Rudi’s View: Copper, Aluminium & Technology (!)

Array
(
    [0] => Array
        (
            [0] => ((SFR))
            [1] => ((AAI))
            [2] => ((EVN))
            [3] => ((NST))
            [4] => ((PDN))
            [5] => ((NST))
            [6] => ((PDI))
            [7] => ((CMM))
            [8] => ((GGP))
            [9] => ((NEM))
            [10] => ((RMS))
            [11] => ((IGO))
            [12] => ((MIN))
            [13] => ((SFR))
            [14] => ((CSC))
            [15] => ((SMR))
            [16] => ((WHC))
            [17] => ((ANZ))
            [18] => ((APA))
            [19] => ((AZJ))
            [20] => ((ASX))
            [21] => ((CBA))
            [22] => ((ING))
            [23] => ((REH))
            [24] => ((TPW))
            [25] => ((BSL))
            [26] => ((GMD))
            [27] => ((LYC))
            [28] => ((MIN))
            [29] => ((NEM))
            [30] => ((ORI))
            [31] => ((ORG))
            [32] => ((RIO))
            [33] => ((AUB))
            [34] => ((GMG))
            [35] => ((IAG))
            [36] => ((NHF))
            [37] => ((WBC))
            [38] => ((CAT))
            [39] => ((COH))
            [40] => ((COL))
            [41] => ((MTS))
            [42] => ((NXT))
            [43] => ((REA))
            [44] => ((RMD))
            [45] => ((SGH))
            [46] => ((SIG))
            [47] => ((TLS))
            [48] => ((VGN))
            [49] => ((WTC))
            [50] => ((BHP))
            [51] => ((HVN))
            [52] => ((SLC))
            [53] => ((TNE))
            [54] => ((BHP))
            [55] => ((RIO))
            [56] => ((LTR))
            [57] => ((MIN))
            [58] => ((CSC))
            [59] => ((TPW))
            [60] => ((FLT))
            [61] => ((CKF))
            [62] => ((REA))
            [63] => ((TNE))
            [64] => ((LGI))
            [65] => ((GPT))
            [66] => ((FLT))
            [67] => ((CTD))
            [68] => ((CKF))
            [69] => ((ALQ))
            [70] => ((AMC))
            [71] => ((ARB))
            [72] => ((ALL))
            [73] => ((GMG))
            [74] => ((CSC))
            [75] => ((CSL))
            [76] => ((DBI))
            [77] => ((DGT))
            [78] => ((EBR))
            [79] => ((ELD))
            [80] => ((GYG))
            [81] => ((HDN))
            [82] => ((LOV))
            [83] => ((MAF))
            [84] => ((MP1))
            [85] => ((NST))
            [86] => ((ORI))
            [87] => ((PNI))
            [88] => ((PWH))
            [89] => ((QAL))
            [90] => ((RMD))
            [91] => ((TYR))
            [92] => ((WDS))
            [93] => ((UNI))
            [94] => ((CAR))
            [95] => ((EOL))
            [96] => ((HSN))
            [97] => ((360))
            [98] => ((QOR))
            [99] => ((XRO))
            [100] => ((AZJ))
            [101] => ((PLS))
            [102] => ((AMC))
            [103] => ((JHX))
            [104] => ((ASX))
            [105] => ((AIA))
            [106] => ((BAP))
            [107] => ((DXS))
            [108] => ((DMP))
            [109] => ((EDV))
            [110] => ((IEL))
            [111] => ((RHC))
            [112] => ((SDR))
            [113] => ((SPK))
            [114] => ((WTC))
            [115] => ((WDS))
        )

