Rudi’s View: Post-February Conviction Calls

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            [91] => ((NEM))
            [92] => ((RIO))
            [93] => ((PLS))
            [94] => ((S32))
            [95] => ((STO))
            [96] => ((WDS))
            [97] => ((CSL))
            [98] => ((SIG))
            [99] => ((AMC))
            [100] => ((WDS))
            [101] => ((GPT))
            [102] => ((GMG))
            [103] => ((REA))
            [104] => ((PNI))
            [105] => ((ALQ))
            [106] => ((ORI))
            [107] => ((ARB))
            [108] => ((LOV))
            [109] => ((UNI))
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            [132] => ((DMP))
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            [15] => HLO
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            [121] => NEM
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            [127] => BAP
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            [130] => AMC
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            [132] => DMP
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            [138] => SPK
            [139] => WDS
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)

This story features WISETECH GLOBAL LIMITED, and other companies.
For more info SHARE ANALYSIS: WTC
The company is included in ASX50, ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH

Conviction Buys and sector favourites post the February results season in Australia (including those best to avoid).

By Rudi Filapek-Vandyck, Editor

One of the key dynamics that characterised the February results season is investors/traders seemed of the intent to sell certain market segments, no matter what, and a good or even excellent result release was only slowing down that process.

It hasn’t gone unnoticed. Datt Capital, in a press release delivered into the FNArena inbox, suggests investors should pay attention, and treat such behaviour as longer-term opportunities.

This too shall pass?

The asset manager assures a time will come when fundamentally sound companies will again start trading in line with their profits and fundamentals. The divergence currently occurring should be seen within such framework.

“What surprised us most this reporting season was the clear divergence between the underlying earnings delivered by companies and the way markets reacted to those results.”

Another snippet worth highlighting:

“Businesses with structurally strong earnings drivers were not necessarily rewarded in the short term. In our view, that has opened a broader opportunity set for disciplined investors. Over time, markets will once again differentiate between companies with durable competitive advantages and those facing deeper structural challenges.”

One of the themes that has kept a firm lid on technology and software companies in particular is the threat of industry disruption through AI development. Datt does not hesitate to take the opposing side of the public debate:

“(…) many technology companies remain strongly positioned as they possess access to proprietary or regulated data sets that cannot easily be replicated. These data sets effectively form a structural moat that is hard to compete against.

“As AI tools improve productivity, operating margins can actually expand significantly over time.”

Equally interesting is analysis by UBS has come to the conclusion AI will actually increase (not decrease) demand for software developers, and for software applications too. Peers at Citi have formed the same conclusion with regards to data centres and AI-supporting hardware and infrastructure.

As reported multiple times over in my writings, many a clear-headed sector analyst has nominated global logistics infrastructure services provider WiseTech Global ((WTC)) as one prime candidate whose share price punishment (if we can call it that) seems overcooked, even if there is no short-term relief on the horizon when Iran, Hormuz, inflation, bond yields and RBA tightening continue to dominate investors’ mindset.

Datt too has nominated WiseTech Global as structurally “well positioned”, in contrast to the steep weakening that has pulled down the share price to circa $47 from $115-plus in July last year.

Another trend highlighted is an increase in M&A for smaller cap companies, equally seen as yet more evidence current market sentiment is too short-term focused.

And yes, history does show this too shall pass, eventually.

See also:

https://fnarena.com/index.php/2026/03/11/rudis-view-taco-time/

https://fnarena.com/index.php/2026/03/04/rudis-view-a-season-of-large-cap-winners/

https://fnarena.com/index.php/2026/02/26/rudis-view-positives-from-february-results/

https://fnarena.com/index.php/2026/02/19/rudis-view-more-surprises-led-by-cba-bhp/

Conviction Calls & Best Buys

Let’s start with the first (or second) most important sector for the local market:

Morgan Stanley on Australian banks:

“Despite a good February 2026 reporting season, we think the combination of high expectations and high multiples indicates the probability of underperformance vs the ASX200 in 2026 is greater than the likelihood of another year of outperformance.”

****

RBA rate hikes are ‘a-comin’. Better not to expect any miracles from retailers and companies reliant on discretionary household spending.

Macquarie has lined up its sector favourites:

• Coles Group ((COL))
• Wesfarmers ((WES))
• Bega Cheese ((BGA))

Remain Least Preferred:

• Endeavour Group ((EDV))
• Inghams Group ((ING))
• Domino’s PIzza ((DMP))

****

Sector analysts at stockbroker Morgans have two key picks:

• Lovisa Holdings ((LOV))
• Universal Store Holdings ((UNI))

****

Peers at Jarden much like:

• Sigma Healthcare
• Woolworths Group ((WOW))
• Coles Group
• Harvey Norman ((HVN))
• JB Hi-Fi ((JBH))
• Temple & Webster ((TPW))
• Flight Centre Travel ((FLT))
• Beacon Lighting Group ((BLX))
• Helloworld Travel ((HLO))

Junk food, erm sorry, quick service restaurant operators and those in the liquor business are considered “most challenged” and thus least preferred at Jarden.

