The Motley Fool

Top ASX stock picks for November

We asked our Foolish writers to pick some of their favourite ASX shares to buy this November. Here is what they came up with…

Tristan Harrison: Challenger Ltd (ASX: CGF)

Challenger is the market-leader of annuities in Australia, providing a guaranteed source of income for retirees for their capital. There should be good times ahead for annuity sales because the number of over-65s is projected to grow by 40% over the next 10 years and 70% over the next 20.

Mandatory super contributions and compounding should see those annuities get bigger over time. Challenger should benefit from supportive policies like means testing and that superfunds must offer guaranteed income as an option. Rising interest rates have sent its valuation to under 15x FY19’s estimated earnings.

Motley Fool contributor Tristan Harrison owns shares of Challenger Ltd.

Brendon Lau: Fortescue Metals Group Limited (ASX: FMG)

I’ve never been a fan of this iron ore miner but I think Fortescue Metals Group Limited will soon get its 15 minutes of sunshine.

Its latest quarterly production report indicated that the large price discount on its lower quality ore is finally closing and the stock is likely to get re-rated if the price gap reverts to its historical mean. What’s more, the stock is cheap and there’s little good news priced into its share price.

What this means is the stock may outperform BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) over the next six months.

Brendon Lau owns shares in Fortescue Metals Group Limited.

Tim Katavic: Appen Ltd (ASX: APX)

Appen is a global leader in developing high-quality human annotated datasets for machine learning and artificial intelligence. The company services some of the world’s leading technology companies, automakers and governments.

Appen delivered organic revenue growth of 47% in the first half of FY18 with the acquisition of Leapforce last December resulting in group revenue rising by 106% to $152.8 million and underlying EBITDA growth of 100% to $25.6 million. The sell-off in global equity markets over the last month sees the stock currently trade for an inexpensive multiple of 24 times forward earnings with consensus expectations of 30% earnings growth in FY19.

Motley Fool contributor Tim Katavic owns shares in Appen Ltd.

Kevin Gandiya: Praemium Ltd (ASX: PPS)

The Praemium share price is down 33% since its peak when the recent market turmoil started but the business itself is doing well.

The high growth fintech company just recently passed $8.5 billion in funds under administration and tailwinds within the superannuation and pension fund industry could propel it further forward. At an 8x price to sales ratio, Praemium shares are still pricey but with a 23% compounded annual revenue growth rate since 2014 that is showing no signs of slowing, I think this is one to keep on your radar.

Motley Fool contributor Kevin Gandiya has no financial interest in Praemium. 

Carin Pickworth – Perpetual Limited (ASX: PPT)

Perpetual has some runs on the board – it’s been around since 1886 after all.

There’s been negative press about loss of FUM and Perpetual’s “old school” style of value investing, and I concede it’s hard for this company to compete with market darling growth stocks, but when interest rates rise Perpetual is unlikely to crash and burn like some newcomers.

A real opportunity could present for Perpetual if the big banks continue to dump their wealth management products, but if you want an in, Perpetual is in the buy zone right now, in my opinion – down close to 40% from its 52-week high of $53.89 in February.

Motley Fool Contributor Carin Pickworth has no financial interest in Perpetual shares.

Jacob Ballard: Nextdc Ltd (ASX: NXT)

Shares in the leading Australian data centre provider have pulled back over the last 6 months from a peak of $8.10 to $5.84. This represents a 30% discount from its peak and I believe shares now offer good value.

The pullback seems to be due to investor concerns from the FY18 result presentation, that showed lower new capacity wins for 2H18 than expected. However, I believe this is purely an issue of contract lumpiness, and the exponential growth of data creation and cloud storage going forward will result in Nextdc winning excess new capacity long into the future.

Motley Fool contributor Jacob Ballard has no financial interest in Nextdc Ltd Group.

James Mickleboro: Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is a leading gaming technology company which develops, manufactures, and sells some of the most popular pokie machines in the world. Underpinning the growth of its core pokie machine business is its fledgling digital business.

This has been growing at an impressive rate over the last couple of years and shows little sign of slowing. In fact, management believes its digital portfolio is well positioned to address a broad spectrum of opportunities in the US$50 billion mobile gaming market. This could make it a key driver of growth for many years to come.

Motley Fool contributor James Mickleboro has no financial interest in Aristocrat Leisure Limited.

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The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Appen Ltd. 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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