Rudi’s View: Aussie Broadband, oOh!media, Paladin Energy, Seek, Xero & More

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Update on changes to and revisions of analysts’ Best Ideas and Conviction Calls, as well as Model Portfolio compositions.

By Rudi Filapek-Vandyck

We was wrong.

It’s the kind of phrase protagonists say in American movies and that makes viewers like myself squirm, but then again, apparently ‘dove’ instead of ‘dived’ is also permitted in the land of Kaiser Donald J.

Macquarie’s latest strategy update on Australian equities, released earlier today on Thursday morning wouldn’t use American colloquialisms, of course, but the strategists might have just as well, because that is the key over-riding message expressed to their clientele.

Up until today, Macquarie strategists have been warning about too much exuberance in equities, advocating a cautious and defensive portfolio set-up while expecting this year’s runaway stock market train to come unstuck.

But it hasn’t happened.

Today’s mea culpa suggests the focus has been too much on PE expansion and the RBA holding out on rate cuts. Outside of Australia, central banks have been cutting rates at a pace nearly never witnessed outside of economic recession, and it is translating into growth resilience and momentum picking up.

Add a just as rare technology boom and this year’s cocktail suggests the world is trending towards a better place, not one-way into malaise and struggles.

Better times ahead means the Model Portfolio was too defensively positioned. Macquarie strategists have responded by adding more exposure to Technology and AI, and less to bond proxies (bond yields might not weaken as much as earlier thought).

The following stocks have been added to the Model Portfolio:

-NextDC ((NXT))
-Seek ((SEK))
-Paladin Energy ((PDN))

These additions compliment the likes of Xero ((XRO)), Megaport ((MP1)) and Goodman Group ((GMG)).

For more cyclical exposure, the Portfolio now also owns Lovisa Holdings ((LOV)) and Web Travel Group ((WEB)). Also added has been Challenger ((CGF)) on anticipation of a more limited fall in bond yields.

Exposures that have been reduced: Transurban ((TCL)), GPT Group ((G:PT)) and James Hardie ((JHX)).

On the strategists’ own assessment, if their revised outlook proves correct, Australian companies should see earnings upgrades in FY26.

That will be the logical litmus test, both for Macquarie’s about-face and for current elevated PE ratios.

Global equity strategists at UBS remain on the lookout for downgrades to current growth forecasts, and for decelerating economic indicators while the Federal Reserve will only be ready to deliver its next rate cut in September.

UBS thus suggests equity markets might find the going a little more challenging, with the extra comment that any pullback larger than -5% would come as a surprise.

Weakness should still be treated as an opportunity to buy more shares, in UBS’s view (being relatively relaxed about potential impacts from tariffs).

Investors have rightly learned to buy the dip, say the strategists, with US corporate profits still expected to grow (albeit more slowly), the AI theme still booming and USD weakness supporting nearly 25% of S&P500 revenues that are generated internationally.

****

Staying with Macquarie, the small caps desk has released its favourites ahead of the August results season. The list of Best Picks consists of:

-Aussie Broadband ((ABB))
-Amotiv ((AOV))
-AUB Group ((AUB))
-Alpha HPA ((A4N))
-Bega Cheese ((BGA))
-Capstone Copper ((CSC))
-Codan ((CDA))
-Genesis Minerals ((GMD))
-Iluka Resources ((ILU))
-Integral Diagnostics ((IDX))
-Harvey Norman ((HVN))
-Jumbo Interactive ((JIN))
-Lovisa Holdings ((LOV))
-Maas Group ((MGH))
-Megaport (( MP1))
-Monadelphous ((MND))
-Neuren ((NEU))
-Nick Scali ((NCK))
-oOh!media ((OML))
-Pinnacle Investment Management ((PNI))
-Qualitas ((QAL))
-Reliance Worldwide ((RWC))
-SiteMinder ((SDR))
-Summit Minerals ((SUM))
-Universal Store Holdings ((UNI))
-Ventia Services ((VNT))
-Web Travel Group ((WEB))

Let me share one personal pleasure: every time I write up these lists, I challenge myself to add full company names, correct spelling and all, to each ASX code to check how up to date my knowledge remains.

Today I am slightly disappointed. I failed on five codes, including for Maas Group! Must have had a temporary blackout.

****

One extra update from Macquarie on Thursday morning: the healthcare desk expressed their favouritism for CSL ((CSL)), ResMed ((RMD)), Integral Diagnostics ((IDX)) and Neuren ((NEU)).

Least preferred are Cochlear ((COH)) and Ansell ((ANN)).

