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Top stock picks for August

Credit: Simon Cunningham

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

Kevin Gandiya: Bravura Solutions Ltd (ASX: BVS)

Bravura owns the Sonata wealth management administration system which has been driving growth with many long-term contract wins. The latest one is with LGIM, a large European asset manager and the investment management arm of Legal & General Group, a FTSE 100 company listed on the LSE. Management are bullish on the outlook for Sonata and so am I. I think it could deliver long-term compounded annual growth for shareholders.

Motley Fool contributor Kevin Gandiya has no financial interest in Bravura Solutions Ltd.

James Mickleboro: Macquarie Telecom Group Ltd (ASX: MAQ)

I believe that Macquarie Telecom is a great way for investors to gain exposure to the cloud computing boom. The company’s Hosting (Cloud Services) segment has quickly become its biggest contributor to earnings after an impressive first half. The segment grew its EBITDA by a strong 38% on the prior corresponding period, meaning it now accounts for almost 60% of the company’s total EBITDA. With the shift to the cloud accelerating, I expect the segment to underpin a strong full-year result from Macquarie Telecom this month.

Motley Fool contributor James Mickleboro has no financial interest in Macquarie Telecom Group Ltd.

Brendon Lau: QBE Insurance Group Ltd (ASX: QBE)

This could be the month for the perennial laggard to shine. QBE has lost favour with investors over the past year on poor execution and disappointing earnings, but its operating environment has since improved substantially. I am counting on management to deliver a more upbeat result given the rise in U.S. government bond yields, a favourable exchange rate, reasonably benign claims environment and industry-wide insurance premium increases. If management can’t deliver half decent results under such conditions, it will have little credibility left with investors.

Motley Fool contributor Brendon Lau owns shares in QBE Insurance Group Ltd

David Gow: Virtus Health Ltd (ASX: VRT)

Virtus Health is Australia’s largest IVF provider, with clinics around Australia, as well as in Ireland, Singapore and Denmark.

The company currently holds around 34% market share of IVF cycles in Australia. Virtus is benefiting from a demographic tailwind, with people having babies later in life. Despite losing some market share recently to lower cost providers, I think the tailwind of a growing IVF market may make up for any loss of market share.

Its shares trade at an attractive valuation, around 14x earnings, and Virtus also pays a fully franked dividend of 4.7%.

Motley Fool contributor Dave Gow owns shares in Virtus Health Ltd.

Tristan Harrison: Propel Funeral Partners Ltd  (ASX: PFP)

Propel is the second-largest funeral provider in Australia and New Zealand. That doesn’t sound exciting, it definitely isn’t a business that’s going to double in size in one year. However, death volumes are expected to grow by 1.4% per annum between 2016 to 2025 and then increase by 2.2% per annum from 2025 to 2050 which will be a slow-and-steady tailwind.

In the meantime, Propel may grow significantly in size through acquisitions because there’s a lot of family operators out there which could be targets. It’s trading at 25x FY18’s estimated earnings.

Motley Fool contributor Tristan Harrison owns shares of Propel Funeral Partners Ltd.

Tom Richardson: Okta Inc. (NASDAQ: OKTA)

This San Francisco-based company is a business I recently bought shares in that is only available to international investors.

Readers who work at reasonably large internet-facing corporations may be familiar with its cloud-based software that assists employees managing passwords across multiple logins via a single interface. For the quarter ending April 30 2018 revenue grew 60% to US$83.6 million, although it still made an adjusted net loss of US$9.4 million.

Okta has US$547 million cash in hand to fund its growth and now has 4,700 enterprise clients using its software. The company has a market value around US$5.56 billion, which gives it room to grow far larger.

Motley Fool contributor Tom Richardson owns shares in Okta Inc.

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The Motley Fool Australia owns shares of Bravura Solutions Ltd. The Motley Fool Australia has recommended Virtus Health Limited. The Motley Foo's parent company has recommended Okta 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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