Rudi’s View: Pre-August Picks In Resources, Retail & Small Caps

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Freshly updated stock picked sector favourites, Best Buys and Conviction Calls in Australia.

In today's edition:

• Opportunity in Resources
• Gaming sector in focus
• Strategists prefer USA over Australian equities
• Pre-August Key Picks
• Consumer-related stocks ahead of August
• Conviction Calls from Goldman Sachs, Morgan Stanley, Ord Minnett

By Rudi Filapek-Vandyck, Editor

It is a rather rare occurrence to see every single company in a sector carrying a Buy rating, but these days, with the local share market as extremely polarised as it is, such an observation should probably not come as a total surprise.

We’re talking Australian gaming stocks now and UBS has five Buy ratings out of six. Almost.

Then again, Endeavour Group ((EDV)) wouldn’t necessarily be categorised under gaming by analysts elsewhere, irrespective of its exposure to what was once referred to as one-armed bandits.

Endeavour, on struggle street operationally pretty much ever since Woolworths Group spun it off into a separate listing, is the one exception rated Neutral.

The five remaining Buy ratings have different motivations, but the common denominator is that UBS considers the shares too cheaply valued.

Those five are:

• Aristocrat Leisure ((ALL))
• The Lottery Corp ((TLC))
• Light & Wonder ((LNW))
• Tabcorp Holdings ((TAH))
• SkyCity Entertainment ((SKC))

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Traditionally, smaller cap analysts at Morgan Stanley start communicating their Key Picks ahead of results season.

Thus far, they’ve released two names pre-August season:

• Hub24 ((HUB))
• SiteMinder ((SDR))

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Four ASX-listed companies. That’s the sum total that is included in Conviction Buy lists maintained by stock pickers at Goldman Sachs.

The Asian edition features:

• ALS Ltd ((ALQ))
• Ramelius Resources ((RMS))
• ResMed ((RMD))

While Block Inc ((XYZ)) is one of 21 on the US list.

For those with an interest in international opportunities, companies selected include Broadcom, Estee Lauder, Hannover Re, HSBC, Interactive Brokers, Jardine Matheson in Singapore, Mizuho FG, Rheinmetall, Schneider Electric, Tata Consumer Products, and Yum China Holdings.

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Previewing August results, retail analysts at RBC Capital have identified three top picks:

• Universal Store Holdings ((UNI))
• Breville Group ((BRG))
• Kogan ((KGN))

Their colleagues at the healthcare desk issued the following warning:

“While we expect COH’s FY26 underlying result could exceed consensus estimates, we are expecting the company to report a significant non-cash impairment of their listed investments.”

Cochlear ((COH)) has been downgraded to Sector Perform while RBC’s price target has fallen to $117/share from $125.

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Noted: recommended portfolio allocation by strategists at Bell Potter remains Underweight for Australian equities (Overweight elsewhere).

The view remains that a hawkish RBA and Federal Budget are key macro headwinds, while local fundamentals look inferior versus other regions.

Bell Potter’s latest strategy update equally identifies AI as the number one risk for global equities, alongside war in the Middle East and disinflation stalling.

“AI is now doing much of the heavy lifting for both growth and earnings, while index leadership remains narrow. Any downgrade to AI capex, adoption or monetisation expectations would therefore hit the macro narrative and earnings outlook at the same time.”

Decision makers at T Rowe Price share the view:

“We stay underweight Australian equities given a challenging domestic backdrop and downside risks to earnings forecasts, especially for banks, consumer, and housing-linked sectors.”

US strategists at UBS recently reiterated their ongoing positive outlook for US equities:

“We are bullish US equities and target SPX 8100 in 2026 and 8900 in 2027, as the earnings fueled rally continues with NTM EPS forecast to rise ~25% the next 18mo.”

Note: SPX refers to the S&P500 and NTM stands for next twelve months (i.e. foward-looking).

What is not captured in that quote is that the ongoing firm outlook remains underpinned by the AI-inspired tech cycle.

No disagreement from strategists at Morgans:

“Australia is well placed to benefit from the global focus on energy and resource security, with strong structural demand for LNG, critical  minerals and the inputs to AI-driven electrification.

“We underweight our overall position, preferring resources, energy and quality industrials over rate-sensitive financials and expensive defensives.”

