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Top stock picks for May

Credit: Simon Cunningham

We asked our writers to name some of their favourite stocks to buy this November. Below is what they came up with.

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

This is a business I continue to like thanks to its founder-led nature giving it especially good cost control for a growing funds management business. It also offers exposure to the strength of US equity markets and a falling Australian dollar. Retail inflows have been soft recently with the fallout from its Magellan Global Trust raising, but institutional business development continues to do nicely.

It should post strong growth for the six months to June 30 2018, with the stock ($23.90) on around 16x estimated forward earnings and likely to offer a forward dividend yield above 4% plus full franking credits. Good value given the operational quality of the business and underlying growth rates.

Motley Fool contributor Tom Richardson owns shares in Magellan.

James Mickleboro: Bingo Industries Ltd  (ASX: BIN)

The waste management industry isn’t the most glamorous industry to invest in, but I believe Bingo Industries could provide attractive returns for investors over the next decade.

Thanks to Australia’s population growth and the high barriers to entry and defensive characteristics of the waste management industry, I feel Bingo could grow its earnings at a solid rate for some time. Especially if its plan to expand nationwide over the next decade is a success.

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

Tristan Harrison: Greencross Limited (ASX: GXL)

Greencross is Australia’s leading pet business with its Petbarn retail stores and Greencross vets. It’s trading close to its two-year low, yet continues to post profit growth year after year.

I think it looks pretty good trading at only 12x FY19’s estimated earnings with a grossed-up dividend yield of 5.3%. I believe it has defensive earnings because its two services are like a supermarket and a hospital, except for pets. The number of pets is growing in Australia and Greencross has a lot of recurring revenue through annual vet check-ups and regular pet food purchases.

Motley Fool contributor Tristan Harrison owns shares of Greencross Limited.

Kevin Gandiya: ResMed Inc. (CHESS) (ASX: RMD)

There are many reasons to like this sleep and respiratory healthcare business. It’s a high growth leader in a large untapped market, it’s continuously innovating and it embraces new technology trends. The company’s founder is its chairman and his son who has been a ResMed employee for over 15 years, is the current CEO. Their wealth and legacy are aligned with shareholders’ interests.

While its shares aren’t cheap, I think the company is a long-term winner with a high-quality business.

Motley Fool contributor Kevin Gandiya has no financial interest in ResMed shares.   

Ramsay Health Care Limited  (ASX: RHC)

The Ramsay share price has tracked lower over the last 12 months. Shares are down 10% from a year ago and sit just above 12-month lows. Nonetheless, fundamentals continue to be strong and the business has tailwinds. I think Ramsay is a wonderful business at a fair price and I’d buy and hold for many years.

Motley Fool contributor Stewart Vella owns shares in Ramsay Health Care Limited.

Tommaso Autorino: Iluka Resources Limited  (ASX: ILU)

Iluka is a leading producer of titanium ore and zircon sand, two minerals with several applications, ranging from surface finishing to electronics. The company raised its expected prices on both products recently, with strong demand from various industries and limited scope for an increase in supply by competitors, prices should remain high for some time.

Shares in Iluka gained 40% over the past year, but I think there’s room for further growth. Based on consensus estimates, the stock changes hands at around 16x FY19’s earnings, which seems reasonable for a company with this outlook.

Motley Fool contributor Tommaso Autorino has no financial interest in Iluka Resources Limited.

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The Motley Fool Australia owns shares of and has recommended Greencross Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited and ResMed Inc. 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 Scott Phillips.

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