The Motley Fool

Top ASX stock picks for February 2020

As we do each month, we asked our Foolish writers to pick their favourite ASX shares to buy in February 2020.

Here is what they came up with…

Tristan Harrison: Bubs Australia Ltd (ASX: BUB)

I think Bubs is Australia’s most promising infant formula business with its focus on goat milk products, it’s also launching cow-based, grass-fed infant formula products.

Bubs has done an excellent job at securing its milk supply and acquiring a CNCA-certified production facility.

The Bubs share price has drifted 30% lower over the past four months. In the first quarter of FY20 Bubs reported revenue growth of 58%. It if keeps growing revenue at an impressive double-digit rate it will only be a matter of time before it turns into attractive profit growth and, hopefully, share price growth.

Motley Fool contributor Tristan Harrison has no financial interest in Bubs Australia Ltd.

Sebastian Bowen: Newcrest Mining Ltd (ASX: NCM)

My pick this month is the ASX’s largest gold miner. I think Newcrest is a great stock to watch this February.

The Newcrest share price has recently been hit after the company reported that the drought may impact on gold production going forward. I don’t see this as a cause of concern as gold not mined now can always be mined later – maybe even for a higher selling price.

Newcrest has massive reserves of gold that on today’s prices exceed the value of the entire company. Thus, I think Newcrest could be a great value pick for the adventurous investor.

Motley Fool contributor Sebastian Bowen has no financial interest in Newcrest Mining Ltd.

James Mickleboro: Altium Limited (ASX: ALU)

Altium is a printed circuit board (PCB) design software platform provider. I believe it could be a great long-term option for investors due to its increasingly positive outlook.

Thanks to its exposure to the Internet of Things (IoT) market, demand for the company’s Altium Designer product has been growing strongly. And with the IoT market tipped to grow materially over the next decade, I believe demand will continue to strengthen in the coming years.

Management certainly appears confident that this will be the case. It is aiming to grow its revenue to US$500 million by FY 2025. This compares to the revenue of US$171.8 million Altium recorded in FY 2019.

Motley Fool contributor James Mickleboro has no financial interest in Altium Limited.

Nikhil Gangaram: Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel share price has been pummelled recently, down more than 18% in the last 2 weeks. In my opinion, the coronavirus hysteria which has resulted in a sell-off in transport stocks will subside in February.

Corporate Travel remains a well-diversified business with great exposure to global growth opportunities. The company’s business model offers superior customer service and cost savings to clients. Management has predicted a stronger second half in FY20 and analysts expect the company to leverage its value proposition for more market share.

Motley Fool contributor Nikhil Gangaram owns shares in Corporate Travel Management Ltd.

Mathew Donald: A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price has delivered a 12-month return of 27%. The reason I believe it’s a top February stock pick is the outlook delivered at the company’s AGM held in November 2019.

In the outlook presentation slide, the company states “we anticipate continued strong revenue growth” and “full year EBITDA margin %…to be stronger than previously communicated”.

I believe the A2 Milk share price has room to move after the sell-off from August to November and the subsequent rebound in the recent few months due to strong growth prospects.

Motley Fool Contributor Matthew Donald owns shares in A2 Milk Company Ltd.

Kenneth Hall: AGL Energy Ltd (ASX: AGL)

AGL Energy is looking like one of those great ASX dividend shares to buy in 2020.

The Aussie energy group’s shares have struggled for capital gains in recent times and are up just 35% in 5 years. However, this has meant that AGL shares are now yielding 6% per year.

I like AGL for the defensive exposure that the Energy sector provides as volatility increases in global markets. If you’re worried about downside losses but want solid income in 2020, then AGL could be in the buy basket.

Motley Fool contributor Kenneth Hall has no financial interest in AGL Energy Ltd.   

Michael Tonon: Bapcor Ltd (ASX: BAP)

The Bapcor share price has recently been sliding backwards. From a 12 month high of $7.52 in late November last year to trade at $6.32 today. However, I believe this could be a great buying opportunity for investors.

I like Bapcor for its growth on three fronts: organic, acquisitions and expansion. Bapcor has been organically growing at 2-3% per year, expanding its footprint of stores both here and overseas while also acquiring complementary businesses. 

Bapcor is my pick for February due to its attractive growth prospects, reasonable valuation and moderate dividend yield. 

Motley Fool Contributor Michael Tonon owns shares in Bapcor Ltd. 

Phil Harpur: NEXTDC Ltd (ASX: NXT)

NEXTDC is currently the largest locally based data centre provider in Australia and continues to rapidly expand its data centre footprint across Australia.

The Australian data centre market has risen rapidly over the past 5 to 10 years, driven by the rapid rise in cloud computing.

For FY19, NEXTDC’s overall revenue was up by 15% while EBITDA was up by 13%. These are impressive results for a mature data centre provider, and with more data centres coming online in the next 12 months, I believe that NEXTDC is well placed to deliver strong share price growth in 2020.

Motley Fool Contributor Phil Harpur owns shares in NEXTDC Ltd. 

Lloyd Prout: Webjet Limited (ASX: WEB)

The Webjet share price has taken a hit recently, as people factor in the impact of the Novel Coronavirus. The share price dropped as much as 16% this week.

Like most news, I believe that the short term impacts of reduced travel are overdone when looking at the long term prospects of the business. As such, the reduced share price provides a nice entry point.

The Webbeds business segment has shown exceptional growth recently and should continue to drive revenue and earnings higher. It is worth keeping an eye on increased competition from the likes of Google.

Motley Fool contributor Lloyd Prout owns shares in Webjet Limited and expresses his own opinion.

Daryl Mather: Regis Resources Limited (ASX: RRL)

The Regis Resources share price is currently at $4.50 which is up after falling over 5% since January 22. Partly this was due to the falling share market and partly due to a downgrade from Macquarie because of delays in approvals for the McPhillamys Gold Project.

The miner’s Q2 earnings statement for FY20 was filled with good news including increases in production, reduced operating costs, life extension for the Rosemount mine and many other positive results.

I think Regis is a bargain at this price heading into a bull market in gold and with a solid track record of growth across all major valuation indicators. I believe the Regis share price will improve significantly by the end of FY20.

Motley Fool Contributor Daryl Mather has no financial interest in Regis Resources Limited. 

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The Motley Fool Australia owns shares of and has recommended Bapcor and Corporate Travel Management Limited. The Motley Fool Australia owns shares of A2 Milk and Altium. The Motley Fool Australia has recommended BUBS AUST FPO 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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