We asked our contributors to pick their favourite ASX stocks to buy this month. Here are their top ideas.
Ryan Newman: Woolworths Limited (ASX: WOW)
You might think I'm crazy for naming Woolworths as my top stock pick for March, but its recent hammering has created the perfect opportunity for long-term investors to swoop on one of Australia's greatest businesses.
The stock fell 10% after its earnings report last week as it plans to invest more heavily in its supermarket division. While earnings will take a hit in the near term, the investment will be made to strengthen its future leadership position, which should be great for those investors in for the long haul. In addition, the stock yields 4.7%, fully franked.
Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.
Andrew Mudie: QBE Insurance Group Ltd (ASX: QBE)
QBE Insurance Group may already be up 22% over the last month but I believe it will be much higher in 12 and 24 months' time. QBE's revamped management team has been able to execute a relatively successful 2014 financial year and I believe fund managers and investors now have renewed confidence in the global insurance giant.
QBE's forecast for the next 12 months appears achievable, and analysts are forecasting a significant rise in earnings and dividend if the company can achieve guidance. Key risks include catastrophic weather events, poor underwriting practices and another year of poor crop yields in the US, however these risks generally remain unchanged from previous years.
Motley Fool contributor Andrew Mudie owns shares in QBE.
Regan Pearson: Empired Ltd (ASX: EPD)
Small-cap IT service company Empired Ltd was a star of reporting season and is heading for big things. Acquisitions have helped the company achieve compounded annual revenue growth of 25% for the last five years and it is targeting full year revenue growth of up to 80% over the prior corresponding year. This thanks to the acquisition of New Zealand-based Intergen Limited.
Directors and management own 20% of the company which is a big tick, but most importantly, the current share price means Empired sells for just 16x 2014 earnings which seems cheap for a company with a proven growth record.
Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.
Tim McArthur: M2 Group Ltd (ASX: MTU)
If there's one sector which could be singled out for experiencing an industry tailwind that seems to be benefiting most players, the telecommunications sector would be it.
While Telstra remains popular with income-seeking self-managed super funds (SMSF), those looking for smaller companies with more growth potential should consider M2 Group.
M2 delivered 8% revenue growth to $546.2 million and an underlying net profit after tax up 16% to $50.6 million for the first half. While many of M2's peer group are also performing well, on a relative valuation basis M2 is arguably the pick of the bunch.
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned.
Sean O'Neill: Australian Bauxite Ltd (ASX: ABX)
Last year Australian Bauxite was my Top Stock for September. The company has since overcome many obstacles, but its share price is largely unchanged.
Production began at Bald Hill (TAS) in December, with the first sales shipment expected to occur in a few weeks. Thanks to a capital raising, ABX will accelerate construction of a second mine in Queensland, which should begin operation this year.
With $4 million cash in the bank, the Australian dollar declining and bauxite prices continuing to rise, ABX is inches away from standing on its own two feet as a positive-cashflow mining company and has medium-term appeal for the speculative investor.
Motley Fool contributor Sean O'Neill owns shares in Australian Bauxite Ltd.
Peter Stephens: Insurance Australia Group (ASX: IAG)
Even though the prospects for the ASX are brighter following the recent interest rate cut, it may not be a smooth road to recovery. That's why IAG's beta of 0.59 could be appealing. IAG also offers good value, with a price to earnings ratio of 11.5 indicating that an upward rerating could lie ahead. It also has tremendous income prospects with a yield of 6.3%.
Motley Fool contributor Peter Stephens has no financial interest in IAG.
Tom Richardson: Magellan Financial Group Ltd (ASX: MFG)
I am posting my first ever re-recommendation with fund manager Magellan. The business just doubled its half-year net profit and dividend versus the prior corresponding period and given the growth and outlook the stock trades on a reasonable valuation at $19.87.
It's coming off a small base relative to the large institutional business development opportunities overseas, with multiple other development opportunities including its recently launched exchange traded managed fund (ETMF). The launch of an ETMF is an exciting prospect given Magellan's track record and the fact its active management offers an appealing alternative to the passively managed (index linked) ETFs currently on the ASX.
Motley Fool contributor Tom Richardson owns shares in Magellan.
