Here are some of our Foolish writers’ favourite ideas for shares to buy this April:
Sean O’Neill: Yellow Brick Road Holdings Ltd (ASX: YBR)
Mortgage broker Yellow Brick Road (“YBR”) has taken a big hit from recent housing market wobbles – down 54% for the year. However, after several years building a brand and a network, YBR is well positioned to claim market share and has several new products as well as a big push into wealth management in the works.
YBR also recently acquired an online investment company to broaden its reach and complement its expanding store network. The company is in a good place, yet shares are the lowest they’ve been in roughly five years. YBR looks like great value today, and I topped up in February.
Motley Fool contributor Sean O’Neill owns shares in Yellow Brick Road Holdings.
Ryan Newman – XERO FPO NZX (ASX: XRO)
Xero is a provider of accounting software via its Software-as-a-Service (SaaS) platform, and it’s taking the world by storm. It seems that the market is taking a short-term focus on the business. The company is not yet profitable, although this is mostly due to its heavy focus on marketing and development of its products. It’s rapidly attracting new customers which will provide the business with a solid and reliable source of income for years.
An investment in Xero today is not without risk, but if it can continue to expand its brand around the world, the long-term rewards could be significant.
Ryan Newman owns shares in Xero. The Motley Fool Australia owns shares in Xero.
Tim McArthur: IOOF Holdings Limited (ASX: IFL)
IOOF is a diversified wealth management group which reported 18% growth in underlying profit for the half year ending December. With the stock down around 10% since the beginning of calendar year 2016, value appears to be emerging.
The strong growth in interim earnings can be expected to continue through to the full year result, which suggests IOOF will report significantly higher results this year compared to the prior. With a trailing fully franked dividend yield of 6.1% and an undemanding price-to-earnings ratio, the investment case for IOOF is appealing.
Tim McArthur does not own any shares in IOOF Holdings Ltd.
Matt Bugden: Sirtex Medical Limited (ASX: SRX)
The best time to buy a promising growth stock is on a pullback. With this in mind, now looks like a good opportunity to invest in Sirtex Medical – down around 30% this year.
Sirtex provides targeted radiation treatment for liver cancer. Market penetration at a mere 2% suggests massive further growth potential, with positive results from clinical trials and growing support in the medical community. Sirtex is progressing towards entry into China and Japan, with potential for its technology to be applied to treating other cancers.
Motley Fool contributor Matt Bugden has no financial interest in Sirtex Medical.
James Mickleboro: Caltex Australia Limited (ASX: CTX)
The share price of Caltex is down over 10% in 2016 and finds itself priced at just under 15 times estimated FY2016 earnings. The company is in a fortunate position where low oil prices mean the fuel retailer has been able to operate with record high gross retail margins that are easily absorbed by consumers.
I expect this will allow the company to produce bumper earnings this year which make the shares appear to be a bargain right now. An estimated fully-franked dividend of 3.7% yield makes it more appealing in my opinion.
Motley Fool contributor James Mickleboro has no financial interest in Caltex Australia Limited.
Christopher Georges: Sirtex Medical Limited (ASX: SRX)
Shares of Sirtex were sold down heavily during the month of March as investors became increasingly concerned about the impact of the rising Australian dollar, slowing growth in unit dose sales and another departure of a senior manager – this time in the critical Americas market. Despite these issues, Sirtex remains one of the fastest-growing companies on the ASX and the recent sell-off appears to be overdone. Analysts are forecasting FY16 earnings per share of 101.5 cents and this sees the shares now trading on a price to earnings ratio of less than 28.
Motley Fool contributor Christopher Georges owns shares in Sirtex Medical.
Rachit Dudhwala: Sydney Airport Holdings Ltd (ASX: SYD)
Sydney Airport owns and operates Sydney’s Kingsford Smith International Airport and is in pole position to negotiate the terms to construct and operate Sydney’s second proposed airport at Badgery’s Creek in Western Sydney. This makes Sydney Airport best placed to capitalise on increased passenger numbers to Australia’s largest capital city. Its latest airport traffic performance released in February reinforces this growing trend, with total passenger movements increasing 10% compared to the same time last year.
Accordingly, these tailwinds should allow the group to organically grow earnings over the long term, making it a top stock to own.
Motley Fool contributor Rachit Dudhwala does not own shares in Sydney Airport Holdings Ltd.
Regan Pearson: Emerchants Ltd (ASX: EML)
Don’t be fooled. Growth star Emerchants is much more than just a gift card company. Emerchants solves the costly problems of cash handling and delayed money transfer for lending, retail and gaming companies.
The company collects revenue of around 1.2%-1.5% of loaded card value (depending on the type of card), while processing the payments itself and avoiding costly transaction fees from third party companies. The system is easily scalable, allowing quick, efficient growth. Shares look pricey after the recent jump, but reflect the strong prospects, high gross margins, and zero debt position.
Motley Fool contributor Regan Pearson does not own shares in Emerchants.
Mike King: TPG Telecom Ltd (ASX: TPM)
TPG Telecom is one of Australia’s largest telecommunications companies, providing mainly broadband services to Australian households. The company also has a growing number of mobile subscribers, and has entered into a relationship with Vodafone, providing the mobile operator with dark fibre connections to more than 3,000 mobile cell sites. TPG is also rolling out its own fibre connections to a number of apartment blocks, in competition with the NBN.
The current P/E ratio of ~30x earnings can be misleading, especially with earnings growing at an average annual rate of 23% for the past decade, and no signs of a slowdown anytime soon.
Motley Fool writer/analyst Mike King owns shares in TPG Telecom.
Tom Richardson: Mesoblast limited (ASX: MSB)
The company is in the process of developing a range of therapies for common diseases and medical complaints, the science being to develop stem cells that regenerate ageing or diseased body parts such as cartilage, bone, and muscle. Unsurprisingly this means it has whopping addressable markets to potentially sell its products into if they receive regulatory approval.
However, this company is speculative and carries significant downside risk if it cannot deliver on its potential, on the other hand if it succeeds shares are likely to zoom far above today’s prices around $2.50.
Motley Fool writer/analyst Tom Richardson owns shares in Mesoblast.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
The Motley Fool Australia owns shares of Xero. 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.