Baker Young and Ord Minnett stock pickers see upside in Rio, Ramsay, WEB Travel and NextDc

It may be the festive season but our expert stock pickers are always watching their portfolios and this week see buying opportunities in health, mining, tech and travel sectors.

Ord Minnett senior private wealth adviser Tony Paterno rates Rio Tinto a BUY.

It may be the festive season but our expert stock pickers are always keeping an eye on their portfolios.

Health, mining and tech-related stocks have caught their attention this week as potential buying opportunities.

Toby Grimm from Baker Young fancies Ramsay Health Care and data centre operator NextDC.

Rio Tinto and WEB Travel were Tony Paterno from Ord Minnett’s top BUY recommendations.

With two trading days to go this year, IG market analyst Tony Sycamore said the local bourse will notch up a strong performance for 2024. The benchmark ASX 200 is up 8.84 per cent for the year to date.

“If dividends are included the index has returned a far more impressive 12.15 per cent,” Mr Sycamore said. “We suspect further gains are likely before the end of 2024.”

He said the market is starting to factor in a rate cut in early 2025.

“As we look to 2025, the Australian rates market is pricing in a 43 per cent chance of a 25bp cut from the RBA in February, with a first 25 basis-point reduction from the RBA fully priced for April 2025,” he said..

Here are this week’s tips:

Baker Young managed portfolio analyst Toby Grimm

BUY

Ramsay Health Care (RHC)

With operating and financing cost pressures set to abate somewhat in 2025 we see an earnings inflection point for Australia’s premier private hospital group which is trading at compelling value.

NextDC (NXT)

The recent share price pullback in the datacentre developer NextDC presents an opportunity to buy this structurally advantaged leader at attractive levels.

HOLD

Treasury Wine Estates (TWE)

Global diversification appears to position Treasury well amidst potential currency and trade challenges for competitors next year.

Santos (STO)

A strong balance sheet and low production costs should allow Santos to ride out depressed market conditions and fund future growth projects while maintaining attractive dividends for investors.

SELL

Polynovo (PNV)

Sales growth tied to new products is unlikely to meet lofty market expectations and we believe the stock is overpriced.

Evolution Mining (EVN)

The stock has held up impressively despite recent copper and gold price weakness, and we see superior value elsewhere in the sector.

NextDC boss Craig Scroggie. Picture: Mark Cranitch.

Ord Minnett senior private wealth adviser Tony Paterno

BUY

Rio Tinto (RIO)

RIO’s recently reiterated confidence around both the outlook for the Arcadium transaction and the lithium market as a whole. Post transaction RIO will be 3rd largest lithium miner in the world.

WEB Travel Group (WJL)

The company’s strength lies in its ability to mix and match airfares in a consumer-friendly manner. They have invested in key areas to position itself well for future growth.

HOLD

Woolworths Group (WOW)

Management have noted that the estimated impact on sales recent strike disruption was $140m. We prefer Coles at these levels.

Woodside Energy (WDS)

Despite the value on offer following recent share price weakness, we still see capital expenditure concerns that will dim the prospects for shareholder returns.

SELL

ASX Ltd (ASX)

Trading on an elevated valuation. ASX has had a few years of recovery in operating trends post some weakness in Covid, however operating conditions are expected to start to moderate from here.

Wesfarmers (WES)

WES AGM trading update indicates that the Australian consumer continues to focus on value. WES has become less overvalued recently, but we concerned with consensus downgrades and lofty valuation

Originally published as Baker Young and Ord Minnett stock pickers see upside in Rio, Ramsay, WEB Travel and NextDc