****

Bell Potter‘s general update on ASX-listed agricultural stocks shows the following Buy-rated preferences:

-Australian Agricultural Company ((AAC))
-Bega Cheese ((BGA))
-Elders ((ELD))
-Noumi Ltd ((NOU))
-Nufarm ((NUF))
-Rural Funds ((RFF))
-Select Harvests ((SHV))

****

Stockbroker Morgans, previewing August results, has High Conviction for positive performances from the following resources companies:

-BHP Group ((BHP))
-Woodside Energy ((WDS))
-Amplitude Energy ((AEL))
-Karoon Gas ((KAR))

Sticking with Morgans, the broker’s favourites in the local Technology sector are WiseTech Global ((WTC)) and Megaport ((MP1)), with Car Group ((CAR)) and Seek ((SEK)) the favourites in Media, Superloop ((SLC)) in Telecom and Light & Wonder ((LNW)) among gaming stocks.

Morgans has also Buy ratings for Xero ((XRO)) and NextDC ((NXT)).

For exposure to non-bank financials, the broker’s favourites are Generation Development ((GDG)), MA Financial ((MAF)), and Tyro Payments ((TYR)).

****

Analysts at Morgan Stanley like to identify High-Conviction opportunities both ahead and after reporting seasons.

This time three ideas have been identified throughout the Asian coverage. One of these is ASX-listed: Xero ((XRO)).

****

Jarden’s monthly update on Australia’s small caps (“emerging companies”) highlights 18 Best Ideas, including the following Key Picks considered offering the highest potential return, in order of projected total investment reward:

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

The other ten stocks selected:

-Aussie Broadband ((ABB))
-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))

Since the prior update in early June, no stocks were removed. Both Aussie Broadband and Pinnacle Investment Management are new inclusions.

****

Analysts at Moelis remain positive on ASX-listed gold companies with Buy ratings reserved for:

-Vault Minerals ((VAU))
-Alkane Resources ((ALK))
-Ora Banda Mining ((OBM))
-Pantoro Gold ((PNR))

Over at Stockbroker Morgans the preference lays with Northern Star ((NST)) and Newmont Corp ((NEM)) among larger caps, with Regis Resources ((RRL)) preferred among mid-cap options.

Analysts at Ord Minnett favour Newmont Corp and Vault Minerals.

Other ideas in a largely ‘cheap’ looking resources sector, according to Ord Minnett, include Capstone Copper, Rio Tinto ((RIO)), Paladin Energy ((PDN)) and Lotus Resources ((LOT)), and Whitehaven Coal ((WHC)) as the quality play among coal producers.

****

Goldman Sachs‘ selection of local Conviction Buys is now reduced to three:

-Goodman Group ((GMG))
-ResMed ((RMD))
-Worley ((WOR))

Unibail-Rodamco-Westfield ((URW)) is also included for its Paris listing with the local listing about to disappear.

Best Buys & Conviction Calls

Bell Potter’s sector preferences for the financial year ahead.

Listed Investment Companies ((LICs)
-Australian Foundation Investment Company ((AFI))
-Metrics Master Income Trust ((MXT))
-MFF Capital Investments ((MFF))

Agricultural & Fast Moving Consumer Goods (FMCG)
-Bega Cheese ((BGA))
-Rural Funds Group ((RFF))
-Elders ((ELD))

Technology
-WiseTech Global ((WTC))
-Gentrack ((GTK))
-Seek ((SEK))

Diversified Financials
-Cuscal ((CCL))
-Praemium ((PPS))
-Regal Partners ((RPL))

Real Estate
-Aspen Group ((APZ))
-Cedar Woods ((CWP))
-Region Group ((RGN))

Retail
-JB Hi-Fi ((JBH))
-Universal Store Holdings ((UNI))
-Propel Funeral Partners ((PFP))

Industrials
-LGI Ltd ((LGI))
-Environmental Group ((EGL))

Healthcare
-Telix Pharmaceuticals ((TLX))
-Neuren Pharmaceuticals ((NEU))
-Monash IVF ((MVF))

Gold
-Minerals 260 ((MI6))
-Santana Minerals ((SMI))
-Evolution Mining ((EVN))

Base Metals
-Aeris Resources ((AIS))
-Nickel Industries ((NIC))
-AIC Mines ((A1M))

Strategic Minerals & Processing Technologies
-Alpha HPA ((A4N))
-IperionX ((IPX))

Energy
-Boss Energy ((BOE))

Mining & Industrial Services
-Develop Global ((DVP))
-ALS Ltd ((ALQ))
-Duratec ((DUR))

****

favourites inside the local small cap retail space (in order of preference) as selected by Retail sector analysts at Citi:

