The Motley Fool

Top stock picks for September

We asked our writers to name some of their favourite shares to buy for the month of September and below is what they came up with.

Regan Pearson: Ellex Medical Lasers (ASX: ELX)

The share price of Ellex Medical Lasers has fallen significantly over the last six months and is at the top of my watch list for September. Ellex Medical designs and manufactures products to support eye health, but is especially focused on its iTrack product which relieves glaucoma – a disease with growing global significance as populations age.

The company reported a weak 2017 result, but took big steps to invest in a sales team to accelerate sales growth in the U.S. I think the company has a strong product and is well positioned to achieve its growth plans.

Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned.

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

With this private hospital operator’s shares down over 18% from their 52-week high, I think now could be an opportune time to make a buy and hold investment. While its recent full-year result and FY 2018 guidance may have fallen short of expectations, I believe there is significant long-term growth ahead for the company due to the rising demand for healthcare services globally as a result of ageing populations and increased chronic disease burden.

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

Sean O’Neill: CBL Insurance Group (ASX: CBL)

I’ve written previously about CBL, which provides building insurance and other niche forms of insurance in Europe and the ANZ region. CBL is expanding both geographically and by adding new products, and recent half-year results saw a 29% leap in Gross Written Premium. Profit growth has been weak due to currency headwinds and an increase in insurance provisions. There is an open question in my mind about whether the company’s low loss ratio is maintainable ‘through the cycle’ or simply reflects benign years recently, and this is a key risk. In general, I think CBL is a high-quality business and worth a closer look.

Motley Fool contributor Sean O’Neill owns shares in CBL Insurance.

Ian Crane: Aristocrat Leisure (ASX: ALL)

Shares in global gaming solution provider (think “pokie machines” and digital gambling) Aristocrat Leisure have slumped around 10% since reaching a high of $23.66 in June, largely on the back of the strengthening Australian dollar. Aristocrat reported well last May, with strong growth in revenue and profit across its American, International and Digital segments.

The company expects full year earnings growth to be in the range of 20%-30% to justify its relatively high trailing P/E of 30x. With significant USD earnings, the short-term strength of the AUD could present a buying opportunity for a stock that has been one of the ASX’s top performers in recent years.

Motley Fool contributor Ian Crane has no position in any stocks mentioned.

Rachit Dudhwala: BWX Limited (ASX: BWX)

Natural skincare and cosmetics business BWX reported a robust set of full-year results during August. The owner of Australia’s best-selling organic skincare range – Sukin – announced group revenue increased 34% to $72.7 million, which allowed the group to post a whopping 41.9% increase to net profit after tax.

Although blockbuster growth rates like these are likely to slow in the future, BWX recently secured lucrative shelf space in the likes of Coles supermarkets and I believe the company has a long way to run.

Motley Fool contributor Rachit Dudhwala does not own shares in BWX Limited.

Tom Richardson: Macquarie Group Ltd (ASX: MQG)

A lot of talk over earnings season has centred on the idea that commodity shares are the place to be as inflation and growth return to the world economy, but dud cash-sucking businesses like miners aren’t my cup of tea. However, one business positioned to benefit from the themes of returning inflation and US or European economies performing better is Macquarie Group. The outlook is decent for the bank and it’s on an attractive valuation, with a 5.5% yield. You can’t ask for much more than that as an investor, and I’d be shocked if BHP Billiton outperforms Macquarie over the next 5 years.

Motley Fool contributor Tom Richardson owns shares in Macquarie Group.

Tristan Harrison: National Veterinary Care Ltd (ASX: NVL)

This business is the second-largest veterinary clinic business in Australia. In its just-released annual result it revealed that revenue grew 51% and underlying net profit after tax grew by 52.8%. Management also announced a fully franked dividend of 3 cents per share. The outlook for FY18 is revenue growth of at least 25%.

I think National Vet Care could be a large winner as it acquires more clinics and grows its margins over the next few years.

Tristan Harrison owns shares of National Veterinary Care Ltd.

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The Motley Fool Australia owns shares of BWX 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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