The Motley Fool

Top ASX Stock Picks for August

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

Tom Richardson: Xero Limited (ASX: XRO)

Full of chutzpah (or potentially hubris) having recently tipped big winners like Magellan, Dicker Data, Nearmap, and a2 Milk just last month, I’m going to push the boat out this month and go with enterprise facing cloud accounting business Xero at $64.92. This is another business I’ve regularly tipped over the past years thanks to its strong organic growth rates, scalability, and attractive SaaS economics. I was a bit miffed about the departure of former CEO and founder Rod Drury to a non-exec director role, but the business is tracking well under new CEO Steve Vamos. It’s also operating in huge addressable markets with the UK, US, Canada, and South Africa still big growth opportunities, among others. 

Motley Fool editor Tom Richardson owns shares in a2 Milk, Xero, Magellan, Dicker Data and Nearmap.

Sebastian Bowen: CSL Limited (ASX: CSL)

My pick for August is the ever-green grower that is CSL. Although the company is now nudging its all-time high of $232.69, CSL is one of those rare stocks where yesterday was usually the best time to buy in – despite its perennial share price premium. CSL is also one of the best healthcare companies on the ASX and (in my opinion) will continue to dominate its fields of blood-plasma research and vaccine development for the foreseeable future. This company remains number one on my watchlist and I’ll certainly be keeping my eye on CSL this August.

Motley Fool contributor Sebastian Bowen does not own shares of CSL Limited.

Tristan Harrison: WAM Global Limited (ASX: WGB)

WAM Global is a LIC which invests in global shares.

I truly believe that to make decent returns into the longer-term we need to focus on investment ideas that provide earnings optionality from several (or many) sources. I also think that we need to think more about investments beyond the ASX for some of our portfolio – only 2% of the global market is on the ASX. That’s why I think WAM Global is worth considering, it can invest anywhere in the world and was at an 11% discount to its NTA based on the 24 July share price.

Motley Fool contributor Tristan Harrison owns shares of WAM Global Limited.

Brendon Lau: BlueScope Steel Limited (ASX: BSL)

The steelmaker has not partaken in the market rally that pushed the S&P/ASX 200 (Index:^AXJO) (ASX: XJO) index up by over 20% this year to a record high but I think it will play catch-up in August when it releases its profit results. I am expecting the outlook for BlueScope to improve as US steel spreads have started to recover but this good news is yet to be fully priced into its shares.

Motley Fool contributor Brendon Lau owns shares in BlueScope Steel Limited.

Kenneth Hall: Alumina Limited (ASX: AWC)

Alumina Limited has been among the top-yielding ASX200 stocks for the last few years, but I think August could be the time to buy the Aussie miner. The Alumina share price is trading at $2.35 per share, near the bottom of its 52-week trading range, and is currently yielding more than 10% per annum. Provided global alumina prices hold in the short-term, and Alumina can post a solid earnings result in August, I’d expect to see capital gains as well as income from Alumina before the end of the year.

Motley Fool contributor Kenneth Hall does not own shares in Alumina Limited.

Mark O. Witten: Coles Group Ltd (ASX: COL)

Even though Coles is up 22% YTD, I still believe it is the best positioned Australian retailer to own. Why? Because I expect improved food inflation will assist in top-line growth, and this will expand its operating margin. The result: massive operational leverage to its earnings!

I am confident that management will provide greater insight into how it expects to achieve the A$1bn cost-out target when the company reports results on August 22. If management can quantify how much of that cost savings will flow through to the bottom line, we could see a further rerating of Coles from a 20X forward PE to a 22X, in line with peer Woolworths Group Ltd (ASX: WOW).

Motley Fool contributor Mark O. Witten does not own shares of Coles Group Ltd.

Saran Likitkunawong: Corporate Travel Management Ltd (ASX: CTD)

As earnings season rolls out, I’m predicting Corporate Travel Management to be one of the big winners as it prepares to release its full FY19 results on August 21. Despite VGI Partners short thesis in October 2018, Corporate Travel Management was able to produce phenomenal half-year results in February 2019. EBITDA grew by 21%, whilst the group’s Asia performance saw Total Transaction Volumes rise by 60%. Although the company is confident in achieving $150 million in Earnings (representing 20% growth in FY18), its share price is still trading 18% below this time last year.

Saran Likitkunawong does not own shares in Corporate Travel Management Ltd. 

Lloyd Prout: Aristocrat Leisure Limited (ASX: ALL)

The Aristocrat share price has rallied 45% year-to-date, after a rocky end to 2018. A catalyst for this was a strong result in the first half of FY19. Adjusted for significant items, revenue grew by 29.8%, while normalised NPAT rose 14.8%.

Australian’s are not alone in their love of gambling and I don’t see this changing anytime soon. With exposure to both pokies and the faster-growing digital gaming segments, the company is well-positioned to grow over the medium term. Despite the recent rally the share price is only back to prices achieved a year ago.

Motley Fool contributor Lloyd Prout does not own shares in Aristocrat Leisure Limited and expresses his own opinion.

Nikhil Gangaram: Audinate Group Ltd (ASX: AD8)

Although Audinate’s share price has surged more than 108% this year, I still think it could test highs in August. Audinate has been a boom stock in 2019, with the company providing hardware and software to the audio-visual (av) market. The company’s flagship Dante program eliminates the need for analog connectivity and has emerged as the leading digital platform in the AV sector.

Audinate’s products offer low-latency and superior sound quality, which has seen the company’s market share grow substantially. Audinate has some very high-quality customers and good partners, in addition, the company recently raised capital which could drive further innovation and growth.

Motley Fool contributor Nikhil Gangaram does not own shares of Audinate Group Ltd.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended a2 Milk, AUDINATEGL FPO and Corporate Travel Management Limited, Xero, Nearmap and Dicker Data. 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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