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Top stock picks for July

Credit: Simon Cunningham

We asked our writers to pick their favourite stock picks for July and below is a list of what they came up with.

Sean O’Neill:  Experience Co Ltd (ASX: EXP)

Experience Co (formerly Skydive The Beach) is an adventure tourism business operating in Australia and New Zealand. Previously all about skydiving, Experience Co has expanded into reef cruises, whitewater rafting, hot-air ballooning and helicopter tours. The nature of many of these attractions mean that often there are only 1 or 2 local providers, and Experience Co should be able to better promote and cross-sell its attractions, claiming market share. While it’s not cheap on the face of it, I think Experience Co has the potential to grow substantially and reward shareholders over the next 5-10 years. 

Motley Fool contributor Sean O’Neill owns shares in Experience Co.  

Tommaso Autorino: NRW Holdings Limited  (ASX: NWH)

NRW is a mining and civil contractor, which means it has exposure to two of the main sectors of the Australian economy: resources and infrastructure. The company closed some important deals recently and its order book is now at a record high of over $2 billion.

The stock trades at 19x trailing earnings after its recent price run, but it has significant potential for growth in coming months. Its revenue was $370 million in FY17, but it’s expected to grow by 40% this year and to exceed $1.1 billion next year.

Motley Fool contributor Tommaso Autorino has no financial interest in NRW Holdings Limited.

Tristan Harrison: Specialty Fashion Group Ltd  (ASX: SFH)

Specialty Fashion Group is selling all but one of its retail chains. It’s selling Millers, Katies, Crossroads, Autograph and Rivers for $31 million but it’s keeping City Chic. However, the other ones were losing money, so SFG will become more profitable afterwards. 

City Chic is forecast to grow its revenue by over 22% between FY16 and FY18. It also improved its earnings before interest, tax, depreciation and amortisation (EBITDA) margin from 7.5% to 10.5% and earnings before interest and tax (EBIT) margin from 4.4% to 7.3% between FY16 and the end of December 2017. Plus, around 37% of its sales are online. 

Motley Fool contributor Tristan Harrison does not own shares of Specialty Fashion Group Ltd.

Kevin Gandiya: Afterpay Touch Group Ltd  (ASX: APT)

Afterpay Touch has been a high-flying company with its share price up 200% over the last year alone. That’s all in the past though and what matters now is looking forward and understanding how the company can keep growing. That’s why last month’s announcement to enter the world’s largest retail market matters. I like companies with a global footprint and Afterpay’s recent expansion into the United States certainly got my attention. There will be ups and downs but if Afterpay can conquer this gigantic market, then today’s share price will look cheap. 

Motley Fool contributor Kevin Gandiya has no financial interest in Afterpay Touch. 

Dave Gow: Ramsay Health Care Limited  (ASX: RHC)

Ramsay is currently down more than 25% this year after the company downgraded its forecasts, from earnings growth of 8%-10% to a still reasonable 7%. My view is the market has overreacted, and with a price-to-earnings multiple of around 19, Ramsay is now good value.

Despite the share price drop, over the last 10 years Ramsay has provided investors with a total return of 22% per annum and dividends which have grown at a rate of 17% per year. Even with a slower growth rate going forward, Ramsay represents a solid investment, with hospitals and medical facilities across the globe. 

Motley Fool contributor Dave Gow owns shares in Ramsay Health Care Limited.

Tom Richardson: Starpharma Holdings Ltd (ASX: SPL)

This biotech is a speculative play that I wouldn’t bet the house on, but it could deliver big returns if it successfully commercialises its product portfolio. The company’s flagship product is VivaGel BV and it already has regulatory approval in Europe, Latin America and elsewhere. This week it signed a deal with pharmaceutical giant Mundipharma to distribute the product in Europe, while regulatory approval in the U.S is hoped for soon. Starpharma is also working with AstraZeneca in developing new delivery methods for cancer drugs.

It has no debt and $54 million cash in hand, with a knocked-down share price at $1.18 presenting a speculative opportunity.

Motley Fool contributor Tom Richardson has no financial interest in Starpharma shares.

Brendon Lau: Nufarm Limited  (ASX: NUF)

I believe shares in Nufarm could outperform in the new financial year as investors focus on the earnings uplift from its omega-3 enriched canola seeds. The seed and crop protection solutions supplier has been cast into the sin bin after its recent profit warning due to adverse weather conditions, but I don’t think the negative sentiment will persist for long. The new seed product is a potential game changer for the industry given that supply of omega-3 comes from fish. This has put pressure on wild stock but the farmed fish industry is also mired in environmental concerns.

Motley Fool contributor Brendon Lau does not own shares in Nufarm Limited.

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The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Ramsay Health Care 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 Scott Phillips.

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