Rudi’s View: BlueScope Steel, IGO, GrainCorp, Pilbara Minerals, Santos & More

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In today's edition:

-FNArena's August Results Monitor
-What The Experts Are Saying
-Review All-Weather Model Portfolio
-Best Buys & Conviction Calls

By Rudi Filapek-Vandyck

FNArena’s August Results Monitor

The Australian corporate results season has officially started but, as per unofficial tradition, the pace of corporate releases remains rather glacial this early in the month.

By this time next week, the numbers will be a lot larger, as the bulk for local seasons is reserved for the final two weeks of the month.

FNArena is keeping a close watch daily: https://fnarena.com/index.php/reporting_season/

What The Experts Are Saying

An observation  from UBS:

“After a multi-year period of underperformance, gold equities (GDX Index) have outperformed the gold price by >40% YTD.

“Gold miners have had a poor track record in recent years resulting in valuation de-rating; but recent results were a net positive for the global gold miners, with the stocks generally delivering record Free Cash Flow, 2025 production/ cost guidance generally maintained (despite higher royalties), management teams demonstrating discipline with limited increases in capex & increasing cash returns.”

UBS’s preferred sector exposures are Barrick Mining, Endeavour, Kinross, AngloGold, & Franco-Nevada. None are listed locally.

****

This month’s update on Morningstar’s Best Stock Ideas in Australia has seen the removal oif IGO Ltd ((IGO)) from the list and the inclusion of Pilbara Minerals ((PLS)).

Among the many discussions whether the return of positive momentum for lithium prices and share prices of linked exposures might prove justified, and sustainable, or not, Morningstar simply sees the market taking a more optimistic stance.

Lithium demand is expected to triple by 2023 from levels registered in 2023 and Pilbara has mine reserves spanning twenty years, and more.

IGO Ltd also has exposure to lithium, of course, but the preference has been switched to Pilbara.

Morningstar’s selection of Best Stock 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))
-Pilbara Minerals
-Ramsay Health Care ((RHC))
-SiteMinder ((SDR))
-Spark New Zealand ((SPK))
-Woodside Energy ((WDS))

****

Equally noteworthy: we couldn’t help but noticing the Conviction Buy list at Goldman Sachs specifically for ASX-listed exposures is now down to three and with Unibail-Rodamco-Westfield ((URW)) about to disappear from the local bourse, will that be two remnants only by month’s end?

-Goodman Group ((GMG))
-ResMed ((RMD))
-Unibail-Rodamco-Westfield

****

Investors looking for exposure to the steel sector are guided towards BlueScope Steel ((BSL)) in UBS’s sector update this week. It’s the only one with a Buy rating in the sector.

UBS does highlight short term the emand outlook, particularly in the US, is subdued due to global trade uncertainty and lower consumer/business confidence. Its optimism is based on the premise things will improve medium term.

Both Sims ((SGM)) and Vulcan Steel ((VSL)) are rated Neutral with the latter continuing to battle the absence of a V-shaped recovery in New Zealand.

****

The week past has seen a major change in view regarding the the ADNOC consortium’s bid for Santos ((STO)) by stockbroker Morgans.

Up until now, the broker remained sceptical about the Treasurer and FIRB approving Santos becoming a foreign-owned key energy operator in the Australian landscape.

But with its balance sheet stretched and gas reserves constrained, Morgans can see the government turning more accommodative as the new owner would bring along deep pockets and most likely be willing to agree to some restriction (such as some reservations for domestic consumers).

The result has been a swift double-take upgrade in Morgans’s rating to Accumulate from Trim. In the same vein, and with an oil price remaining under pressure, the broker has downgraded both Woodside Energy ((WDS)) and Karoon Gas ((KAR)) to Accumulate from Buy.

Irrespective of the weak pricing environment for oil, share prices have appreciated by a lot these past number of weeks, leading Morgans to suggest the easy gains have by now been made in this sector.

Elsewhere, every update on global opportunities inside the energy sector by RBC Capital features Woodside Energy, and only Woodside as far as ASX-listed exposures are concerned.

****

Bell Potter‘s selection of preferred stocks in the agriculture sector has seen the addition of GrainCorp ((GNC)).

Were already on the list:

-Bega Cheese ((BGA))
-Elders ((ELD))
-Nufarm ((NUF))
-Rural Funds Group ((RFF))

Elsewhere, Bell Potter analysts favour stocks exposed to a recovery in Out Of Home consumption, including Bega Cheese, Retail Food Group ((RFG)) and Noumi ((NOU)), and market leading discretionary retail exposures, including JB Hi-Fi ((JBH)), Universal Store Holdings ((UNI)), and Harvey Norman ((HVN)).

****

Not wanting to depress anyone’s mood, but the following quote summarises UBS’s outlook for US equities (lower, for now):

“US’ growth inflation mix is likely to worsen. Along with dampening earnings growth expectations, this should also lift equity volatility, which, in turn, would challenge the flow driven momentum trade buoying valuations.

“This drives us to call the market lower in the near-term and to expect it to remain below current levels even by end ’25. We then see a smart recovery in H2 ’26.”

On UBS’s projections, the S&P500 is en course for a correction to 5900 around late Q3/early Q4 before recovering to 6100 by end 2025 and 6800 by end 2026.

Peers at Citi have their own ideas:

“The S&P 500 continues to trade in “euphoric” conditions per our Levkovich Index. History shows that this entails higher volatility.

“Our base case year-end expectation for the S&P 500 is lifted to 6600. The new bull case is 7200, with bear case at 5600.”

One more, from Wilsons:

“We see the 6-to-12-month outlook as decent.

Longer term the US market should”remain supported by significant structural technology sector tailwinds, so our caution is tactical rather than strategic.”

In preparation of August:

https://fnarena.com/index.php/2025/08/13/rudi-interviewed-is-august-too-early/

https://fnarena.com/index.php/2025/08/06/rudis-view-five-bellwethers-for-august/

https://fnarena.com/index.php/2025/07/30/rudis-view-taking-stock-ahead-of-august/

https://fnarena.com/index.php/2025/07/24/rudis-view-bega-cheese-cettire-harvey-norman-sigma-siteminder-more/

https://fnarena.com/index.php/2025/07/23/rudis-view-extreme-bifurcation-ahead-of-august/

https://fnarena.com/index.php/2025/07/17/rudis-view-aussie-broadband-oohmedia-paladin-energy-seek-xero-more/

https://fnarena.com/index.php/2025/07/16/rudis-view-navigating-covid-legacies/

Review All-Weather Model Portfolio

The financial year ending on June 30th 2025 featured the return of Donald Trump in the White House and of extreme market volatility.

The second half of the year also saw doubt creeping into general sentiment towards AI and demand for data centres.

All in all, a gain of 13.85% (pre-fees) for the twelve months is not something to be unhappy about, right?

FY25 review of the All-Weather Model Portfolio: https://www.fnarena.com/index.php/download-article/?n=4B38C0EF-A173-8CE6-736A7AFC7B19FC49

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))

****

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))

****

Jarden’s 18 Best Ideas among Australia’s small caps (“emerging companies”) includes 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))

****

Macquarie‘s small caps desk nominated its favourites (Best Picks) ahead of the August results season.

-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))

****

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))

****

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/

(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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