    [1] => Array
        (
            [0] => SFR
            [1] => AAI
            [2] => EVN
            [3] => NST
            [4] => PDN
            [5] => NST
            [6] => PDI
            [7] => CMM
            [8] => GGP
            [9] => NEM
            [10] => RMS
            [11] => IGO
            [12] => MIN
            [13] => SFR
            [14] => CSC
            [15] => SMR
            [16] => WHC
            [17] => ANZ
            [18] => APA
            [19] => AZJ
            [20] => ASX
            [21] => CBA
            [22] => ING
            [23] => REH
            [24] => TPW
            [25] => BSL
            [26] => GMD
            [27] => LYC
            [28] => MIN
            [29] => NEM
            [30] => ORI
            [31] => ORG
            [32] => RIO
            [33] => AUB
            [34] => GMG
            [35] => IAG
            [36] => NHF
            [37] => WBC
            [38] => CAT
            [39] => COH
            [40] => COL
            [41] => MTS
            [42] => NXT
            [43] => REA
            [44] => RMD
            [45] => SGH
            [46] => SIG
            [47] => TLS
            [48] => VGN
            [49] => WTC
            [50] => BHP
            [51] => HVN
            [52] => SLC
            [53] => TNE
            [54] => BHP
            [55] => RIO
            [56] => LTR
            [57] => MIN
            [58] => CSC
            [59] => TPW
            [60] => FLT
            [61] => CKF
            [62] => REA
            [63] => TNE
            [64] => LGI
            [65] => GPT
            [66] => FLT
            [67] => CTD
            [68] => CKF
            [69] => ALQ
            [70] => AMC
            [71] => ARB
            [72] => ALL
            [73] => GMG
            [74] => CSC
            [75] => CSL
            [76] => DBI
            [77] => DGT
            [78] => EBR
            [79] => ELD
            [80] => GYG
            [81] => HDN
            [82] => LOV
            [83] => MAF
            [84] => MP1
            [85] => NST
            [86] => ORI
            [87] => PNI
            [88] => PWH
            [89] => QAL
            [90] => RMD
            [91] => TYR
            [92] => WDS
            [93] => UNI
            [94] => CAR
            [95] => EOL
            [96] => HSN
            [97] => 360
            [98] => QOR
            [99] => XRO
            [100] => AZJ
            [101] => PLS
            [102] => AMC
            [103] => JHX
            [104] => ASX
            [105] => AIA
            [106] => BAP
            [107] => DXS
            [108] => DMP
            [109] => EDV
            [110] => IEL
            [111] => RHC
            [112] => SDR
            [113] => SPK
            [114] => WTC
            [115] => WDS
        )

)

This story features SANDFIRE RESOURCES LIMITED, and other companies.
For more info SHARE ANALYSIS: SFR
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

This week’s updates on strategy and preferred stock picks.

By Rudi Filapek-Vandyck, Editor

As things stand, investors have three key issues to deal with for the year ahead:

• RBA tightening (the market is preparing for it)
• The return of cyclicals and commodities
• The ongoing promise (and build out) of AI

The first factor is probably why the local share market cannot get any sustainable momentum irrespective of the usual seasonal bias.

But market strategists at Wilsons assure us history shows the local market tends to grind higher during periods when the Federal Reserve is still lowering rates and the RBA starts preparing for rate hikes.

The combination does usually favour a stronger AUD and this in return usually translates into positive momentum for resources.

Wilsons’ preferred large-cap exposures are copper, via Sandfire Resources ((SFR))), aluminium, via Alcoa ((AAI)), and gold via Evolution Mining (((EVN)) and Northen Star Resources ((NST)).

As an aside, Wilsons remains concerned about valuations for the major banks generally and would avoid domestic cyclicals (consumer discretionary, media and retail).

We’ll talk more about factor two below. The third factor –AI– is at this point something investors and strategists talk about outside of Australia, as any related share prices on the ASX remain deeply embedded inside a sectorial bear market.

I know, go figure!

Cyclicals and commodities is where all the present action and money flows are concentrating on, and this too is reflected in recent strategy and analysts’ sector updates locally.

Metals and mining analysts at Barrenjoey further increased their pricing projections for the year ahead, while stating they have become more optimistic in comparison with earlier times in 2025.

