The Motley Fool

Top ASX Stock Picks for October

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

Tom Richardson: Xero Limited (ASX: XRO)

Is the cloud (online only) accounting business I’ve tipped a couple of times before that I continue to like as a decent long-term growth bet. It’s growing strongly in the UK, North America (Canada), ANZ, South Africa and its home ANZ market. It also boasts attractive economics thanks to its software-as-a-service business model and a market-leading product that should provide some pricing power down the line. Based on a 141.73 million shares on issue today the market cap is $8.93 billion and I think it has room to run higher. 

Motley Fool contributor Tom Richardson owns shares in Xero.

Tristan Harrison: Webjet Limited (ASX: WEB)

The Webjet share price continues to drift lower, particularly due to the worries about the effects of Thomas Cook going down.  

But Webjet management has quantified what the negative effects will be to FY20 earnings. FY21 and beyond looks very promising for WebBeds organic revenue growth and operating profit margin. I think it’s quite rare to find a fast-growing ASX share with a big tech slant trading at an FY21 earnings multiple of low double digits. Over the next three years, I think the Webjet share price will seem cheap, with a growing dividend too.

Motley Fool contributor Tristan Harrison does not own shares in Webjet Limited.

Sebastian Bowen: Cleanaway Waste Management Ltd (ASX: CWY)

My pick for October is Cleanaway. I think waste management is one of the most promising (if unexciting) growth areas to invest in. China’s decision to no longer accept foreign waste/recyclables is a huge opportunity for this company to cement its large market share in Australia, and I believe further government support for private waste managers will continue to underpin growth. Cleanaway’s most recent earnings numbers also show massive growth ahead, so now might be a great time to pick up shares at a discount. 

Motley Fool contributor Sebastian Bowen does not own shares of Cleanaway Waste Management Ltd.

Brendon Lau: Audinate Group Ltd (ASX: AD8)

Audinate Group’s technology is well placed to become the de facto standard in the music and audio industry. The recent pullback in the Audinate share price from its high of $8.54 represents a good buying opportunity as the stock is trading on a relatively modest market cap of under $500 million. If Audinate’s technology does become an industry benchmark, its share price should be worth a lot more.

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

James Mickleboro: Nearmap Ltd (ASX: NEA)

With Nearmap shares down materially from their all-time high, I think now would be a good time to consider an investment in this aerial imagery technology and location data company. Nearmap has been growing at a very impressive rate over the last few years thanks to increasing demand for its services in both Australia and North America. Due to the quality of its offering, key new product releases, and its massive market opportunity in the United States, I am confident it will continue its strong form in FY 2020 and beyond.

Motley Fool contributor James Mickleboro does not own shares of Nearmap Ltd.

Kenneth Hall: Macquarie Group Ltd (ASX: MQG)

Macquarie shares are currently yielding 4.4% per annum and look to be a good value buy in October.

The Macquarie share price has climbed 23.5% so far this year which means an outperformance of 154 basis points (bps) over the S&P/ASX200 Index (ASX: XJO).

On top of this year-to-date performance, Macquarie shares have proven to be good value in the Financials sector as the Aussie banking group emerged relatively unscathed from the 2018 Royal Commission. With new CEO Shimara Wikramanyake having taken the reigns for over a year now, Macquarie’s strong financial results thus far demonstrate the good times could continue in 2020.

Motley Fool contributor Kenneth Hall does not own shares in Macquarie Group Ltd.

Mitchell Perry: Flight Centre Travel Group Ltd (ASX: FLT)

I have had doubts about Flight Centre in the past, given its large footprint of stores, in what may become an online-only industry. 

However, Flight Centre continues to deliver strong results, averaging 19% ROE over the past 5 years and growing TTV 23 of the past 24 years.  Its international business is also delivering, contributing more profits this year than the domestic side of the business, with plenty of room still left to grow.  This makes me believe, at current prices, FLT shares are one of the better value investments on the ASX today.

Motley Fool contributor Mitchell Perry does not own shares in Flight Centre Travel Group Ltd. 

Rhys Brock: Pointsbet Holdings Ltd (ASX: PBH)

Since listing for $2.00 in June, shares in corporate bookmaker Pointsbet have surged 80% higher to $3.60 as at the time of writing. And while investing in the gambling industry may not be to everyone’s tastes, the amount of money Australians plough into one of their favourite vices is difficult to ignore. Australians spent close to $23.7 billion on gambling in FY17, and the fastest growing category was sports betting.

What makes Pointsbet noteworthy is the fact that it isn’t just targeting the Australian market – its sights are firmly set on the US, where many states are beginning to relax their restrictions on online sports betting. It’s a risky play, but if its US strategy pays off the returns to shareholders could be enormous.

Motley Fool contributor Rhys Brock does not own shares of Pointsbet Holdings Ltd.

Nikhil Gangaram: Speedcast International Ltd (ASX: SDA)

The Speedcast International share price is down more than 58% for the year, however, I think it could be shaping for a run in October.

In its half-year report earlier this year, the satellite services company downgraded its full-year earnings forecast citing weak operating conditions and delays in Phase 2 of the NBN. However, Speedcast still expects solid growth over the long term, especially from its maritime and government segments. The lower share price has also attracted a major investor with Mitsubishi UFJ Financial taking a 5.46% stake in the company. This should give investors a vote of confidence as they start hunting for company’s that have been oversold following reporting season.

Motley Fool contributor Nikhil Gangaram does not own shares of Speedcast International Ltd. 

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AUDINATEGL FPO and Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited and Macquarie Group Limited. The Motley Fool Australia has recommended AUDINATEGL FPO, Nearmap Ltd., Pointsbet Holdings Ltd, and Webjet 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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