Top stock picks for October

Catapult Group International Ltd (ASX:CAT), SEEK Limited (ASX:SEK) and Vita Group Limited (ASX:VTG) are among October's top picks.

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Tim McArthur: SEEK Limited (ASX: SEK)

If there are two things investors love it is dividends and earnings growth. While the 3% forecast dividend yield available on shares in employment advertiser and education provider SEEK might not get investors' pulses racing, the forecast earnings growth remains solid if an investor takes a medium term view.

The market appears to be fixated on SEEK's financial year (FY) 2016 earnings growth which admittedly is on the low side, however looking out to FY 2017 and growth rates are back into double digits. Based on a forecast for earnings per share of 63.7 cents, the forecast price-to-earnings ratio is 19x. That multiple doesn't appear overly demanding for a company of such high quality.

Motley Fool contributor Tim McArthur has no interest in SEEK Limited. 

Ry Padarath: Incitec Pivot Ltd (ASX: IPL)

Australian companies have been criticised for overpaying dividends at the expense of investing for future profits. Not so Incitec Pivot. Management took advantage of the strong Australian dollar to construct a huge ammonia plant in Louisiana. The additional capacity is slated to contribute to $700 million in free cash flow from 2016 onward.

In addition, the majority of volumes from the new plant are contracted to major customers already. Through shrewd decision making, the company will benefit from investing offshore with the strong Australian dollar, while it will also benefit from earning in US dollars in the future as the Aussie declines.

Motley Fool contributor Ry Padarath has no interest in Incitec Pivot. 

Mitch Sonogan: Greencross Limited (ASX: GXL)

Greencross is Australia's largest pet care specialist and owns 340 retail pet stores and veterinary clinics. It's lucky our cherished pets are easier to please than the investing community – Greencross recently reported a 43% increase in earnings per share and 36% increase in its dividend in FY15, but this unloved stock is still down around 30% over the past 12 months.

I think Greencross will exceed expectations in the future as its profit margins improve with initiatives like private label food and co-located stores. Additionally, the $9 billion pet market is increasing which should provide a tailwind for many years of steady earnings growth – Greencross is a bargain at its current price.
 
Motley Fool contributor Mitch Sonogan owns shares of Greencross Limited. 

Tom Richardson: Catapult Group International Ltd  (ASX: CAT)

This is a speculative business that is worthy of a spot on investors' watch lists. The group provides wearable sportswear equipment to professional sports teams and associations to help them monitor the performance of their athletes. This is a large addressable market and any company able to develop a market-leading product is likely to enjoy considerable success.

Catapult's rapidly expanding Australian, US and European client lists of professional sports teams / organisations is promising and the price has dropped off recently to $1.40. Significant competitive risks remain, but the potential is clear.

Motley Fool contributor Tom Richardson has no interest in Catapult Group. 

Sean O'Neill: Retail Food Group Limited (ASX: RFG)

Retail Food Group ("RFG") owns the Donut King, Gloria Jean's, Crust, Pizza Capers, Café Di Bella, Brumby's, Michel's Patisserie and a range of other successful franchises in Australia and overseas locations. In addition to growing same-store sales successfully at a majority of franchises, RFG is expanding overseas and expects to derive 25% of its earnings before tax from international markets by 2017.

Factor in a long-term record of market-beating growth, 20% growth forecast for this financial year, a price to earnings (P/E) ratio of 12 – below the market average – and a 5.4% dividend yield backed up by great cash flow and RFG is an outstanding buy right now.

Motley Fool contributor Sean O'Neill owns shares of Retail Food Group Limited.

Mike King: Vita Group Limited (ASX: VTG)

You may not know Vita Group by name, but many of you will have ventured into their stores without even knowing it. Vita Group runs Telstra Corporation Ltd's (ASX: TLS) retail stores in shopping centres as well as a number of Telstra business centres.

Clearly, the performance of Vita Group is closely tied to the giant telco, but investors are being offered a cheap price, substantial growth and decent and growing dividends. At the current price of $1.86, Vita is trading on a trailing P/E ratio of 10.7x and a dividend yield of 4.3% fully franked – not including three special dividends.

Motley Fool contributor Mike King has no interest in Vita Group.

Christopher Georges: ResMed Inc. (CHESS) (ASX: RMD)

ResMed is the global leader in treating sleep related disorders and is currently trading close to $7 per share, down significantly from its 52-week high of $9.85. The company is a proven performer and has a long history of increasing revenues and earnings per share.

The company is currently benefiting from the currency tailwind as well as improving sales from new and upgraded products. There remains a large population of people who are currently undertreated or yet to be diagnosed with sleep related conditions and this presents a significant growth opportunity for ResMed over the next decade or so.

Motley Fool contributor Christopher Georges has no interest in ResMed Inc. (CHESS). 

Ryan Newman: Retail Food Group Limited (ASX: RFG)

It's scary throwing money at the market when everyone else seems to be selling, but when a quality company is trading at what seems to be a very reasonable price, sometimes you just have to take that chance.

I recently did that with Retail Food Group, which owns brands such as Pizza Capers and Gloria Jean's coffee. The shares have almost halved in price over the last seven months or so which I believe to be a complete overreaction. At roughly $4.30, the shares are also trading on a tasty 5.4% fully franked dividend yield.

Motley Fool contributor Ryan Newman owns shares in Retail Food Group Limited.

Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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