Rudi’s View: Best Buys In Copper, Small Caps, Tech, Healthcare, And More

This story features VENTIA SERVICES GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: VNT

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

By Rudi Filapek-Vandyck, Editor

A reminder from the research desk at Macquarie: ASX-listed contractors on average delivered solid, resilient performances in February, carried by “good” margins, cash flow and share buybacks.

In addition, most inside the sector are somewhat insulated from global risks and uncertainties with operations concentrated domestically.

Macquarie has Outperform ratings for five companies in the sector:

-Ventia Services ((VNT))
-Monadelphous ((MND))
-Worley ((WOR))
-SGH Ltd ((SGH))
-Service Stream ((SSM))

Macquarie’s forecasts are projecting “healthy” growth in EPS for the companies mentioned between FY25-27.

In an unrelated, earlier sector update analysts at Morgans identified ALS Ltd ((ALQ)) and Monadelphous as their two favourites.

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Bell Potter strategists Paul Basha and Rob Crookston, together with analyst Chris Savage have released an ongoing positive forecast for the price of gold, which, all else remaining equal, should continue to bode well for ASX-listed gold producers as the prospect for rising bullion prices isn’t yet priced into share prices.

Bell Potter’s Top Pick to play the theme is Evolution Mining ((EVN)). Also viewed positively is Northern Star ((NST)), with both preferred over Newmont Corp ((NEM)).

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Some interesting statistics from the strategy team at UBS: about one quarter (25%) of share market corrections turns into a bear market, with the data analysis only going back to 2010.

Looking back over the past 55 years, all bear markets can be traced back to economic recessions, with exception of 2022 and 1987.

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Ord Minnett Head of Asset Allocation, Malcolm Wood: “Despite recent market weakness, we remain cautious and are awaiting a more material correction before looking to add risk assets. We are monitoring policy responses to pressure from Trump, particularly in China”.

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Many an investor has become less enamoured with CSL ((CSL)) ever since covid lockdowns pushed the shares to an all-time record high back in 2020.

No such scepsis is embedded in Morgan Stanley‘s healthcare initiation report, released earlier on this Thursday morning. The broker’s macro conclusion is the risk vs reward balance for the sector on the ASX seems “balanced”, also reflected in a maiden In-Line sector view.

The two most preferred exposures are CSL and ResMed ((RMD)) –also the sole representatives that take off with an Overweight rating– while Cochlear ((COH)) has received the sole Underweight rating.

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The faithful in a long-term lasting resurgence for the copper sector have had to exert a lot of patience throughout the years past, but analysts at Wilsons have not lost their conviction in the theme.

Quote from this week’s sector update: “…believe we are only part way through this multi-decade thematic with both strong demand and supply side drivers supporting copper pricing to move to higher highs (and indeed higher lows also, along a volatile path).”

Wilsons has made the effort of lining up its favourites to have portfolio exposure (no doubt with more patience in mind), hence, in order of most preferred first:

-Capstone Copper ((CSC))
-MAC Copper ((MAC))
-Sandfire Resources ((SFR))

Wilsons has equally a positive view on:

-Hillgrove Resources ((HGO))
-New World Resources ((NWC))

Goes without saying, both BHP Group ((BHP)), the world’s largest copper miner by volume, and Rio Tinto ((RIO)) also offer exposure, but in both cases lots of other materials are involved too.

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Elsewhere, strategists at Wilsons believe markets pulling back from all-time highs has opened up investment opportunities in a number of high-quality, ASX-listed businesses. As per always, not everything that pulls back automatically becomes a great opportunity.

Wilsons singles out Australian banks as not providing an opportunity, despite share prices falling noticeably since the February results season. Instead, potentially providing a buying opportunity include:

-Car Group ((CAR))
-Goodman Group ((GMG))
-Pinnacle Investment Management ((PNI))
-ResMed ((RMD))
-SiteMinder ((SDR))
-Telix Pharmaceuticals ((TLX))
-WiseTech Global ((WTC))
-Xero ((XRO))

Wilsons’ Model Portfolio has added some defensive exposure as volatility has picked up significantly for share markets. The decision was made to include Brambles ((BXB)) next to The Lottery Corp ((TLC)), ResMed ((RMD)) and CSL ((CSL)) already in the Portfolio.

