Rudi’s View: CBA, Life360, ResMed, Zip & More

This story features EAGERS AUTOMOTIVE LIMITED, and other companies. For more info SHARE ANALYSIS: APE

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

By Rudi Filapek-Vandyck, Editor

The local share market, and the small cap segment in particular, might be looking rather moribund as the investment community, both local and internationally, is closely observing further developments in the Middle East, but this does not stop analysts at Morgan Stanley searching for possible lucrative investment ideas.

Earlier today the broker highlighted three small cap companies for whom it believes expectations are too benign. To add conviction to its calls, all three have received a notably higher price target, while positive ratings have been re-iterated.

Enough suspense. If you haven’t read today’s update of the Australian Broker Call Report yet, the three nominations are:

-Eagers Automotive ((APE))
-Temple & Webster ((TPW))
-Life360 ((360))

All three are rated ‘Conviction Overweight‘.

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Two ideas suggested by analysts at Wilsons:

-Sell Sonic Healthcare ((SHL)) and buy ResMed ((RMD)). The latter is a core holding in Wilsons’ Model Portfolio and remains its highest conviction exposure to the local healthcare sector.

-Sell Wesfarmers ((WES)) and buy Woolworths ((WOW)). Both share lots of similarities and should, in Wilsons’ view, trade on similar valuations. They do not.

A separate report, in which ongoing conviction in the AI megatrend and strong demand for data centres was repeated, Wilsons yet again nominated Goodman Group ((GMG)) as their number one favourite exposure to the investment thematic.

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Analysts at Ord Minnett have been busy too, trying to identify which ASX-listed deeply undervalued small cap company could be the next one to receive a take-over offer.

No less than 22 candidates have been selected.

Among Industrials ex-Financials and A-REITs:

-Camplify Holdings ((CHL))
-Experience Co ((EXP))
-NextEd Group ((NXD))
-Cosol ((COS))
-Trajan Group ((TRJ))
-Webjet Group ((WJL))
-Harmoney Corp ((HMY))
-Navigator Global Investments ((NGI))
-DUG Technology ((DUG))
-Symal Group ((SYL))

Inside the Resources sector:

-QPM Energy ((QPM))
-Brazilian Rare Earths ((BRE))
-AIC Mines ((A1M))
-Ioneer ((INR))
-Aeris Resources ((AIS))
-Iluka Resources ((ILU))
-Polymetals Resources ((POL))

Industrial Stocks that meet only two deep value criteria (all of the above meet three criteria):

-SPC Global ((SPG))
-PeopleIn ((PPE))
-Lindsay Australia ((LAU))
-Alliance Aviation Services ((AQZ))
-Monash IVF ((MVF))

For those who like to know the three filters used:

>50% discount to valuation;
<5x EV/EBITDA multiple for FY27;
Gearing ratio of < 25% based on net debt/(net debt + equity)

Those who meet only two filters have a larger gearing ratio. All stocks mentioned are rated Buy or Speculative Buy, with Iluka Resources the sole exception on Hold.

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Ord Minnett also updated its selection of High Conviction calls (all nominations are made by sector analysts on a 12 month horizon):

-Aussie Broadband ((ABB))
-Brazilian Rare Earths ((BRE))
-Bubs Australia ((BUB))
-Cuscal ((CCL))
-Qoria ((QOR))
-Regis Healthcare ((REG))
-SiteMinder ((SDR))
-Vault Minerals ((VAU))
-Waypoint REIT ((WPR))
-Zip Co ((ZIP))

Since the prior update, ARB Corp ((ARB)), Electro Optic Systems ((EOS)) and Pinnacle Investment Management ((PNI)) have been removed, while Bubs Australia has been added.

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UBS strategist Richard Schellbach recently zoomed in on the one conversation that keeps swirling around among Australian investors: what to make of CommBank ((CBA)) shares and their continued strength?

Some of the poignant points made:

“Commonwealth Bank’s weight within the Australian market has broken through 10%, and now sits as the largest stock (by far) on the ASX. Looking back through time, we can see that such a weight is not unprecedented, and has been exceeded on occasions.

