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Top ASX stock picks for January

Happy New Year, Fools!

As we do every month, we asked our Foolish writers to pick some of their favourite ASX shares to buy in January. Here is what they came up with…

Tristan Harrison: Costa Group Holdings Ltd (ASX: CGC)

Costa is Australia’s largest horticultural business, it grows tomatoes, mushrooms, berries, citrus fruit, and avocados.

The fresh food company is growing profits with a number of different avenues including expanding plantations, productivity improvements, bolt-on acquisitions, and major acquisitions. Costa may positively surprise the market in the future if it expands into another food category, such as the recent additional avocado pillar.

I am also hoping that Costa can achieve a decent level of price inflation with its produce from the improving Australian diets and higher demand from the Asian middle class.

Costa is trading at around 26x FY19’s estimated earnings.

Motley Fool contributor Tristan Harrison owns shares of Costa Group Holdings Ltd.

Brendon Lau: BHP Group Ltd (ASX: BHP)

The BHP share price is pregnant with an enticing US$1.02 (around $1.45) special dividend and will go ex-div on January 10.

Investors should buy the stock to claim the distribution plus franking and not worry about the prospect of its share price falling when it trades ex-div as I think it will soon recover. BHP has a bright outlook even in the face of a slowing Chinese economy as its one of the lowest cost minerals producers, has a strong balance sheet and is likely to announce further capital returns later in the new year.

Motley Fool contributor Brendon Lau owns shares of BHP Group Ltd.

David Gow: Accent Group Ltd (ASX: AX1)

Accent Group shares are down around 30% from their high earlier in the year. That’s despite the footwear retailer continuing to grow sales and earnings, as well as increase its online presence.

Earnings-per-share was up 12.2% over FY 18 and the dividend was boosted by 12.5%, with the company expecting further growth this year assisted by new store openings. Over the last 10 years, earnings and dividends have increased every single year.

Accent currently trades on an attractive valuation – just 13 times earnings and a 6.2% fully franked dividend yield.

Motley Fool contributor Dave Gow owns shares in Accent Group.

James Mickleboro: Appen Ltd (ASX: APX)

Although the Appen share price had a stellar 2018, I don’t think it is too late to consider an investment in the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence.

At 27x estimated FY 2019 earnings, I think Appen is the best value member of the coveted WAAAX group of tech shares. Especially given its direct exposure to machine learning and artificial intelligence markets that have been tipped to grow significantly over the next decade.

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

Tim Katavic: CSL Limited (ASX: CSL)

The sell-off in global equity markets has seen the share price of biotechnology company CSL fall around 20% from its all-time high of $232 in early September.

CSL outperformed the ASX 200 by 39% in 2018 after earnings per share rose by 30% in FY18. The company has forecast for underlying net profit after tax to rise by 10%-14% in FY19. Investors should note that CSL has regularly exceeded its own guidance in recent years, and it would not be a surprise if it does so once again with the weaker Australian dollar acting as another tailwind for the business.

Motley Fool contributor Tim Katavic owns shares in CSL Limited.

Tom Richardson: CSL Limited (ASX: CSL) … as well!

An easy choice this month as probably the ASX’s best company has fallen around 18% in price since later August to change hands for $187.50 today. Granted it was overvalued at $230 per share, but today’s valuation is reasonable given its moat, earnings growth and heavy investment in research and development.

I expect the stock will outperform in 2019 and beyond.

Motley Fool contributor Tom Richardson owns shares in CSL Limited.

The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Accent Group. 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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