Rudi’s View: July’s Stock Pickers’ Favourites

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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Freshly updated stock picked sector favourites, Best Buys and Conviction Calls in Australia.

By Rudi Filapek-Vandyck, Editor

Lower commodity prices and downward pressure on share prices of related producers are simply par for the course, according to the latest sector update by analysts at Morgan Stanley.

They blame profit-taking after what has largely been an 18-month-long uptrend, much to the delight of those on the shareholder register.

As has been the case after every pullback throughout that period, lower prices may offer the next opportunity, though maybe not for all commodities and producers.

Morgan Stanley‘s preference is for commodities with unequivocally strong demand fundamentals, such as copper and uranium.

On Thursday morning, the latest sector update included downgrades for Rio Tinto ((RIO)) and Deterra Royalties ((DRR)) to Underweight.

Highlighted Overweight-rated companies include uranium exposures Paladin Energy ((PDN)) and Boss Energy ((BOE)), as well as BHP Group ((BHP)) and Iluka Resources ((ILU)).

Not highlighted, but also Overweight-rated, are Whitehaven Coal ((WHC)) and South32 ((S32)).

Peers at UBS expect iron ore prices to remain less volatile ahead, but to step down by -US$10-15/t over the next two years as Simandou ramps up and the market is projected to move into a larger surplus.

More Sector Favourites, Best Buys and Conviction Calls

Macquarie continues to prefer Rio Tinto ((RIO)) over BHP Group ((BHP)).

In the shorter term, met coal, zinc and lithium are believed to have the strongest fundamentals. For the coming three years, an Overweight positioning is recommended towards zinc and the precious metals, gold and silver.

Macquarie is not so keen on aluminium for the years ahead.

Macquarie’s preferred copper investments:

• Capstone Copper ((CSC))
• Aurelia Metals ((AMI))
• Aeris Resources ((AIS))
• Carnaby Resources ((CNB))
• FireFly Metals ((FFM))

Macquarie’s most favoured gold investments:

• Newmont Corp ((NEM))
• Capricorn Metals ((CMM))

Most lithium companies remain Outperform-rated at Macquarie:

• PLS Group ((PLS))
• IGO Ltd ((IGO))
• Global Lithium Resources ((GL1))
• Liontown ((LTR))
• Elevra Lithium ((ELV))
• PMET Resources ((PMT))
• Wildcat Resources ((WC8))

This week, Canaccord Genuity laid out the AI investment thesis for Australian investors:

“Australia’s digital infrastructure (DI) sector is just in the foothills of a sustained, long-term phase of investment, driven by AI workloads, hyperscaler expansion, sovereign compute requirements and the emergence of neocloud providers.

“Australia’s positioning is reinforced by its proximity to Asia-Pacific, political stability, renewable energy potential, expanding subsea cable connectivity and growing role as a sovereign data jurisdiction.”

Choices available through the local bourse:

First-order beneficiaries (operators and connectivity): NextDC ((NXT)), Macquarie Technology Group ((MAQ)), DUG Technology ((DUG)) and Megaport ((MP1)).

Second-order beneficiaries (critical suppliers): SKS Technologies ((SKS)), Tasmea ((TEA)), Symal Group ((SYL)), Maas Group ((MGH)), Intelligent Monitoring ((IMB)), NRW Holdings ((NWH)) and Mayfield Group ((MYG)).

Third-order beneficiaries (enabling infrastructure): LGI Limited ((LGI)), Ventia Services ((VNT)), Service Stream ((SSM)) and Downer EDI ((DOW)).

Fourth-order beneficiaries (thematic optionality): Alpha HPA ((A4N)) and Advanced Energy Minerals ((AEM)).

Closing remarks:

“We believe DI represents one of the most material identifiable capex programs in the Australian market, with AEMO’s Integrated System Plan extending the demand profile through to 2050.

“In our view, the most attractive exposures combine scarce capability, recurring customer relationships and leverage to access to power, the sector’s main constraint.”

Fund manager Ellerston Capital has equally communicated some of its favoured AI infrastructure beneficiaries:

• SKS Technologies ((SKS))
• Mayfield Group Holdings ((MYG))
• Southern Cross Electrical Engineering ((SXE))
• GenusPlus Group ((GNP))

Some of Ellerston’s high-conviction holdings:

• Wagners Holding Company ((WGN))
• Servcorp ((SRV))
• Shape Australia ((SHA))
• Plenti Group ((PLT))
• Baby Bunting Group ((BBN))

No Australian companies are included in RBC Capital’s Top 30 Global Ideas for 2026.

