Top stocks for December

We asked our writers to share their top stock picks for the month of December, and this is what they had to say:

Rupert Hargreaves: Biffa

Biffa's (LSE: BIFF) size and experience with waste means that the company is a leader in its industry, and demand for its services should only grow as the UK's population expands. As well as organic growth, management is reinvesting free cash flow to acquire other businesses. So far this year the group has completed five acquisitions, with combined total revenues of £43m.

For the 26 weeks to the end of September, the company reported revenue growth of just under 8% year-on-year and underlying pre-tax profit growth of 56% to £26.7m.

Today the shares trade at a forward P/E of 13.7, which I believe looks too cheap for this defensive business achieving high single-digit earnings growth. There's also a 2.7% dividend yield on offer.

Rupert does not own shares in Biffa.

Paul Summers: boohoo.com

I think recent share price weakness at online giant boohoo.com(LSE: BOO) is a buying opportunity for investors, particularly as we approach the key festive period.

A 30% fall to the share price since late September feels rather overdone when you consider just how good the Manchester-based firm's interim figures really were. To recap, revenue and adjusted EBITDA soared by 106% and 68% respectively over the reporting period, even though gross margin fell to 53.3% (from 55.3%) as a result of planned investment.

While value investors will continue to baulk at the stock's sky-high valuation, I'd be far more inclined to back this increasingly geographically diversified and hugely cash-rich company over the vast majority of UK-focused retailers trading on supposedly bargain prices.

Paul Summers owns shares in boohoo.com

Kevin Godbold: Computacenter

In November, IT infrastructure services provider Computacenter(LSE: CCC) told us of a strong start to the fourth quarter and a growing pipeline of opportunities - the directors expect 2017 trading to be "comfortably in excess of its previous expectations".

Full-year results are due on 22 January and the firm intends to return circa £100m to shareholders via a tender offer for shares, to be announced the next day. This firm keeps on giving.

A combination of steady annual earnings increases and a price-to-earnings re-rating have driven the share price up 175% since 2013 in an almost perfect 2-o'clock trend. I wouldn't bet against this company in December or for the year ahead.

Kevin Godbold has no position in Computacenter.

Royston Wild: Ferguson

I think investors should get December off to a bang by snapping up Ferguson (LSE: FERG) ahead of upcoming trading details (first-quarter numbers are slated for Tuesday, December 5th).

The plumbing and heating product supplier can look to its core US marketplace to keep driving sales higher (sales here boomed 10.4% during the 12 months to July 2017, to £11.8bn). And in a promising signal for future revenues, Ferguson noted that on top of "good" residential and commercial markets, it had witnessed "improved industrial markets" in the second half of last year.

City analysts are expecting a 7% earnings improvement in fiscal 2018 and, with profits likely to remain strong and sustained, I reckon the firm is worthy of a slightly toppy forward P/E ratio of 17.2x.

Royston Wild does not own shares in Ferguson.

Peter Stephens: Imperial Brands

With defensive stocks being unpopular in 2017, there could be an opportunity to buy Imperial Brands(LSE: IMB) at a low price. It currently has a price-to-earnings (P/E) ratio of just 11.5, which is historically low. Furthermore, the company's dividend yield of 6% is twice the rate of inflation. With dividends being covered 1.5 times by earnings, further real dividend growth could be ahead.

Certainly, declining volumes are hurting the wider tobacco industry. However, with the popularity of e-cigarettes increasing and the company having a strong position within this segment, Imperial Brands should continue to deliver high earnings growth over the medium term.

Peter Stephens owns shares in Imperial Brands.

Bilaal Mohamed: Kier Group

My top stock for December is FTSE 250-listed building and civil engineering contractor Kier Group(LSE: KIE). The Bedfordshire-based business operates across a range of sectors including defence, education, housing, industrials, power, transport and utilities, and boasts a growing order book of approximately £9.5bn.

With its first complete financial year since the EU referendum, it seems Kier has so far been immune to Brexit, with full-year results revealing an 8% uplift in pre-tax profits to £126m, helped along by a 5% rise in revenues to £4.27bn.

Kier's share price has been drifting lower since March, providing value investors with a great opportunity to buy the shares on the cheap, at just nine times forecast earnings for FY2018. Income seekers should also take note - at current depressed levels, the shares offer a hearty yield of 7.1%.

Bilaal has no position in Kier Group.

Roland Head: Petrofac Limited

Shares of oil services firm Petrofac (LSE: PFC) have fallen by almost 50% since May, when the firm revealed it was under investigation by the Serious Fraud Office.

However, the news flow from Petrofac over the last six months suggests to me that the group is performing reasonably well in difficult market conditions. Adjusted net profit fell by just 4% to $158m during the first half of the year, while new orders totalled $2.7bn during the period.

Although the group could face hefty fines, I believe Petrofac's forecast P/E of 6 and prospective yield of 7% are probably too cheap and represent a potential buying opportunity.

Roland Head owns shares of Petrofac.

Harvey Jones: Sirius Minerals.

Sirius Minerals(LSE: SXX)? For a while, investors simply could not get enough of the Yorkshire-based polyhalite potash mining company. Its share price spiked at 35p in June, but has now drifted to around 25p.

So what has gone wrong? A cost overrun, project delay, debt shock, potash price crash? None of the above.

News has been positive, with Sirius reporting in September that the mine was "on time and on budget", and announcing yet another delivery agreement in October, with Wilmar, an Asian agribusiness giant. The problem is there has not been enough of it to excite short-sighted traders. They have banked profits and moved on, but the long-term story remains positive.

Sirius is risky, as it won't produce revenues until 2022 and further fundraising could dilute existing shareholdings. However, the time to buy it is arguably when the share price is languishing, like now, rather than enjoying one of its periodic spikes.

Harvey Jones owns shares in Sirius Minerals.

G A Chester: Vectura

Respiratory drugs and devices specialist Vectura (LSE: VEC) is thoroughly out of favour with investors. A big cloud has been the failure, so far, of its partner Hikma Pharmacueticals to get US regulatory approval for a generic version of GlaxoSmithKline's Advair Diskus asthma drug. The outcome should be decided, for better or worse, early next year.

However, my 'buy' case for Vectura doesn't rest on the outcome -- nice, though, a positive one would be! -- but on the company's depressed share price and long-term growth prospects as a major player in an attractive area of the healthcare market.

G A Chester has no position in any of the shares mentioned.

The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK owns shares of Petrofac. The Motley Fool UK has recommended boohoo.com, Hikma Pharmaceuticals, and Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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