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In past editions, we have reported on several small cap research teams lining up their most favoured smaller cap Top Picks. This week, the team of stock pickers at Macquarie has joined in, placing the focus on “quality” and “fundamental value” in Australia’s small and midcap space.

Best Picks:

-Austal ((ASB))
-AUB Group ((AUB))
-a2 Milk Co ((A2M))
-Breville Group ((BRG))
-G8 Education ((GEM))
-GQG Partners ((GQG))
-Integral Diagnostics ((IDX))
-IPH Ltd ((IPH))
-JB Hi-Fi ((JBH))
-Lovisa Holdings ((LOV))
-Monadelphous ((MND))
-Megaport ((MP1))
-Monash IVF ((MVF))
-Nick Scali ((NCK))
-oOh!media ((OML))
-Propel Funeral Partners ((PFP))
-Pinnacle Investment Partners ((PNI))
-Qualitas ((QAL))
-Service Stream ((SSM))
-Reliance Worldwide ((RWC))
-Temple & Webster ((TPW))
-Universal Store Holdings ((UNI))
-Ventia Services ((VNT))

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Morgans‘ post-February update on local TMT stocks (Technology, Media and Telcos) has resulted in the following Key Picks:

-In Technology, WiseTech Global ((WTC)) is most preferred

-In Media, the new favourite is Car Group ((CAR)) following share price weakness and Airtasker ((ART)) among small caps

-Among Telcos, Superloop ((SLC)) is most preferred

-In Gaming, Morgans’ favourite remains Light & Wonder ((LNW))

Same broker also updated on Financial Services (insurers, wealth managers, payment platforms, stock brokers, etc) and here its Key Picks are now (in order of preference) QBE Insurance ((QBE)), Suncorp Group ((SUN)), Generation Development ((GDG)), and MA Financial ((MAF)).

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AI isn’t over and anxious investors are throwing out babies with the bathwater when it comes to Technology and Telcos listed on the ASX. Those are the two key themes from recent Macquarie research on both sectors.

The broker’s key pick post broad based selling is accountancy software platform operator Xero ((XRO)) for which the analysts retain high expectations.

Other suggestions made are those with a longer-term horizon should consider adding WiseTech Global ((WTC)), while shares in Megaport ((MP1)), in Macquarie’s opinion, have never looked this good (i.e. attractive).

Almost goes without saying; in a world anxious about tariffs and their potential impact, telcos as a defensive look even more appealing, the report posits.

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And finally, as promised last week, all 34 Best Ideas by stockbroker Morgans, freshly updated and re-confirmed post the February results season:

-Acrow ((ACF))
-ALS Ltd ((ALQ))
-Amotiv ((AOV))
-Avita Medical ((AVH))
-BHP Group ((BHP))
-Collins Foods ((CKF))
-Corporate Travel Management ((CTD))
-CSL ((CSL))
-Dalrymple Bay Infrastructure ((DBI))
-DigiCo Infrastructure ((DGT))
-Elders ((ELD))
-Guzman y Gomez ((GYG))
-HomeCo Daily Needs REIT ((HDN))
-James Hardie ((JHX))
-Karoon Energy ((KAR))
-Light & Wonder ((LNW))
-Lovisa Holdings ((LOV))
-Maas Group ((MGH))
-MA Financial ((MAF))
-Megaport ((MP1))
-GQG Partners ((GQG))
-Orica ((ORI))
-ResMed ((RMD))
-Rio Tinto ((RIO))
-Qualitas ((QAL))
-QBE Insurance ((QBE))
-South32 ((S32))
-Treasury Wine Estates ((TWE))
-Universal Store Holdings ((UNI))
-Webjet Group ((WJL))
-WH Soul Pattinson ((SOL))
-Whitehaven Coal ((WHC))
-WiseTech Global ((WTC))
-Woodside Energy ((WDS))

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See also:

https://fnarena.com/index.php/2025/03/19/rudis-view-navigating-the-trump-slump/

https://fnarena.com/index.php/2025/03/13/rudis-view-post-february-conviction-calls/

https://fnarena.com/index.php/2025/03/12/rudis-view-preparing-for-tougher-times-ahead/

https://fnarena.com/index.php/2025/03/06/rudis-view-to-sell-or-not-to-sell-2/

(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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