Australasian Equities - Fat Prophets

Fat Prophets
Australasian Equities

Core

medium

Buy

Underwriting and yields support growth QBE’s (ASX: QBE) 1H26 result shows a better underlying insurance business than the flat headline profit suggests. The global insurer reported higher premiums, kept its claims-and-expenses ratio within target and earned more from its bond portfolio, but slower price increases mean future growth will rely more on selective customer growth and investment income. QBE earns money in two ways: it aims to collect more in premiums than it pays in claims and expenses, then invests the premiums

ANZ Banking Group

Core

medium

Hold

Delivering on the Controllables ANZ (ASX: ANZ) is beginning to show the benefits of its simplification programme, with business lending, core margins and underlying earnings all improving in the June quarter. The bank is still working through the Suncorp integration and a softer mortgage market. A strong capital position and cost-saving progress support the case for a gradual improvement in returns rather than a rapid turnaround. Overall, management is executing well on the items inside its control. Operating expenses fell, and the

Suncorp

Core

medium

Buy

Weather costs testing the core business Suncorp earlier sold its banking division, so the group now earns from two places. Underwriting, which weather impacts, and an investment portfolio that higher bond yields have quietly improved and we believe a structural tailwind will be in place over the coming quarters. FY26 tested the first and rewarded the second. Reported net profit fell 44% to $1.03 billion, yet the underlying insurance business improved: the insurance trading ratio held at 11.8%, the top of

SGH

Core

medium

Buy

Cash flow buys time for growth SGH has delivered a sound FY26 result, highlighting that this is a well-managed, family-aligned business that was able to convert modest earnings growth into cash, reduce debt and still fund investment and a share buy-back. The result supports our current bullish view, although the lower end of FY27 earnings guidance means the next catalyst puts more emphasis on Boral’s margin gains, a recovery in equipment-hire demand, and/or an accretive acquisition. That aside, the Stokes family’s

Westpac

Core

medium

Hold

Mortgage applications slide, though we think the market’s mispricing what comes after that. Westpac’s own disclosures point to a harder FY27 than FY26, and Westpac shares dropped sharply earlier in the week after the Q3 report dropped, dragging peers lower. The market focused on a mortgage application run rate diving 20% post-budget, while we ourselves note a core margin holding only because trading income filled the gap. There was also a modestly larger provisioning established for a consumer base that has

St Barbara

Speculative

high

Buy

The rotation: ‘Cheap’, Cashed-Up, and Now De-Risked The deep value in St Barbara has been there for some time. The stock has not moved north as much as we would have liked, but a share price that has yet to respond fully is not evidence that the value isn’t there. Views on the gold price outlook always vary across a spectrum, and bullion has been volatile in 2026, with a substantial correction since late January/early February. Management has quietly been toiling away

National Australia Bank

Core

medium

Hold

A Tale of Two Lending Books National Australia Bank’s (ASX: NAB) business lending division had the strongest month in years, with lending to business clients up +4% for the quarter and +10% over the past year. However, home loan applications, the bank’s biggest source of profit, fell sharply as recent tax changes and higher interest rates cooled buyer demand. Loans classed as troubled improved slightly, but the number of loans being watched more closely for potential problems rose, particularly in the building and transport industries facing cost

CSL

Core

medium

Hold

A Glimmer of Hope After a Rough Ride Biopharma giant CSL (ASX: CSL) announced trials to test a new manufacturing process that could squeeze more medicine out of the same amount of plasma, cutting costs over time. Shares jumped on the news, offering some relief after a tough year that saw the stock fall by more than half. The move is a solid update and shows that management is finally taking action on a long-promised efficiency upgrade, though the real test will be whether trial

Capstone Copper

Speculative

high

Buy

Seven Quarters Running, Still Climbing Capstone Copper (TSX: CS; ASX: CSC), a major Canadian-domiciled copper producer benefiting from higher copper prices. Copper has been running higher on the back of booming EV demand and AI infrastructure, both of which rely heavily on copper. Meanwhile, Capstone just posted its seventh straight record quarter as copper prices surged to near record highs. One mine in Chile ran well above target output at a very low cost, more than offsetting rising fuel/operating costs at other sites. Debt has fallen, and the company

Whitehaven Coal

Speculative

high

Buy

Digging Deeper, Spending Smarter Whitehaven Coal (ASX: WHC) finished the FY26 at the top of production and sales targets, digging up 40.3 million tonnes, up 3%. Costs per tonne came in lower than expected, thanks to cost-cutting and stronger output from its lower-cost mines. Prices received for their coal also improved as Asian demand picked up. Debt rose after a scheduled payment tied to a past acquisition, but the company refinanced on better terms and kept buying back shares, a sign management remains confident in the business. In our last tech