****

UBS has Buy ratings for:

• Breville Group ((BRG))
• Coles Group
• Domino’s Pizza
• Guzman y Gomez ((GYG))
• JB Hi-Fi
• Metcash ((MTS))
• Premier Investments ((PMV))
• Sigma Healthcare
• Universal Store Holdings

UBS’s one and only Sell rating is reserved for:

Treasury Wine Estates ((TWE)).

****

When it comes to online classifieds, Macquarie analysts might well be the most hesitant to call the local sector an opportunity. Too early to call whether AI will prove a threat or a blessing remains the in-house non-conviction.

On that basis, most risk is seen with jobs platform Seek ((SEK)), while Car Group ((CAR)) and REA Group ((REA)) are equally classified as under “lack of identifiable re-rating catalysts”.

Elsewhere, Macquarie’s favourites among ASX-listed contractors are identified as:

• NRW Holdings ((NRW))
• Ventia Services ((VNT))
• Downer EDI ((DOW))
• Service Stream ((SSM))

Here one can sense a retreat in overall enthusiasm, generally speaking, among analysts for Worley ((WOR)) after a particularly disappointing February result release.

****

The healthcare sector, yet again, could not deliver the goods in February. It has been a tough experience for investors in this sector post-covid lockdowns stimulus.

And it most certainly is not just because the local leader CSL ((CSL)) is having its own set of persistent challenges.

The good news, according to healthcare analysts at stockbroker Morgans, is February results did not provide evidence of structural deterioration for CSL & Co.

To the contrary, these analysts argue revenue growth was widespread, while also acknowledging the debate about sustainability rages on.

Morgans considers the sector undervalued, but admits share price performance now directly correlates with actual deliveries. February was not the season for that, alas (unlike a few examples such as ResMed ((RMD)), Sigma Healthcare ((SIG)), Fisher & Paykel Healthcare ((FPH)) and –maybe– Ramsay Health Care ((RHC)).

Sector analysts at Wilsons point out there remain pockets of strength inside the sector, with both ResMed and Fisher & Paykel Healthcare continuing to operate inside an earnings upgrade cycle.

Morgans currently has positive ratings on:

• CSL
• Nanosonics ((NAN))
• Pro Medicus ((PME))
• ResMed
• Sonic Healthcare ((SHL))
• Sigma Healthcare

Wilsons highlights the sector overall is now trading on de-rated valuations not seen in many years, which also explains why its Model Portfolio is overweighted the sector.

Specifically highlighted are:

• ResMed
• Cochlear
• Telix Pharmaceuticals ((TLX))
• CSL

In case anyone wonders: Wilsons is of the view that ongoing challenges for CSL are now priced-in through a very cheap valuation.

Over at Morgan Stanley, positive ratings rule for:

• Telix Pharmaceuticals
• CSL
• ResMed
• Fisher & Paykel Healthcare

Least liked:

• Ramsay Health Care
• Cochlear

Macquarie’s sector Top Picks:

• ResMed
• Sonic Healthcare
• Regis Healthcare ((REG))
• Pro Medicus
• Integral Diagnostics ((IDX))

Least picks:

• Cochlear
• CSL
• Australian Clinical Labs ((ACL))
• Healius ((HLS))

Jarden’s favourites:

• Ramsay Health Care
• ResMed
• CSL

With ongoing risks seen for:

• Cochlear
• Sonic Healthcare

UBS: “We believe that Healthcare stocks show the most compelling valuation story amongst ASX sectors.”

****

Citi’s order of preference for Australia’s diversified financials is:

• Challenger ((CGF))
• AMP ((AMP))
• Generation Development ((GDG))
• Computershare ((CPU))

All are rated Buy, followed by:

• Perpetual ((PPT))
• ASX ((ASX))
• Resimac Group ((RMC)); this is the only Sell-rated to date.