“Instead, if CBA corrects, then all else equal we would look for better rotation opportunities, eg, within local large cap Health Care names, which typically offer relatively attractive valuations, the capacity to attract flows, and the prospects for earnings to grow.”

Readers looking for answers regarding CommBank’s share price and who’s still buying at these levels might want to check out the following: https://fnarena.com/index.php/2025/06/10/geopolitical-hedging-a-boon-for-commbank/

Best Buys & Conviction Calls

Crestone’s Best Sector Ideas:

-Ampol ((ALD))
-APA Group ((APA))
-Aristocrat Leisure ((ALL))
-Beach Energy ((BPT))
-Brambles ((BXB))
-Cochlear ((COH))
-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 for sustainable income:

-Amcor ((AMC))
-Ampol ((ALD))
-ANZ Bank ((ANZ))
-APA Group ((APA))
-Atlas Arteria ((ALX))
-Beach Energy ((BPT))
-BHP Group ((BHP))
-Car Group ((CAR))
-Coles Group ((COL))
-Dalrymple Bay Infrastructure ((DBI))
-Iress ((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 Group ((TLS))

If anyone wonders whether these lists are ever updated, the answer is ‘yes’. Does Crestone make regular changes? No.

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Four ASX-listed companies feature on Goldman Sachs’ Conviction Buy list for the APAC region:

-Iluka Resources ((ILU))
-NextDC ((NXT))
-ResMed ((RMD))
-Worley ((WOR))

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Jarden’s monthly update on Emerging Companies (i.e. smaller caps) showcases 16 stock picks in Australia; unchanged from the update in May. The following seven have been highlighted as representing the potential highest return, ranked in order of total shareholder return:

-GQG Partners ((GQG))
-Qualitas ((QAL))
-Dicker Data ((DDR))
-Universal Store Holdings ((UNI))
-EVT Ltd ((EVT))
-SiteMinder ((SDR))
-Temple & Webster ((TPW))

Apart from their order of appearance, nothing has changed to that selection. In contrast, the other ten have seen a number of changes:

-Arena REIT ((ARF))
-Genesis Energy ((GNE))
-Harvey Norman ((HVN))
-Integral Diagnostics ((IDX))
-Karoon Energy ((KAR))
-Michael Hill ((MHJ))
-Pepper Money ((PPM))
-Symal Group ((SYL))
-Vault Minerals ((VAU))

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

-Aristocrat Leisure ((ALL))
-ANZ Bank ((ANZ))
-Car Group ((CAR))
-Goodman Group ((GMG))
-GPT Group ((GPT))
-James Hardie Industries ((JHX))
-Orica ((ORI))
-Santos ((STO))
-Suncorp Group ((SUN))
-Xero ((XRO))

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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))
-Eagers Automotive ((APE))
-CAR Group ((CAR))
-Domino’s Pizza ((DMP))
-The Lottery Corp ((TLC))
-Wesfarmers ((WES))
-WiseTech Global ((WTC))
-Xero ((XRO))

-James Hardie ((JHX))

-Amcor ((AMC))
-Cleanaway Waste Management ((CWY))
-Orica ((ORI))

-Coles Group ((COL))

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

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

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

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

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Morningstar’s list of Best Buy Ideas: 

-APA Group ((APA))
-ASX Ltd ((ASX))
-Auckland International Airport ((AIA))
-Aurizon Holdings ((AZJ))
-Bapcor ((BAP))
-Brambles ((BXB))
-Dexus ((DXS))
-Domino’s Pizza Enterprises ((DMP))
-Endeavour Group ((EDV))
-Fineos Corp ((FCL))
-IDP Education ((IEL))
-IGO Ltd ((IGO))
-Ramsay Health Care ((RHC))
-SiteMinder ((SDR))
-TPG Telecom ((TPG))
-Woodside Energy ((WDS))

