Motley Fool Australia

Top stock picks for September

Credit: Simon Cunningham

We asked our writers to pick their favourite stock picks for the month of September. Here’s what they came up with.

Mike King: IVE Group Ltd (ASX: IGL)

Nominated as my top stock pick for June, IVE Group makes it into September as well on the back of strong recent results. IVE recently reported a net profit of $20.9 million placing it on a price earnings ratio of 9.6x at a price of $2.25 and it pays a dividend yield of 8%. The company is a marketing and print communications provider and the market leader in its sector, but still with a tiny market share of 8%. IVE counts a number of Australia’s leading companies and multinationals as clients including Vodafone, Toyota, AMP, Foxtel, Commonwealth Bank and Bauer Media Group.

Motley Fool writer/analyst Mike King has no financial interest in IVE Group.

Sean O’Neill: A2 Milk Company Ltd (Australia) (ASX: A2M)

a2 produces milk that contains only a2 proteins, which are reportedly healthier than regular milk, which contains both a1 and a2 proteins. In recent years, a2 has been able to charge a premium price for its products, and has grown significantly in Australia. Now it is expanding into the UK, USA, and China, and infant formula has become its main seller at more than 50% of sales. As a2 spends more on brand building and research (to validate its health claims) the company has ample room to grow in all four markets. I’ve bought shares both above and below today’s prices, and feel a2 is good value today.

Motley Fool contributor Sean O’Neill owns shares in a2 Milk Company. 

Matt Brazier: United Overseas Australia Limited (ASX: UOS)

This Malaysian property developer has a share price of 52.5 cents and is trading at a sharp discount to its 84 cents of net tangible assets. The group paid 3 cents of dividends last year representing a dividend yield of 5.7%. For the first half of 2016 United Overseas recorded a $55 million net profit attributable to security holders, up 43.7% on the same period last year. The group has a market capitalisation of $678.3 million and hundreds of millions of dollars in net cash, so it looks like a bargain based on book value, dividend yield and profit.

Motley Fool contributor Matt Brazier owns shares in United Overseas Australia Limited.

Rachit Dudhwala: Village Roadshow Ltd (ASX: VRL)

In August, Village Roadshow reported a 60% fall in net profit for the 2016 full-year, despite peer Ardent Leisure reporting yet another surge in profit for the same period. Although Village’s results were ordinary at best, management is taking proactive steps to rebase earnings by chasing additional revenue streams and business ventures. Whilst the strategy carries more risks, at current prices Village trades on a robust 5.8% fully franked yield and appears cheap on a price-earnings basis. The current risk-reward makes Village Roadshow my top stock to watch in September given a return to growth is an imminent possibility.

Motley Fool contributor Rachit Dudhwala has no financial interest in Village Roadshow.

Alan Edmunds: RCG Corporation Ltd (ASX: RCG)

After reporting underlying net profit growth of over 142% on the prior year and issuing guidance for a 50% rise in underlying EBITA for 2017, RCG Corporation’s share price fell by over 10%. In my opinion the report was outstanding and the market is being short-sighted focusing on lower-than-expected recent like-for-like sales. I believe this to be a temporary occurrence brought on by the federal election and as such the current price presents investors with an excellent entry point.

Motley Fool contributor Alan Edmunds owns shares in RCG Corporation.

Christopher Georges: Blackmores Limited (ASX: BKL)

Blackmores shares have fallen by around 25% since the vitamin maker announced that its FY17 first quarter sales are likely to be below that of the prior corresponding period. Changes to Chinese import regulations have clearly affected the supply dynamics into the region, although I believe this to be a temporary phenomenon with demand for Blackmores’ products still expected to grow strongly as the year progresses. As a result, I believe the recent pullback presents an attractive buying opportunity for investors.

Motley Fool contributor Christopher Georges owns shares in Blackmores.

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

Retail Food Group has enjoyed tremendous success since it listed on the ASX, growing earnings and dividends in spectacular fashion. That trend continued in financial year 2016 with revenue up 30.5% and net profit up 20.5%. It also increased its full-year dividend by 18.3% to 27.5 cents fully franked. That equates to a yield of 4.1%, or 5.8% grossed up, with the potential for even more growth from here. The company owns brands such as Gloria Jean’s, Crust Pizza and Pizza Capers. It’s also expanding its operations internationally, which has the potential to push the share price higher over the coming years.

Motley Fool contributor Ryan Newman owns shares of Retail Food Group. 

James Mickleboro: Touchcorp Ltd (ASX: TCH)

The shares of cloud-based software developer Touchcorp have slumped in the last couple of weeks despite it posting a 21% increase in full year revenue to $22.5 million and an incredible 71% rise in net profit before tax to $7.2 million. Considering its debt-free balance sheet, strong growth prospects, and its large holdings in a number of exciting young tech companies, I believe this has left its shares trading at a fantastic price for investors.

Motley Fool contributor James Mickleboro has no financial interest in Touchcorp Ltd. 

Matt Bugden: Aconex Ltd (ASX: ACX)

With its construction collaboration platform, Aconex is one of the most innovative technology companies on the ASX today. It has an attractive software-as-a-service business model and massive potential in a huge global industry.

Shares have always appeared expensive as they continued to march higher since the 2014 IPO. However, they have recently fallen close to 30% despite strong results announced last week. At around $6.40, they are worthy of a small position for long-term investors. Eight analysts have set 12-month price targets of between $7.40 and $10.

Motley Fool contributor Matt Bugden has no financial interest in Aconex.

Tim McArthur: Platinum Asset Management Limited (ASX: PTM)

Platinum is a highly regarded international fund manager with nearly $23 billion in funds under management (FUM). Like all portfolios, the underlying performance of Platinum’s funds will sometimes outperform and sometimes underperform. This naturally leads to shifts in the level of support for its money management services.

In FY 2016, the ebb and flow of the investment cycle was against Platinum with the company experiencing a net outflow of approximately $1.5 billion in FUM. Despite the turbulence, I believe the future for Platinum remains bright, with the stock trading at a 52-week low, I suspect it could prove a solid investment in the years ahead.

Motley Fool contributor Tim McArthur has no financial interest in Platinum Asset Management Limited.

Edward Vesely: Brambles Limited (ASX: BXB)

Brambles recently announced constant-currency growth in underlying profit and earnings-per-share of 9% and 7% respectively. Much of this as a result of strong net new business wins, strong like-for-like volume growth and pricing gains in its global pallets operations.

Despite this, its share price has fallen almost 8% since its full-year profit announcement on 18 August to give buyers of the shares a partly-franked dividend yield of approximately 2.3%. Management stated that growth for the next financial year is expected to be between 9% -11% and the shares look reasonable value over a three-year time frame.

Motley Fool contributor Edward Vesely has no financial interest in Brambles.

Tom Richardson: Macquarie Group Ltd (ASX: MQG)

I continue to like Macquarie as an investment given its shift into the asset management space and the stock’s valuation. Nowadays it is commonly described as an asset manager that also does investment banking and its adaptability is a real strength. Given it also offers exposure to a stronger US dollar and capital markets with a bumper 5% yield I expect the business and share price will outperform the market over the short and long term.

Motley Fool contributor Tom Richardson owns shares in Macquarie Group.

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Returns As of 6th October 2020

Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of A2 Milk, Retail Food Group Limited, and TOUCHCORP FPO. 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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