James Hardie Industries

Core

medium

Buy

A Cleaner Read Ahead of the full quarterly results, James Hardie enjoyed a pop in local trading in late July when it told the market its June quarter had beaten guidance. The 22 July release was a preliminary estimate. Full numbers are due at the end of the week. The stock has bounced nicely since the YTD lows visited in May, but we continue to see additional upside potential over the coming years, with the stock trading below a 13x forward

Fortescue

Speculative

high

Hold

Record Output, Reset Expectations Fortescue (ASX: FMG) shipped a record amount of ore this past year while keeping costs under control, and it now holds far less debt against a healthy cash pile. However, the company has cut its outlook for a newer, lower-grade project, taking a financial writedown to reflect a more cautious view of its future returns. Costs are also expected to rise slightly next year due to currency and fuel prices. Separately, Fortescue must pay a record compensation

Rio Tinto

Core

medium

Buy

Digging Up Record Profits Rio Tinto (ASX: RIO) digs up materials used in steel, wiring and batteries, and it just posted its strongest half year in four years. Profit jumped 43%, and the cash it generated nearly doubled, allowing it to pay out a record dividend to shareholders. Copper earnings almost doubled too, and together with aluminium and battery materials, these now make up more of the company’s income than its traditional iron ore business for the first time. This shift

Woodside Energy

Core

medium

Hold

Running Smooth, Earning More Woodside Energy (ASX: WDS) saw revenue jump 28% thanks to stronger prices, and its main operations ran with very few outages during the quarter. Three major projects, including new gas developments and an export facility, are all progressing on time and on budget. However, output dipped due to planned maintenance, and the company flagged a hit to profit from writedowns and accounting losses tied to hedging contracts. A decision on a further large gas project remains some

Evolution Mining

Speculative

high

Hold

Filling Spare Capacity on the Cheap Evolution Mining (ASX: EVN) has agreed to buy a smaller miner, Carnaby, using its own shares rather than cash. The plan is to feed Carnaby’s high-quality ore into an existing processing plant that already has spare capacity, adding extra copper output at a low cost. However, first production is still years away, with more study, approvals and a shareholder vote needed before the deal is even finalised in November. Evolution’s own share price barely moved

Santos

Speculative

high

Buy

Turning the Corner on a Rocky Start Santos’ (ASX: STO) two newest projects are finally moving past their teething problems. One gas project off northern Australia is now running at 97% of its target output, while a new oil project in Alaska is ramping up towards full capacity. This should lift total output by 20 to 30% in the second half of the year. Prices for the gas Santos sells have also picked up, with a delay in how contracts are

Paladin Energy

Speculative

high

Buy

Full Steam Ahead in Namibia Paladin Energy’s (ASX: PDN) Namibian mine has now moved past the startup phase into full production. The mine finished the year producing near the top of its target range while keeping costs low, and shares jumped on the news. Next year’s output is expected to grow further, with pricing tied to contracts that could rise well above current market rates. The company holds a healthy cash buffer, and a separate project in Canada is progressing through

Generation Development Group

Core

medium

Buy

Three Businesses, One Winning Streak Generation Development Group (ASX: GDG) reported a strong FY26 across its three main businesses, with total client money under management jumping 36% to $46.4 billion. The group’s life insurance-style savings product brought in a record $442 million in new money over the quarter, up 39%, while the portfolio management arm grew 37% to $40.5 billion. Meanwhile, a new partnership widens distribution of their savings product, and the research arm continues to grow its list of rated investment

Stockland Corporation

Core

medium

Hold

Sharing the Load, Keeping the Reins Australian REIT Stockland (ASX: SGP) despite bringing in outside investors to help fund warehouse and shopping centre projects, freeing up capital while keeping control of day-to-day management. The recently announced deal will add $438 million worth of warehouse sites to a partnership with UK-based investor M&G, taking that joint venture to $900 million. A majority stake in three supermarket-anchored shopping centres was sold to Morgan Stanley. Stockland keeps a minority share in both portfolios, and will

Amcor

Core

medium

Hold

All Eggs in the Growth Basket Amcor (ASX: AMC) is expanding a factory in China, adding new leadership to their North American arm, and working with Mondelez to use more recycled plastic in packaging for products like Cadbury Mini Eggs. These are sensible long-term moves but will take time, with the China factory not finishing until 2027 and the North American plans still bedding in new sites and equipment. Returns from both projects will depend on demand and execution over the next year or two. With

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