-Universal Store Holdings ((UNI))
-Baby Bunting ((BBY))
-Nick Scali ((NCK))
-Temple & Webster ((TPW))
-Beacon Lighting ((BLX))
-Harvey Norman ((HVN))
-Accent Group ((AX1))
-Super Retail ((SUL))
-Premier Investments ((PMV))
-Bapcor ((BAP))
-Lovisa Holdings ((LOV))

****

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))

****

Morgans‘ selection of Best Ideas consists of the following 29 ASX-listed companies:

Acrow ((ACF))
ALS Ltd ((ALQ))
Amotiv ((AOV))
BHP Group ((BHP))
Collins Foods ((CKF))
Corporate Travel Management ((CTD))
CSL ((CSL))
Dalrymple Bay Infrastructure ((DBI))
Dexus Convenience Retail REIT ((DXC))
DigiCo Infrastructure REIT ((DGT))
EBR Systems ((EBR))
Elders ((ELD))
Goodman Group ((GMG))
Guzman y Gomez ((GYG))
James Hardie Industries ((JHX))
Light & Wonder ((LNW))
Lovisa Holdings ((LOV))
MA Financial Group ((MAF))
Megaport ((MP1))
Orica ((ORI))
Pinnacle Investment Management ((PNI))
ResMed ((RMD))
South32 ((S32))
Treasury Wine Estates ((TWE))
Qualitas ((QAL))
Universal Store Holdings ((UNI))
Whitehaven Coal ((WHC))
WiseTech Global ((WTC))
Woodside Energy ((WDS))

****

Morgan Stanley’s six Conviction stock picks that each represent a compelling individual investment case underpinned by idiosyncratic drivers and the ability to deliver earnings upside, believed to be underappreciated by the market.

-WiseTech Global ((WTC))
-Charter Hall Group ((CHC))
-Suncorp Group ((SUN))
-Life360 Inc ((360))
-Generation Development Group ((GDG))
-Data#3 ((DTL))

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))

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))

****

Morningstar’s Equity Best Ideas (Conviction Buy Calls by any other name, mostly chosen because of under-valuation).

-Auckland International Airport ((AIA))
-ASX Ltd ((ASX))
-Aurizon Holdings ((AZJ))
-Bapcor ((BAP))
-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))
-Spark New Zealand ((SPK))
-Woodside Energy ((WDS))

****

Ord Minnett’s High Conviction calls (all nominations 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))

****

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))

****

UBS’s Most Preferred Stocks in Australia

In Resources segment:
-BHP Group ((BHP))
-BlueScope Steel ((BSL))
-Newmont Corp ((NEM))
-Orica ((ORI))
-Origin Energy ((ORG))

Among Financials & A-REITs:
-Dexus ((DXS))
-Lifestyle Communities ((LIC))
-Mirvac Group ((MGR))
-Medibank Private ((MPL))
-QBE Insurance ((QBE))
-Steadfast Group ((SDF))

Among Industrials:
-Brambles ((BXB))
-Collins Foods ((CKF))
-Cochlear ((COH))
-Coles Group ((COL))
-NextDC ((NXT))
-REA Group ((REA))
-ResMed ((RMD))
-SGH Ltd ((SGH))
-TechnologyOne ((TNE))
-Telstra Corp ((TLS))
-Telix Pharmaceuticals ((TLX))
-WiseTech Global ((WTC))

UBS’s Least Preferred Stocks in Australia

-Aurizon Holdings ((AZJ))
-ASX Ltd ((ASX))
-Bank of Queensland ((BOQ))
-CommBank ((CBA))
-Charter Hall Group ((CHC))
-Computershare ((CPU))
-Evolution Mining ((EVN))
-Temple & Webster ((TPW))

****

Wilsons‘ Key Investment Opportunities:

-Goodman Group ((GMG))
-Pinnacle Investment Management ((PNI))
-ResMed ((RMD))
-WiseTech Global ((WTC))
-Woolworths ((WOW))

High conviction investment ideas:

-ARB Corp ((ARB))
-Maas Group ((MGH))
-Nanosonics ((NAN))
-Ridley Corp ((RIC))
-SiteMinder ((SDR))

Speculative idea:

-Clarity Pharmaceuticals ((CU6))

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))
-Macquarie Group ((MQG))
-Northern Star Resources ((NST))
-Pinnacle Investment Managers ((PNI))
-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))

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/

FNArena Talks

Interview for Philip Muscatello’s Shares For Beginners about the ins and outs of All-Weathers and the portfolio over the decade past:

https://www.sharesforbeginners.com/blog/fnarena-all-weather

YouTube: https://youtu.be/m33cYbtJsDs?si=MQTAW8YgI2oNjKc4

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Apple Podcasts: https://podcasts.apple.com/au/podcast/all-weather-portfolio-rudi-filapek-vandyck-fnarena/id1451778025?i=1000715348354

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(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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