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Top ASX stock picks for December

Credit: Simon Cunningham

It’s that time again! We asked our Foolish writers to pick some of their favourite ASX shares to buy this December. Here is what they came up with…

Tristan Harrison: Paragon Care Ltd.  (ASX: PGC)

Paragon Care is a medical device, equipment and product distributor which sells through a single online platform to customers like hospitals and aged care facilities.

It’s trading at around 10x FY19’s estimated earnings, yet it could deliver high single-digit organic revenue growth over the long-term with growing profit margins. Healthcare is a defensive sector, meaning Paragon should be able to weather a downturn if one happens.

Rising interest rates are a concern, but I think the current low price makes up for the risks, particularly with the steadily growing dividend.

Motley Fool contributor Tristan Harrison owns shares of Paragon Care Ltd.

Dave Gow: Sydney Airport Holdings Pty Ltd (ASX: SYD)

Shares in Sydney Airport are down more than 10% from two months ago, while the business is doing just fine. Passenger numbers continue to grow, with international traffic up 6% from this time last year. It continues to add more flights to more destinations, improve the retail offering, along with other amenities and new accommodation.

Being a dominant Australian airport, the company also has a good degree of pricing power. Solid earnings growth has enabled Sydney Airport to increase distributions by around 10% per annum over the last 5 years. And if these factors continue to play out, further growth looks likely.

Motley Fool contributor Dave Gow owns shares in Sydney Airport.

James Mickleboro: NEXTDC Ltd (ASX: NXT)

This data centre operator’s shares have pulled back significantly since peaking at $8.19 in June. I believe this could be a buying opportunity for investors that are prepared to hold onto its shares for the long-term.

This is because I think NEXTDC is positioned perfectly to profit from the cloud computing market that continues to grow at an impressive rate. Demand has been so strong for data centre services that NEXTDC recently had to pull forward capacity expansion plans at its Sydney S2 centre to satisfy it.

Motley Fool contributor James Mickleboro owns shares of NEXTDC.

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 company’s latest results revealed strong revenue growth and increasing operating leverage which demonstrate how scalable the business is. Despite the solid underlying performance of the business, its shares are now 20% cheaper than they were a few weeks ago primarily due to a broader market sell-off. I think it creates a good opportunity for long-term investors looking to add a high-quality company to their portfolio.

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

Stewart Vella: Challenger Ltd (ASX: CGF)

Challenger is down by a third from its 52-week high of $14.42. Delays on the governments Retirement Income Framework seem to have hit the share price, but this is simply a delay to policy rather than anything permanent. Further, while earnings were down year on year, cash flow has been steadily increasing.

I think it’s a well-run company that offers steady growth. Today’s price seems fair to me, and I am inclined to buy the stock and hold it for the long term.

Motley Fool contributor Stewart Vella owns shares of Challenger Ltd.

Tim Katavic: Bapcor Ltd (ASX: BAP)

Shares in automotive parts distributor Bapcor have fallen 22% from their all-time high of $7.85 in early September. The company has an impressive track record in growing earnings with a compound annual growth rate of 32% over the last 4 years. Bapcor is expected to grow earnings by around 12% in FY19 and FY20.

At current prices, investors would be paying around 18 times FY19 earnings which is not expensive for a premium business. Bapcor has also recently begun an expansion into Asia which is something to keep an eye on moving forward.

Motley Fool contributor Tim Katavic has no financial interest in Bapcor Ltd.

Brendon Lau: Afterpay Touch Group Ltd (ASX: APT)

The outlook for Afterpay improved significantly after ASIC indicated the service didn’t need to come under national credit laws. Worries that new restrictive regulations would be forced onto the company were the key reason the stock has crashed by a third of its value in the past three months.

I think the stock is poised for a sustained bounce and a conversation I had with a retail consultant adds to my confidence. He said retailers love the Afterpay service as it increases the probability a consumer will make a purchase.

Brendon Lau owns shares in Afterpay.

Want more? The Motley Fool has revealed five of the best stocks for investors to buy now…

5 Companies we like better than Afterpay

When ace stock picker Scott Phillips has a buy recommendation, history suggests it can pay to listen.

Scott recently revealed what he believes are the five best ASX stocks for investors to buy right now… and Afterpay wasn’t one of them! That’s right — he thinks these 5 stocks are even better buys.

See the 5 stocks

The Motley Fool Australia owns shares of and has recommended Bapcor, Challenger Limited, and Sydney Airport Holdings Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Bravura Solutions Ltd. The Motley Fool Australia has recommended Paragon 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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