Maybe that shouldn’t surprise, given most international asset managers have, politely, placed the Australian share market in the not-so-exciting basket, usually with a Portfolio Underweight recommendation.

Stocks included are overwhelmingly US-listed:

• Air Products and Chemicals (APD US),
• Airbnb (ABNB US),
• AltaGas (ALA CN),
• Amazon.com (AMZN US),
• Applied Materials (AMAT US),
• AXA (CS FP),
• Biogen (BIIB US),
• Brookfield Corp. (BN US),
• ConocoPhillips (COP US),
• Constellation Software (CSU CN),
• Diageo (DGE LN),
• International Paper (IP US),
• IQVIA (IQV US),
• Loblaw (L CN),
• Merck (MRK US),
• Microsoft (MSFT US),
• Moody’s (MCO US),
• RB Global (RBA US),
• Royal Gold (RGLD US),
• Safran (SAF FP),
• Schneider Electric (SU FP),
• Snowflake (SNOW US),
• Williams (WMB US),
• U.S. Bancorp (USB US),
• Ventas (VTR US),
• Visa (V US),
• Xcel Energy (XEL US)

Plus:

• Apotex Health (APTX CN),
• Canadian National Railway (CNR CN), and
• Lonza (LONN SW)

Those three this week replaced Alcon (ALC SW), Boston Scientific (BSX US) and DuPont de Nemours (DD US).

Interesting observation from Jarden‘s latest update on pure iron ore producers on the ASX:

• Fortescue ((FMG)) is rated Underweight — consider it a ‘soft’ Sell, or reduce exposure.
• Mineral Resources ((MIN)) is rated Sell.
• Champion Iron ((CIA)) has been upgraded to Overweight — equivalent to Buy.

Respective price targets are $16, $27 and $5. Fortescue stands out with an implied dividend yield of 6.3% versus nil for MinRes and 2.6% for Champion Iron.

UBS‘s preferred ASX-listed gold exposures are:

• Newmont Corp ((NEM))
• Genesis Minerals ((GMD))
• Capricorn Metals ((CMM))
• Catalyst Metals ((CYL))

UBS’s preferred ASX-listed infrastructure exposures:

• Auckland International Airport ((AIA))
• Dalrymple Bay Infrastructure ((DBI))
• Channel Infrastructure NZ ((CHI))
• Origin Energy ((ORG))
• Metgasco ((MEL))
• Infratil ((IFT))
• NextDC ((NXT))
• AGL Energy ((AGL))
• Cleanaway Waste Management ((CWY))
• Spark NZ ((SPK))
• DigiCo Infrastructure REIT ((DGT))

Also included, but only listed across the Tasman, are Port of Tauranga, New Zealand’s largest port operator, and Vector Limited, the Auckland-based energy infrastructure and utilities company.

Citi‘s most preferred infrastructure investment options are currently Infratil, most preferred, and APA Group ((APA)), second most preferred.

Morgans‘ most favoured among REITs and property companies:

• DigiCo Infrastructure REIT ((DGT))
• Eureka Group Holdings ((EGH))
• GemLife Communities Group ((GLF))

Over at UBS, the following are Buy-rated:

• Goodman Group ((GMG))
• Vicinity Centres ((VCT))
• Charter Hall ((CHC))
• GPT Group ((GPT))
• Region Group ((RGN))
• HomeCo Daily Needs REIT ((HDN))
• Ingenia Communities ((INA))
• Centuria Industrial REIT ((CIP))
• Arena REIT ((ARF))
• GemLife Communities ((GLF))
• HMC Capital ((HMC))
• RAM Essential Property Fund ((REP))

Back to Morgans, where the three most favoured sector picks among financial services providers are, in order of preference:

• MA Financial Group ((MAF))
• Generation Development ((GDG))
• Navigator Global Investments ((NGI))

Over at Macquarie, Hub24 ((HUB)) has been upgraded to Outperform, with the platform operator joining Perpetual ((PPT)), Netwealth Group ((NWL)) and Qualitas ((QAL)) as most favoured among wealth and asset managers, and related companies.

Peers at UBS prefer AMP Ltd ((AMP)) over industry challengers Hub24 and Netwealth Group.

****

See also:

https://fnarena.com/index.php/2026/07/08/rudis-view-a-reits-banks-miners/

https://fnarena.com/index.php/2026/07/02/rudis-view-best-buys-conviction-calls-in-july/

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

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P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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