Top stock picks for December

Credit: Simon Cunningham

We asked our writers to name some of their favourite stocks to buy in December and below are some of their favourite ideas.

Sean O’Neill:Carsales.Com Ltd (ASX: CAR)

Carsales’ websites in Korea, Mexico, and Brazil are all reporting solid growth and offer excellent long-term opportunities, while the company’s plans to up-sell to customers in Australia are developing apace.

Selling tyres, inspecting vehicles, and offering vehicle finance on private sales will make money, but their real power is in strengthening the Carsales brand and enhancing user trust for its platform. This will result in a better network effect and even more sales. With its share price down 1.7% for the year and trading on a price to earnings (P/E) ratio of 24, Carsales continues to look outstanding value.

Motley Fool contributor Sean O’Neill owns shares in Carsales.Com Ltd.

Ry Padarath: TFS Corporation Limited (ASX: TFC)

Agriculture stocks are a tough place to make money, but TFS Corporation is one profitable exception. TFS grows and sells Indian sandalwood. TFS is the planet’s largest single source of the wood product, which is used in applications from high-end furniture to pharmaceuticals, with an estimated market size over $1 billion.

The company benefits from high barriers to entry, with the trees taking up to 15 years to grow. It also benefits from being an ethical and sustainable source of the product, with consumers being increasingly sensitive to the ethical properties of their purchases.

Motley Fool contributor Ry Padarath does not own shares in TFS Corporation Limited

Ofer Karliner: Santos Ltd  (ASX: STO)

Santos has been battered in recent weeks after low oil prices combined with high debt levels to force a large rights issue and placement. However, the last tranche of new shares begin trading on 11 December which opens the door for a revised bid from the Middle Eastern consortium that was spurned in October.

Additionally, with Saudi Arabia talking about stabilising the oil price and the potential for a revised bid by Woodside for Oil Search proving the value of Santos’s key asset, there are plenty of upside drivers from here.

Motley Fool contributor Ofer Karliner owns shares in Santos. 

Rachit Dudhwala: OrotonGroup Limited (ASX: ORL)

OrotonGroup confirmed its turnaround is on track for the 2016 financial year at the group’s AGM on 27 November 2015. Managing director — Mark Newman — reiterated the group’s strong start to the 2016 financial year (FY16), announcing like-for-like (LFL) sales growth of 8% across the group. The standout performer was OrotonGroup’s GAP brand, recording LFL sales growth of 10% in the first 17 weeks of FY16.

If OrotonGroup can build on this momentum through the all-important Christmas trading period, the stock should outperform next year.

Motley Fool writer Rachit Dudhwala owns shares in OrotonGroup Limited. 

Peter Stephens: Domino’s Pizza Enterprises Ltd. (ASX: DMP)

Few stocks can compete with Domino’s regarding earnings growth, with the company forecast to increase its earnings by 28.9% per annum during the next two years. Although Domino’s has a P/E ratio of 61, its scope to expand in Asia (where it aims to double store numbers) and follow an acquisition strategy (such as the acquisition of Pizza Sprint in France) mean that it could continue the rise which has seen its shares soar by 97% this year. With scope to diversify its menu and benefit from a major social media presence, Domino’s has huge appeal.

Motley Fool contributor Peter Stephens owns shares in Domino’s Pizza .

Ryan Newman: oOh!Media Ltd (ASX: OML)

oOh!Media provides advertisers with access to a diverse range of audiences through its network of Out Of Home advertising spaces. These include Roadside Billboards as well as signs in airports, shopping centres, cafes and sport centres.

While oOh!Media is Australia’s largest Out Of Home media group by revenue, it is also leading the industry in its strategic move towards digital signs. These signs should create greater revenue streams and a decrease in costs (hello higher margins) and provide new avenues for growth. It recently upgraded earnings guidance and acquired the Inlink business which will boost its presence in Australian capital cities.

Motley Fool employee Ryan Newman does not own shares of oOh!Media Ltd.

Tim McArthur: Breville Group Ltd (ASX: BRG)

The December trading period is vitally important for most Australian discretionary retailers and in fact in many cases the vast majority of yearly profits are earned over the course of this month, inclusive of the post-Christmas sales.

One stock currently priced attractively on a forward multiple of 16.5x, which could surprise on the upside if general consumer spending is stronger than expected is Breville Group.

Breville’s core market of small household appliances is especially popular at Christmas but importantly, Breville also offers exposure to overseas markets which diversifies the risk from the domestic economy.

 Motley Fool writer Tim McArthur does not own any shares in Breville Group Ltd.

 Owen Raszkiewicz: Yowie Group Ltd (ASX: YOW)

This is the second time Yowie Group has been my top pick. The once-popular children’s confectionery is currently being rolled out across the giant US market after being pulled from the Australian market almost 10 years ago. Until 2019, Yowie has exclusive rights to a patent that essentially shields its chocolates from the intense competition of its number-one rival, Kinder Surprise. It’s a high-risk investment proposition, but I believe the risk-reward profile is currently skewed in investors’ favour.

Motley Fool writer/analyst Owen Raszkiewicz owns shares of Yowie Group Ltd.

Tom Richardson: REA Group Limited (ASX: REA)

Yesterday the stock hit a record high of $52.81 and is one I will re-recommend partly on the basis that the digital advertising group continues to expand its global footprint with the recent acquisition of Asia-focused online property portal operator iProperty Group Ltd (ASX: IPP).

REA Group has a long growth runway into the digital future and plenty of opportunity to keep growing profits at a rapid rate. It has powerful tailwinds, high margins, strong management, a scalable business model, and some big-hitting backers. One for the bottom draw.

Motley Fool contributor Tom Richardson owns shares in REA Group and iProperty.

Mike King: Nearmap Ltd (ASX: NEA)

Nearmap is a provider of photomapping software, generating strong growth in Australia and it recently reported around $500,000 in revenues from the US. That’s not bad when you consider it allows free access to its US service. The good news is that the company is putting a paywall in place this week, which should see revenues soar – much like they did when the paywall was implemented in Australia.

With the share price down 42% so far this year, today’s price represents an attractive entry into a small and growing tech company with huge prospects.

Motley Fool contributor Mike King owns shares in Nearmap.

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