****

Morgan Stanley’s Australia Macro+ Focus List has remained unchanged since September last year, with the following ten constituents:

• Aristocrat Leisure ((ALL))
• AMP ((AMP))
• ANZ Bank ((ANZ))
• BlueScope Steel ((BSL))
• GemLife Communities Group ((GLF))
• Goodman Group ((GMG))
• Iluka Resources ((ILU))
• Seek ((SEK))
• The Lottery Corp ((TLC))
• Xero ((XRO))

****

Morgan Stanley’s Australia Macro+ Model Portfolio:

• ANZ Bank ((ANZ))
• CommBank ((CBA))
• National Australia Bank ((NAB))
• Westpac Bank ((WBC))
• Macquarie Group ((MQG))
• AMP ((AMP))
• Generation Development Group ((GDG))
• Suncorp Group ((SUN))
• GemLife Communities Group ((GLF))
• Goodman Group ((GMG))
• Scentre Group ((SCG))
• Stockland ((SGP))
• Aristocrat Leisure ((ALL))
• Domino’s Pizza ((DMP))
• The Lottery Corp ((TLC))
• Wesfarmers ((WES))
• Xero ((XRO))
• James Hardie ((JHX))
• REA Group ((REA))
• Orica ((ORI))
• Qube Holdings ((QUB))
• Seek ((SEK))
• Coles Group ((COL))
• Sigma Healthcare ((SIG))
• CSL ((CSL))
• ResMed ((RMD))
• Telstra ((TLS))
• Transurban ((TCL))
• Tuas ((TUA))
• BHP Group ((BHP))
• BlueScope Steel ((BSL))
• Iluka Resources ((ILU))
• Newmont Corp ((NEM))
• Rio Tinto ((RIO))
• PLS Group ((PLS))
• South32 ((S32))
• Santos ((STO))
• Woodside Energy ((WDS))

****

As reported in Monday’s Weekly Insights, stockbroker Morgans added the following inclusions to its selection of Best Stock Ideas in Australia:

• Sigma Healthcare ((SIG))
• Generation Develoment ((GDG))
• GemLife Communities ((GLF))
• Judo Bank ((JDO))

The rest of the selection:

• CSL ((CSL))
• Sigma Healthcare ((SIG))
• Amcor ((AMC))
• Woodside Energy ((WDS))
• GPT Group ((GPT))
• Goodman Group ((GMG))
• REA Group ((REA))
• Pinnacle Investment Management ((PNI))
• ALS Ltd ((ALQ))
• Orica ((ORI))
• ARB Corp ((ARB))
• Lovisa Holdings ((LOV))
• Universal Store Holdings ((UNI))
• Judo Capital ((JDO))
• Elders ((ELD))
• Flight Centre Travel ((FLT))
• Aristocrat Leisure ((ALL))
• ResMed ((RMD))
• TechnologyOne ((TNE))
• Generation Development ((GDG))
• Megaport ((MP1))
• Pro Medicus ((PME))
• MA Financial Group ((MAF))
• EBR Systems ((EBR))
• Newmont Corp ((NEM))
• Ramelius Resources ((RMS))
• Capstone Copper ((CSC))
• Dalrymple Bay Infrastructure ((DBI))
• GemLife Communities Group ((GLF))
• LGI Ltd ((LGI))

****

Stocks currently Overweighted in Bell Potter’s Model Portfolio include:

• Life360 ((360))
• Amcor ((AMC))
• ANZ Bank ((ANZ))
• Bega Cheese ((BGA))
• BHP Group ((BHP))
• Car Group ((CAR))
• Challenger ((CGF))
• Capricorn Metals ((CMM))
• Cedar Woods Properties ((CWP))
• Dalrymple Bay Infrastructure ((DBI))
• Develop Global ((DVP))
• Evolution Mining ((EVN))
• Flight Centre ((FLT))
• Generation Development ((GDG))
• Goodman Group ((GMG))
• Harvey Norman ((HVN))
• Light & Wonder ((LNW))
• Macquarie Group ((MQG))
• News Corp ((NWS))
• Rio Tinto ((RIO))
• ResMed ((RMD))
• SGH Ltd ((SGH))
• Sonic Healthcare ((SHL))
• Santos ((STO))
• Woolworths ((WOW))
• WiseTech Global ((WTC))

****

Another disappointment in February has –finally one might say– led to the removal of Bapcor ((BAP)) from Morningstar’s list of Best Stock Ideas in Australia & New Zealand.

Remain selected:

• AGL Energy ((AGL))
• Auckland International Airport ((AIA))
• Amcor ((AMC))
• ASX ((ASX))
• Domino’s Pizza ((DMP))
• Dexus ((DXS))
• Endeavour Group ((EDV))
• James Hardie ((JHX))
• Ramsay Health Care ((RHC))
• SiteMinder ((SDR))
• Spark New Zealand ((SPK))
• Woodside Energy ((WDS))
• WiseTech Global ((WTC))

Paying subscribers have 24/7 access to my personally 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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