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Analysts at Jarden are toying with the idea the present might mark the bottom for consumer-related companies in Australia. Investors are advised to take at least a twelve-month view.

On that basis, Jarden believes the better positioned companies in Australia are:

• JB Hi-Fi ((JBH))
• Wesfarmers ((WES))
• Universal Store Holdings ((UNI))
• Beacon Lighting Group ((BLX))
• Woolworths Group ((WOW))
• Flight Centre ((FLT))

Companies considered most at risk:

• Endeavour Group ((EDV))
• Metcash ((MTS))
• Harvey Norman ((HVN))
• Domino’s Pizza ((DMP))

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Share price weakness has opened up “compelling value opportunities” in the Resources sector, reports Bell Potter, as commodity pricing and underlying fundamentals remain strong.

The broker in particular likes copper, gold, lithium and uranium.

Bell Potter’s key resources stock picks

Base Metals

• Aeris Resources ((AIS))
• Nickel Industries ((NIC))

Gold

• Capricorn Metals ((CMM))
• Evolution Mining ((EVN))
• Ausgold ((AUC))
• Falcon Metals ((FAL))
• Forrestania Resources ((FRS))
• Minerals 260 ((MI6))

Lithium

• Liontown ((LTR))
• Wildcat Resources ((WC8))

Specialty metals & rare earths

• Alpha HPA ((A4N))
• Viridis Mining & Minerals ((VMM))

Energy

• Omega Oil & Gas ((OMA))
• DevEx Resources ((DEV))

Over at Morgans, the preference among lithium producers goes to PLS Ltd ((PLS)), with Mineral Resources ((MIN)) in second spot.

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Morgan Stanley’s Australia Macro+ Focus List:

• Aristocrat Leisure ((ALL))
• AMP Ltd ((AMP))
• ANZ Bank ((ANZ))
• BlueScope Steel ((BSL))
• GemLife Communities Group ((GLF))
• Goodman Group ((GMG))
• Infratil ((IFT))
• Iluka Resources ((ILU))
• Sigma Healthcare ((SIG))
• Santos ((STO))

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Morgan Stanley’s Australia Macro+ Model Portfolio:

ANZ Bank ((ANZ))
CommBank ((CBA))
National Australia Bank ((NAB))
Westpac Bank ((WBC))

Macquarie Group ((MQG))

AMP Ltd ((AMP))
Generation Development ((GDG))
Suncorp Group ((SUN))

Charter Hall ((CHC))
GemLife Communities Group ((GLF))
Goodman Group ((GMG))
Scentre Group ((SCG))

Aristocrat Leisure ((ALL))
Domino’s Pizza ((DMP))
The Lottery Corp ((TLC))
Wesfarmers ((WES))
Xero ((XRO))

James Hardie ((JHX))

Auckland International Airport ((AIA))
Orica ((ORI))
Qantas Airways ((QAN))
SGH Ltd ((SGH))

Sigma Healthcare ((SIG))

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

Infratil ((IFT))
Transurban ((TCL))
Tuas ((TUA))

BHP Group ((BHP))
BlueScope Steel ((BSL))
Iluka Resources ((ILU))
Lynas Rare Earths ((LYC))
Newmont Corp ((NEM))
Rio Tinto ((RIO))
South32 ((S32))

Ampol ((ALD))
Paladin Energy ((PDN))
Santos ((STO))
Woodside Energy ((WDS))

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Ord Minnett’s Analysts’ Conviction List now includes Vista Group ((VGL)).

The ten stocks that retained their spot are:

• Alkane Resources ((ALK))
• Breville Group ((BRG))
• Cuscal ((CCL))
• GrainCorp ((GNC))
• Lindsay Australia ((LAU))
• Regis Healthcare ((REG))
• Service Stream ((SSM))
• Shape Australia ((SHA))
• Viridis Mining & Minerals ((VMM))
• Zip Co ((ZIP))

See also:

https://fnarena.com/index.php/2026/07/16/rudis-view-small-cap-favourites-ai-more/

https://fnarena.com/index.php/2026/07/09/rudis-view-julys-stock-pickers-favourites/

https://fnarena.com/index.php/2026/07/02/rudis-view-best-buys-conviction-calls-in-july/

(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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