Top stock picks for December

Credit: Simon Cunningham

We asked our writers to name some of their favourite companies to buy in December and here’s what they came up with:

Tristan Harrison: Healthscope Ltd (ASX: HSO) 

Healthscope recently updated the market saying that its private hospitals were experiencing a similar number of patients in 1Q17 as 1Q16 and if that continues for the rest of the year, FY17 profit would be similar to FY16.

I think the stable number of patients is a one-off, the aging cohort will need to visit hospitals more as they get older and provide growth for Healthscope. The recent 30% price drop presents a good opportunity to buy. Healthscope currently has a yield of 3.22% which is decent, particularly once it starts franking its dividend.

Motley Fool contributor Tristan Harrison owns shares in Healthscope Ltd

Mike King: Retail Food Group Limited (ASX: RFG)

recommended Retail Food as my top stock back in February 2016. At the time, the share price was $4.52 – it’s now $6.31, but I still think the company is worth adding to your portfolio.

The franchise operator owns a multitude of franchises including Gloria Jean’s, Donut King, Pizza Capers, Crust Gourmet Pizza, Michel’s Patisserie, bb’s café, and Brumby’s Bakery to name but a few, with more than 2,500 outlets in its stable in 69 countries. Other attractive features include a forecast 20% growth in net profit in FY2017, and a fully franked dividend yield above 4%.

Motley Fool writer/analyst Mike King does not own shares in Retail Food Group.

James Mickleboro: Ramsay Health Care Limited (ASX: RHC)

In the last three months the shares of this leading global private hospital operator have fallen almost 15% off their 52-week high. I believe at 27x forecast full year earnings this makes Ramsay’s shares good value for buy and hold investors, especially considering its strong growth prospects. There aren’t many shares that investors could buy and hold for at least the next decade with confidence, but thanks to ageing populations and longer life expectancy Ramsay is one.

Motley Fool contributor James Mickleboro has no financial interest in Ramsay Health Care Limited

Christopher Georges: Webjet Limited (ASX: WEB)

Webjet’s latest market update was impressive and proved the company is well-and-truly ahead of its competitors when it comes to bookings and transaction growth. Its consumer division, which includes the well-known Webjet booking platform, continues to grow at 4x the market average and its business-to-business division is growing faster than its rivals by a factor of 10.

Although the shares have enjoyed a strong run over the past two years and may appear pricey at current levels, I believe there could be more upside over the next five years as the company delivers on its growth targets.

Motley Fool contributor Christopher Georges has no financial interest in Webjet Limited.

Edward Vesely: iSentia Group Ltd (ASX: ISD)

Isentia has seen its share price heavily marked down since it announced a trading update in November reporting that 2016-17 full-year revenue and EBITDA is now only expected to be in the high-single digit range. This compares to the company’s August outlook of growth in the low-to-mid teens. Serious errors and assumptions were made in the acquisition of King Content which resulted in the downgrade, but the content marketing business represents only 7% of the 2015-16 EBITDA.

The share price fall therefore seems overdone and today presents a buying opportunity for a small part of your portfolio.

Motley Fool contributor Edward Vesely owns shares in iSentia Group Ltd.

Rachit Dudhwala: Village Roadshow Ltd (ASX: VRL)

Shares in Australia’s premier leisure and entertainment conglomerate Village Roadshow continue to underperform peer Ardent Leisure Group after the former revealed inconsistent trade at its theme parks following the tragic fatalities at Dreamworld.

Whilst I’m cognisant that Village’s theme parks division represents a substantial 31% of group earnings, I believe its current share price implies earnings attrition in this business unit forever. This is an unlikely result, especially given Ardent is slated to shortly reopen Dreamworld after receiving the all clear from the safety committee. Accordingly, Village is my top stock for December.

Motley Fool contributor Rachit Dudhwala owns shares in Village Roadshow.

Tom Richardson: Magellan Financial Group Ltd  (ASX: MFG)

I expect the international equities manager will post a record-breaking funds under management level of more than $45 billion in early December and that this will be warmly received by the notoriously short-term focused market. Over the long term this business still retains the key advantage of being founder controlled and therefore it’s able to keep a sharp focus on its core cost and performance drivers in terms of staffing. The funds management game is also scalable and with a decent dividend and reasonable valuation I think the shares look a buy.

Motley Fool contributor Tom Richardson owns shares in Magellan Financial Group. 

Sean O’Neill: Antipodes Global Investment Company Ltd (ASX: APL)

A new Listed Investment Company (‘LIC’) covering global markets, Antipodes is run by Platinum Investment Management’s former deputy Chief Investment Officer, Jacob Mitchell. Antipodes uses a long-short strategy, where it buys some companies and short-sells others in order to achieve better-than-benchmark returns with lower risk. Fees are modest at 1.1% per annum and the share price is on par with its net tangible assets. Better yet, Antipodes’ top 10 holdings are drastically different from its benchmark, which suggests it is actively attempting to beat the index. Antipodes doesn’t have a track record, but looks one of the more attractive LICs to enter the ASX recently.

Motley Fool contributor Sean O’Neill doesn’t own shares in Antipodes Global LIC or Platinum Investment Management.


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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. 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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