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Shaw and Partners’ Large Caps Model Portfolio:

-ANZ Bank ((ANZ))
-Aristocrat Leisure ((ALL))
-BlueScope Steel ((BSL))
-Brambles ((BXB))
-Dexus ((DXS))
-Macquarie Group ((MQG))
-Newmont Corp ((NEM))
-South32 ((S32))

Shaw and Partners’ emerging companies Top Picks:

-AML3D ((AL3))
-Australian Vanadium ((AVL))
-Bannerman Energy ((BMN))
-Chrysos ((C79))
-Humm Group ((HUM))
-Metro Mining ((MMI))
-Santana Minerals ((SMI))
-Southern Cross Electrical ((SXE))

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UBS‘s portfolio sector recommendations currently have only two segments on Overweight’; Insurance and TMT (Technology, Media & Telecommunication).

All of Banks, Energy and Small Caps are Underweight’. Everything else sits on Neutral’ (i.e. their weighting is recommended to mirror the local index) with Healthcare being upgraded in April and Industrials downgraded.

UBS’s lists of Most Preferred and Least Preferred ASX-listed exposures currently consist of the following:

Most Preferred

Resources
-BHP Group ((BHP))
-BlueScope Steel ((BSL))
-Northern Star ((NST))
-Orica ((ORI))
-Origin Energy ((ORG))

Financials & REITs
-Dexus ((DXS))
-Lifestyle Communities ((LIC))
-Medibank Private ((MPL))
-QBE Insurance Group ((QBE))
-Steadfast Group ((SDF))

Industrials
-Brambles ((BXB))
-Coles Group ((COL))
-Collins Foods ((CKF))
-Light & Wonder ((LNW))
-REA Group ((REA))
-SGH Ltd ((SGH))
-TechnologyOne ((TNE))
-Telstra ((TLS))
-Telix Pharmaceuticals ((TLX))
-Xero ((XRO))
-Life360 ((360))

Least Preferred

-Aurizon Holdings ((AZJ))
-ASX Ltd ((ASX))
-Bank of Queensland ((BOQ))
-CommBank ((CBA))
-IDP Education ((IEL))
-Lovisa Holdings ((LOV))
-Reece ((REH))

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Wilsons’ Focus Portfolio currently contains the following:

-ANZ Bank ((ANZ))
-Aristocrat Leisure ((ALL))
-BHP Group ((BHP))
-Brambles ((BXB))
-Car Group ((CAR))
-Collins Foods ((CKF))
-CSL ((CSL))
-Evolution Mining ((EVN))
-Goodman Group ((GMG))
-HealthCo Healthcare & Wellness REIT ((HCW))
-Hub24 ((HUB))
-James Hardie ((JHX))
-Mac Copper ((MAC))
-Macquarie Group ((MQG))
-ResMed ((RMD))
-Sandfire Resources ((SFR))
-Santos ((STO))
-South32 ((S32))
-TechnologyOne ((TNE))
-Telix Pharmaceuticals ((TLX))
-The Lottery Corp ((TLC))
-Westpac Bank ((WBC))
-WiseTech Global ((WTC))
-Woolworths Group ((WOW))
-Worley ((WOR))
-Xero ((XRO))

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Wilsons’ analysts selected the following five as Key Investment Opportunities:

-ResMed ((RMD))
-Goodman Group ((GMG))
-Xero ((XRO))
-Brambles ((BXB))
-WiseTech Global ((WTC))

Wilsons’ High conviction investment ideas across the industrials (ex resources) part of the market; typically businesses with attractive structural growth prospects:

-Pinnacle Investment Management ((PNI))
-Nanosonics ((NAN))
-Ridley Corp ((RIC))
-ARB Corp ((ARB))
-SiteMinder ((SDR))

Wilsons’ number one speculative idea:

-Clarity Pharmaceuticals ((CU6))

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Paying subscribers have 24/7 access to my curated lists, including All-Weather Performers at: https://fnarena.com/index.php/analysis-data/all-weather-stocks/

(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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