The Motley Fool

Top ASX stock picks for July

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

Tom Richardson: a2 Milk Company Ltd (ASX: A2M)

This is the one China consumer facing stock I think is probably still worth buying on the ASX. Its a2 only protein baby formula and supermarket milk continues to see strong sales growth in Australia, China and now the US. For the 9 months to March 31 2019 it grew revenues 42% to NZ$938m with full year EBITDA margins expected to be between 31%-32%. It has a strong balance sheet with $288 million cash on hand, is on 30x annualised earnings, and has a track record to suggest its reinvestments for growth could deliver again in FY20 and beyond.

Motley Fool editor Tom Richardson owns shares in a2 Milk.

Sebastian Bowen: WAM Global Ltd (ASX: WGB)

I already own shares of this Listed Investment Company (LIC), but the WAM Global share price is currently trading for around a 14% discount to its underlying value making it my pick for July. Buying shares at a discount is a great opportunity and I hope to be adding some shares at 14% off very soon. WAM Global focuses on investing in small to mid-cap companies around the world and aims to start paying a fully-franked dividend in the near future.

Motley Fool contributor Sebastian Bowen owns shares of WAM Global Ltd.

Brendon Lau: Commonwealth Bank of Australia (ASX: CBA)

I am not a massive fan of banking stocks but it’s hard to see CBA losing favour with investors in the run-up to the reporting season where it will lay its fat and juicy fully-franked dividend egg. The dividend is particularly attractive if the RBA cuts rates in July or August (as the market anticipates). I also regard CBA’s dividend as safer than other income stocks like Telstra Corporation Ltd (ASX: TLS).

Motley Fool contributor Brendon Lau holds shares in Commonwealth Bank of Australia.

James Mickleboro: ResMed Inc. (ASX: RMD)

My pick for July is this sleep treatment-focused medical device company. Over the last decade, ResMed’s shares have generated market-beating returns for investors thanks to the strong profit growth it has delivered due to the increasing demand for its industry-leading products. Pleasingly, with its addressable market tipped to grow materially over the next decade as more and more people are diagnosed with sleep apnoea globally, I believe this positive trend can continue for the foreseeable future.

Motley Fool contributor James Mickleboro does not own shares of ResMed Inc.

Tristan Harrison: Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is a real estate investment trust (REIT) that owns berry and citrus farms, it earns both base rental and a profit share.

REITs are in high demand at the moment and trading above their underlying net tangible asset (NTA) values. Vitalharvest is likely trading slightly underneath its underlying NTA value and is targeting a high payout of net rental to shareholders, so I think this is a good time to buy some shares for yield. With its peers trading expensively and Vitalharvest’s tenant currently facing difficulty from fruit flies and crumbly berries, I hope to buy shares soon.

Motley Fool contributor Tristan Harrison does not own shares in Vitalharvest Freehold Trust.

Rhys Brock: Bubs Australia Ltd (ASX: BUB)

Bubs’ strategy of targeting the lucrative Chinese market has been paying off remarkably well recently. The organic baby foods manufacturer has made a number of positive steps towards seizing a sizeable chunk of the Chinese market, not least of which was its April announcement of a strategic partnership with Hong Kong private equity firm C2, which comes with the backing of Chinese e-commerce giant Alibaba. And a further strategic partnership was announced just this Thursday with Kidswant, the number one baby store chain in China. Bubs’ share price skyrocketed 30% higher on the news.

I think this is going to be a breakout year for Bubs, and it is fast becoming my favourite ASX growth stock.

Motley Fool contributor Rhys Brock does not own shares of Bubs Australia Ltd. 

Lloyd Prout: Volpara Health Technologies Ltd (ASX: VHT)

Volpara has more than doubled over the last year, but I believe it can still be a great buy for long term investors. With the market reaching record highs, and with Volpara being a small cap company, there could be lots of volatility ahead.

The company uses a ‘land and expand’ business model and the latest $55 million capital raising and acquisition of MRS Systems, Inc. should improve the range of products on offer to existing and new customers. This should help revenue continue to grow at a fast rate.

Motley Fool contributor Lloyd Prout does not own shares in Volparah Health Technologies Ltd and expresses his own opinion.

Nikhil Gangaram: Zip Co Ltd (ASX: Z1P)

I think this buy-now-pay-later company is in the buy zone for July.

The Zip Co share price has surged more than 200% in the last 6 months and could go further in the second half of the year. The payment company reported an impressive quarterly report which saw quarterly revenue increase 20% to a record $23 million. Zip is well positioned for future growth having signed partnerships with quality businesses like Kmart, Bunnings and Chemist Warehouse. Potential to expand overseas could also supercharge growth.

Motley Fool contributor Nikhil Gangaram own shares in Zip Co Ltd.  

Mitchell Perry: Reliance Worldwide Corporation Ltd (ASX: RWC)

My pick for July is Reliance Worldwide.  The Reliance Worldwide share price has had a tough run recently falling 26% since the beginning of May.  At current prices, however, I believe Reliance Worldwide shares constitute good value and a worthwhile investment.  This company has market-leading push-to-connect products and an expanding global footprint and I believe these two factors will ensure the future is much brighter than the recent past for Reliance Worldwide.

 Motley Fool contributor Mitchell Perry does not own shares in Reliance Worldwide Corporation Ltd.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ and ZIPCOLTD FPO. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST FPO, ResMed Inc., and VOLPARA FPO NZ. 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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