FY14 net profit, investors are not happy and shares are trading close to 52-week lows.

However, Senex is jam-packed with growth potential and current prices scream a buy. Its recent announcement of an asset swap with Queensland Gas Company will bring it closer to its FY18 production strategy, which previously seemed unattainable. A good measure of future potential is director dealings. With Senex's directors increasing their collection of shares, I think it has a bright future ahead.

Senex sits on no debt and impressive reserves, and its current price of $0.555 means it trades on a cheap 9.4x FY15's projected earnings. I think Senex offers investors a rare opportunity to gain entry into an exciting growth play.

Motley Fool contributor Aryan Norozi does not own shares in any of the companies mentioned.

Regan Pearson: Ainsworth Game Technology Limited (ASX: AGI)

Five years of double-digit growth; high profit margins; low debt; an outlook for sustained international growth and a price of just 15x earnings has shot gaming machine company Ainsworth Game Technology (AGI) to the top of my watchlist in October.

Additionally, AGI will benefit from the falling Aussie dollar with international revenues contributing 41% of total revenue. The U.S. remains a key focus for growth, as does online and mobile gaming.

AGI is a strong business, but founder and 53% shareholder Len Ainsworth is now 91, so there is potential for some uncertainty over ownership succession.

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

Tom Richardson: Kip McGrath Education Centres Limited (ASX: KME)

Online and classroom-based education business Kip McGrath nearly doubled net profit for the financial year ending June 2014. The company expects an increased profit in FY15 as its online education model continues to gain traction in Australia and around the world. The principal activities of the business are the sale of franchises and then selling further services to franchisees in their education fields. It provides services to the pre-school, primary, secondary and tertiary education markets.

With online education and private tutoring for children clear growth areas, Kip McGrath has the opportunity to build a big future.

Motley Fool contributor Tom Richardson owns shares in Kip McGrath Education. 

Of the companies mentioned in this article The Motley Fool has an interest in Ozforex.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »