Rudi’s View: Best Buys & Convictions For 2025

This story features FLEETPARTNERS GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: FPR

By Rudi Filapek-Vandyck, Editor

Not everyone is back from holidays yet (definitely not) but the February results season is approaching and we have spotted the early research previews of what will be largely a second half of February affair (with lack of accountants to blame, apparently).

Over the past few days, Morgan Stanley has started to communicate its High Conviction calls ahead of next month’s results releases. So far, nominations are:

-Fleetpartners ((FPR))
-Data#3 ((DTL))
-Life360 ((360))
-Corporate Travel Management ((CTD))

Elsewhere, Morgan Stanley analysts have updated their international selection of Best Businesses, which aims to combine elements of corporate Quality with ‘valuation’, forecasts and Quant analysis, for a two-year investment horizon (which can be extended, of course).

This year’s selection has slimmed down to 31 stocks versus 38 at the prior update which the broker explains through on average higher valuations generally.

Amidst often made calls for an ‘Everything Bubble’, investors might be surprised the selection still includes popular US names such as Apple and Microsoft, together with Coca-Cola, Costco, Eli Lilly, Ferrari, JP Morgan Chase, TSMC, and Visa.

Two ASX-listed companies made the list: Macquarie Group ((MQG)) and Rio Tinto ((RIO)).

Some of the lesser familiar names include Chugai Pharmaceutical, Inditex, Shin-Etsu Chemical, Stryker Corp, Technip Energies, Tenaga Nasional, and Wolters Kluwer.

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Gold sector analysts at RBC Capital have observed the early, preliminary signals coming from ASX-listed producers are once again “mixed” as has been the case for a number of precedents now.

But the broker seeks solace in its forecast that the price of gold should remain well-supported in 2025, and this should –all else remaining equal– also support share prices of ASX-listed exposures.

RBC Capital has Outperform ratings for Regis Resources ((RRL)), Westgold Resources ((WGX)) and Bellevue Gold ((BGL)).

Peers at Goldman Sachs recently initiated coverage on Newmont Corp with a Buy rating, while also upgrading Northern Star ((NST)) to Buy. This broker favours Gold Road Resources ((GOR)) in the midcap segment.

Regis Resources is Sell-rated at Goldman Sachs.

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Property sector analysts at Morgan Stanley believe the bottom is in for the Office sector in Australia. They also believe it’ll be a while yet before the benefits will show up for landlords including the likes of Dexus ((DXS)) and Centuria Office REIT ((COF)).

Better to play the theme through fund managers including Charter Hall ((CHC)) and Centuria Capital Group ((CNI)) fow which the benefits show up much quicker.

On a more general tone, REITs sector analysts at Jarden see “good value” among ASX-listed REITs, though the February reporting season might still be too early to provide a positive catalyst. Jarden’s view thus spans over the next 6-12 months.

Among fund managers, Goodman Group ((GMG)) and Qualitas ((QAL)) remain Jarden’s favourites. With sector momentum to improve for residental properties, both Stockland ((SGP)) and Mirvac Group ((MGR)) are expected to benefit.

Among smaller cap REITs, Jarden’s favourites are Region Group ((RGN)), Waypoint REIT ((WPR)), National Storage ((NSR)), HomeCo Daily Needs REIT ((HDN)), Arena REIT ((ARF)), and Centuria Industrial REIT ((CIP)).

Both HMC Capital ((HMC)) and Lifestyle Communities ((LIC)) are rated Sell at Jarden.

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Ord Minnett has updated its selection of Conviction Calls (“our best small cap stock ideas as selected by our analysts“).

-ARB Corp ((ARB))
-Aussie Broadband ((ABB))
-Brazilian Rare Earths ((BRE))
-Cosol ((COS))
-Cuscal ((CCL))
-EQT Holdings ((EQT))
-Electro Optic Systems Holdings ((EOS))
-GQG Partners ((GQG))
-Qoria ((QOR))
-Regis Healthcare ((REG))
-SiteMinder ((SDR))
-Stanmore Resources ((SMR))
-Vault Minerals ((VAU))
-Waypoint REIT ((WPR))
-Zip Co ((ZIP))

Note: in comparison with December’s list, Cuscal is the only one freshly added.

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January’s update on the APAC Conviction List at Goldman Sachs has seen the inclusion of Worley ((WOR)) and Iluka Resources ((ILU)), for which the broker harbours bullish forecasts for the next four years.

Both are the only ASX-listed stocks included in a selection of 26 stocks including CATL, Honda Motor, TSMC, and Zijin Mining.

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Earlier in the month, Morgans’ Core Model Portfolio reported it had reduced exposure to Brickworks ((BKW)), topped up its holding in Eagers Automotive ((APE)) and added Light & Wonder ((LNW)) as a fresh exposure.

The broker’s Growth Model Portfolio has trimmed exposure to NextDC ((NXT)) and Aristocrat Leisure ((ALL)), sold out of New Hope Coal ((NHC)), topped up on Beacon Lighting ((BLX)) and also bought a fresh holding in Light & Wonder.

Whoever is responsible for Morgans data digging needs a slap on the wrist as the ASX200 Accumulation Index did NOT gain 23.4% in 2024 (this anomaly probably makes all related calculations incorrect).

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The team of analysts and strategists at Shaw and Partners is convinced the time is right to invest in Australian small cap companies.

Shaw’s Top 10 list of Small Cap Ideas for 2025:

-Amaero International ((3DA))
-Australian Vanadium ((AVL))
-Beforepay ((B4P))
-Bannerman Energy ((BMN))
-Chrysos ((C79))
-Humm Group ((HUM))
-Metro Mining ((MMI))
-Santana Minerals ((SMI))
-Silex Systems ((SLX))
-Southern Cross Electrical Engineering ((SXE))

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In December, analysts at Bell Potter published their most favoured stock picks for the year ahead, with multiple ideas put forward per sector.

-Listed Investment Companies (LICs): Australian Foundation Investment Company (AFI), Qualitas Real Estate Income Fund ((QRI)), and MFF Capital Investments ((MFF))

-Technology & Gaming: Life360 ((360)), Light & Wonder ((LNW)), and Gentrack Group ((GTK))

-Diversified Financials: Perpetual ((PPT)) and Regal Partners ((RPL))

-Real Estate: Aspen Group ((APZ)), Cedar Woods ((CWP)), and Dexus Convenience Retail REIT ((DXC))

-Retailers: JB Hi-Fi ((JBH)), Premier Investments ((PMV)), and Accent Group ((AX1))

-Industrials: GenusPlus Group ((GNP)), SRG Global ((SRG)), and Duratec ((DUR)) as well as Austal Ltd ((ASB)), Brickworks ((BKW)), and IPD Group ((IPG))

-Healthcare: PolyNovo ((PNV)), Clarity Pharmaceuticals ((CU6)), and CSL ((CSL)) as well as EBR Systems ((EBR)), Biome Australia ((BIO)), and Genetic Signatures ((GSS))

-Gold companies: Genesis Minerals ((GMD)), Gold Road Resources ((GOR)), and Santana Minerals ((SMI))

-Base Metals: AIC Mines ((A1M)) and Nickel Industries ((NIC))

-Strategic Minerals: Alpha HPA ((A4N)) and IperionX ((IPX))

-Bulks & Energy companies: Boss Energy ((BOE)), Champion Iron ((CIA)), and Fenix Resources ((FEX))

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Jarden’s December update reduced the number of Best Ideas from the circa 110 smaller cap companies covered (ex-AS100) to 18 from 20 previously.

The broker’s Emerging Companies’ Key Picks (in order of total shareholder return) are:

-Qualitas ((QAL))
-Universal Store Holdings ((UNI))
-SiteMinder ((SDR))
-Temple & Webster ((TPW))
-Nick Scali ((NCK))
-EVT Ltd ((EVT))

The above are all picked by the broker’s Emerging Companies research team. The following stock picks have been selected by respective sector analysts:

-Champion Iron ((CIA))
-Domain Holdings Australia ((DHG))
-Genesis Energy ((GNE))
-Integral Diagnostics ((IDX))
-Ingenia Communities Group ((INA))
-Inghams Group ((ING))
-Karoon Gas ((KAR))
-Michael Hill International ((MHJ))
-Monadelphous ((MND))
-Pointsbet Holdings ((PBH))
-Pepper Money ((PPM))
-Telix Pharmaceuticals ((TLX))

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Macquarie‘s selection of best fundamental picks among quality mid-cap companies on the ASX:

-AUB Group ((AUB))
-Breville Group ((BRG))
-Ebos Group ((EBO))
-Flight Centre ((FLT))
-Fisher & Paykel Healthcare ((FPH))
-Integral Diagnostics ((IDX))
-Lovisa Holdings ((LOV))
-Nick Scali ((NCK))
-Megaport ((MP1))
-Monash IVF ((MVF))
-Propel Funeral Partners ((PFP))
-Pinnacle Investment Management ((PNI))
-Qualitas ((QAL))
-Reliance Worldwide ((RWC))
-Ventia Services ((VNT))

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Crestone’s Best Sector Ideas are an attempt to identify the best in breed business models for major industry group sectors for long-term oriented investors. Anticipated performance over the next three years is part of the key considerations.

December’s updated selection consists of 17 companies:

-Aristocrat Leisure ((ALL))
-Ampol ((ALD))
-APA Group ((APA))
-Beach Energy ((BPT))
-Brambles ((BXB))
-CSL ((CSL))
-Goodman Group ((GMG))
-IGO Ltd ((IGO))
-James Hardie Industries ((JHX))
-Lottery Corp ((TLC))
-Macquarie Group ((MQG))
-Metcash ((MTS))
-Monadelphous Group ((MND))
-REA Group ((REA))
-ResMed ((RMD))
-Suncorp Group ((SUN))
-Xero ((XRO))

Crestone’s selection of sustainable dividend growers consists of 22 names, with equally no changes made since the prior revision. Historically, the stock pickers remind investors, companies that grow dividends consistently can offer superior long-term return for those who own them.

-Amcor ((AMC))
-Ampol ((ALD))
-APA Group ((APA))
-Atlas Arteria ((ALX))
-Beach Energy ((BPT))
-BHP Group ((BHP))
-Car Group ((CAR))
-Coles Group ((COL))
-Dalrymple Bay Infrastructure ((DBI))
-Iress Ltd ((IRE))
-Lottery Corp ((TLC))
-Macquarie Group ((MQG))
-Metcash ((MTS))
-Mirvac Group ((MGR))
-Pro Medicus ((PME))
-QBE Insurance ((QBE))
-RAM Essential Services ((REP))
-ResMed ((RMD))
-Suncorp Group ((SUN))
-Tabcorp Holdings ((TAH))
-Telstra ((TLS))
-Westpac Banking ((WBC))

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Morgan Stanley’s Macro+ Focus List in Australia is currently made up of:

-AGL Energy ((AGL))
-Aristocrat Leisure ((ALL))
-Car Group ((CAR))
-GPT Group ((GPT))
-James Hardie ((JHX))
-Macquarie Group ((MQG))
-Paladin Energy ((PDN))
-Santos ((STO))
-Suncorp Group ((SUN))
-WiseTech Global ((WTC))

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Morgan Stanley’s Australia Macro+ Model Portfolio is currently made up of the following:

-ANZ Bank ((ANZ))
-CommBank ((CBA))
-National Australia Bank ((NAB))
-Westpac ((WBC))

-Macquarie Group ((MQG))

-Suncorp Group ((SUN))

-Goodman Group ((GMG))
-GPT Group ((GPT))
-Scentre Group ((SCG))
-Stockland ((STG))

-Aristocrat Leisure ((ALL))
-CAR Group ((CAR))
-Domino’s Pizza ((DMP))
-The Lottery Corp ((TLC))
-Wesfarmers ((WES))
-WiseTech Global ((WTC))

-James Hardie ((JHX))

-Orica ((ORI))

-Coles Group ((COL))

-CSL ((CSL))
-ResMed ((RMD))

-AGL Energy ((AGL))
-Origin Energy ((ORG))
-Telstra ((TLS))
-Transurban ((TCL))

-BHP Group ((BHP))
-Newmont Corp ((NEM))
-Rio Tinto ((RIO))
-South32 ((S32))

-Paladin Energy ((PDN))
-Santos ((STO))
-Woodside Energy ((WDS))

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Morningstar‘s selection of Best Buys on the ASX:

-APA Group ((APA))
-ASX ((ASX))
-Aurizon Holdings ((AZJ))
-Bapcor ((BAP))
-Brambles ((BXB))
-Domino’s Pizza ((DMP))
-Dexus ((DXS))
-Endeavour Group ((EDV))
-Fineos Corp ((FCL))
-IDP Education ((IEL))
-IGO Ltd ((IGO))
-Ramsay Health Care ((RHC))
-SiteMinder ((SDR))
-Santos ((STO))
-TPG Telecom ((TPG))

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Macquarie Wealth‘s recommended Growth Portfolio:

-Goodman Group ((GMG))
-Seek ((SEK))
-Aristocrat leisure ((ALL))
-Northern Star ((NST))
-CSL ((CSL))
-Computershare ((CPU))
-NextDC ((NXT))
-Flight Centre ((FLT))
-Cleanaway Waste Management ((CWY))
-Steadfast Group ((SDF))
-James Hardie ((JHX))
-ResMed ((RMD))
-Pexa Group ((PXA))
-Treasury Wine Estates ((TWE))
-Viva Energy ((VEA))
-Xero ((XRO))
-IGO Ltd ((IGO))

In between December and January Mineral Resources ((MIN)) has been replaced with IGO Ltd.

Macquarie Wealth’s recommended Income Portfolio:

-Suncorp Group ((SUN))
-Telstra ((TLS))
-National Australia Bank ((NAB))
-Westpac Bank ((WBC))
-ANZ Bank ((ANZ))
-BHP Group ((BHP))
-CommBank ((CBA))
-Premier Investments ((PMV))
-Coles Group ((COL))
-Viva Energy ((VEA))
-Atlas Arteria ((ALX))
-Aurizon Holdings ((AZJ))
-APA Group ((APA))
-GPT Group ((GPT))
-Deterra Royalties ((DRR))
-Metcash ((MTS))
-Amotiv ((AOV))
-Charter Hall Retail REIT ((CQR))
-Amcor ((AMC))

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Macquarie’s ASX Quality Compounders:

The highest quality compounders’ as identified by Macquarie quant research inside the ASX300:

-James Hardie ((JHX))
-Cochlear ((COH))
-REA Group ((REA))
-TechnologyOne ((TNE))
-ResMed ((RMD))
-Data#3 ((DTL))
-Pro Medicus ((PME))
-Jumbo Interactive ((JIN))
-PWR Holdings ((PWH))
-Netwealth Group ((NWL))
-Aristocrat Leisure ((ALL))
-Spark New Zealand ((SPK))
-Codan ((CDA))
-Clinuvel Pharmacauticals ((CUV))
-Redox ((RDX))

Given Macquarie’s research strong leaning on the past five years, with high barriers to match, the following 11 companies fell just outside the above list:

-Fisher & Paykel Healthcare ((FPH))
-Medibank Private ((MPL))
-Coles Group ((COL))
-The Lottery Corp ((TLC))
-Lovisa Holdings ((LOV))
-CSL ((CSL))
-IDP Education ((IEL))
-Pinnacle Investment Management ((PNI))
-ARB Corp ((ARB))
-Breville Group ((BRG))
-Johns Lyng ((JLG))

My own research and All-Weather stock selections are 24/7 available for paying subscribers: https://fnarena.com/index.php/analysis-data/all-weather-stocks/

See also 2024’s final update: https://fnarena.com/index.php/2024/12/23/rudis-view-final-best-buys-conviction-ideas/

(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.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

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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