The new uptrend is mainly supply-driven, but that doesn’t make the overall enthusiasm, and upgrades to projections, any less material.

Barrenjoey has grabbed the opportunity to upgrade Paladin Energy ((PDN)) to Neutral from Underweight, but gold derivatives Northern Star ((NST)) and Predictive Discovery ((PDI)) have both been downgraded to Neutral from Overweight following steep share price performances.

The new forecast for bullion is 8% higher for 2026 to US$4,200/oz. Most other pricing projections went up more modestly, but most are positioned above current consensus, in particular lithium, base metals and met coal.

Barrenjoey’s preferred gold exposures are Capricorn Metals ((CMM)), Greatland Resources ((GGP)), Newmont Corp ((NEM)), and Ramelius Resources ((RMS)).

For lithium exposure, most preferred are IGO Ltd ((IGO)) and Mineral Resources ((MIN)).

For copper exposure, Sandfire Resources ((SFR)) is most preferred, but Capstone Copper ((CSC)) is also mentioned.

With coal and uranium prices expected to move higher in 2026, the team’s preference goes out to Stanmore Resources ((SMR)) and Whitehaven Coal ((WHC)), while Paladin Energy is Barrenjoey’s preferred uranium play on the ASX.

UBS likes Mining AND Technology

A shift to Overweight exposure for the mining sector equally features in UBS’ updates on Most Preferred and Least Preferred stocks on the ASX.

Technology, despite being notably out-of-favour at the moment, retains an Overweight allocation in this broker’s Model Portfolio.

Let’s start with the smallest selection first; the following stocks remain absolutely disliked by UBS strategists:

• ANZ Bank ((ANZ))
• APA Group ((APA))
• Aurizon Holdings ((AZJ))
• ASX Ltd ((ASX))
• CommBank ((CBA))
• Inghams Group ((ING))
• Reece ((REH))

Is no longer included: Temple & Webster ((TPW))

The selection of Most Preferreds is a lot longer and broader reaching:

Resources

• BlueScope Steel ((BSL))
• Genesis Minerals ((GMD))
• Lynas Rare Earths ((LYC))
• Mineral Resources ((MIN))
• Newmont Corp ((NEM))
• Orica ((ORI))
• Origin Energy ((ORG))
• Rio Tinto ((RIO))

Financials & REITs

• AUB Group ((AUB))
• Goodman Group ((GMG))
• Insurance Australia Group ((IAG))
• nib Holdings ((NHF))
• Westpac ((WBC))

Industrials

• Catapult Sports ((CAT))
• Cochlear ((COH))
• Coles Group ((COL))
• Metcash ((MTS))
• NextDC ((NXT))
• REA Group ((REA))
• ResMed ((RMD))
• SGH Ltd ((SGH))
• Sigma Healthcare ((SIG))
• Telstra ((TLS))
• Virgin Australia ((VGN))
• WiseTech Global ((WTC))

Have been freshly added: Lynas Rare Earths, Mineral Resources, Rio Tinto –that’s how one achieves Resources Overweight– as well as AUB Group, Catapult Sports, and Sigma Healthcare.

Have recently been removed: BHP Group ((BHP)), Harvey Norman ((HVN)), Superloop ((SLC)), and TechnologyOne ((TNE)).

The aforementioned Barrenjoey sees “better value” in Australia’s mining majors BHP Group ((BHP)) and Rio Tinto ((RIO)). Peers at UBS equally acknowledge there is upside potential, but for now they stick with a Neutral rating.

UBS continues a bullish stance on gold names with a preference for Newmont Corp, while having turned more constructive regarding lithium’s outlook.

UBS has Buy ratings for Liontown ((LTR)) and Mineral Resources ((MIN)). The view is equally positive for copper “given strong fundamentals”. Here the preference resides with Capstone Copper ((CSC)).

UBS finds the outlook for coal remains challenged, with tightness to ease as key projects ramp up.

Citi & RBC Capital

Sector analysts at Citi are most bullish on copper and aluminum and more cautious on bulks and precious, and positive on steel.

Analysts at RBC Capital have lined up their favourites among Australia’s retailers and businesses directly linked to household spending.

Stock ideas:

• In Retail: Temple & Webster ((TPW))
• In Travel: Flight Centre ((FLT))
• Among Quick service restaurants: Collins Foods ((CKF))

The analysts highlight KFC remains the strongest Australian QSR brand, taking market share, in a structurally growing category (poultry), at a value price point.

Best Ideas from Morgans

Stockbroker Morgans’ selection of Best Buys has been expanded with REA Group ((REA)), TechnologyOne ((TNE)), LGI ((LGI)), GPT Group ((GPT)) and Flight Centre ((FLT)).

Have been removed: Corporate Travel Management ((CTD)) and Collins Foods ((CKF)).

The list of Best Buys now consists of 30 stocks, with the following retaining their inclusion:

ALS Ltd ((ALQ))
Amcor ((AMC))
ARB Corp ((ARB))
Aristocrat Leisure ((ALL))
Goodman Group ((GMG))
Capstone Copper ((CSC))
CSL ((CSL))
Dalrymple Bay Infrastructure ((DBI))
DigiCo Infrastructure REIT ((DGT))
EBR Systems ((EBR))
Elders ((ELD))
Guzman y Gomez ((GYG))
HomeCo Daily Needs REIT ((HDN))
Lovisa Holdings ((LOV))
MA Financial ((MAF))
Megaport ((MP1))
Northern Star Resources ((NST))
Orica ((ORI))
Pinnacle Investment Management ((PNI))
PWR Holdings ((PWH))
Qualitas ((QAL))
ResMed ((RMD))
Tyro Payments ((TYR))
Woodside Energy ((WDS))
Universal Store Holdings ((UNI))

Ord Minnett sees Technology opportunities

As noted, Technology and the ASX have become ugly ducklings to each other. Ord Minnett sees this as an opportunity to revisit some of its High-Conviction ideas in this segment.

The result is a firm re-iteration the following companies are supported by structural growth drivers and strong fundamentals:

• Car Group ((CAR))
• Energy One ((EOL))
• Hansen Technologies ((HSN))
• Life360 ((360))
• Qoria ((QOR))
• Xero ((XRO))

Morningstar’s Best Ideas

Morningstar’s Best Equity Ideas for Australia & New Zealand have equally seen a few changes, with two fresh inclusions and two removals (one has been a perennial disappointment).

The disappointment I am referring to is Aurizon Holdings ((AZJ)) which has been on this list since 2021 but investment return since then is only minimally positive and only thanks to dividend payments over that period. The second removal is lithium miner Pilbara Minerals ((PLS)).

Have been added this month: Amcor ((AMC)) and James Hardie ((JHX)).

The thirteen that remain on the list:

• ASX Ltd ((ASX))
• Auckland International Airport ((AIA))
• Bapcor ((BAP))
• Dexus ((DXS))
• Domino’s Pizza Enterprises ((DMP))
• Endeavour Group ((EDV))
• IDP Education ((IEL))
• Ramsay Health Care ((RHC))
• SiteMinder ((SDR))
• Spark New Zealand ((SPK))
• WiseTech Global ((WTC))
• Woodside Energy ((WDS))

I always feel I need to warn investors Morningstar’s criteria for selection almost exclusively concentrate on a ‘cheap’ looking valuation and many stocks on the list can remain on it for prolonged periods therefore requiring a lot of patience.

Even then, there’s no guarantee of a positive end outcome, see Aurizon Holdings. Bapcor yet again issued a profit warning this week.

And it’s not as if the signals are pointing towards a firm momentum switch for the likes of Domino’s Pizza, IDP Education and Endeavour Group, while the ASX, Dexus and Ramsay Health Care have been in struggle street for a long while.

Horses for courses?

Paying subscribers have 24/7 access to my curated lists 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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