Australasian Equities - Fat Prophets

Fat Prophets
Australasian Equities

Core

medium

Hold

Alcoa Deal Locks In Three Years of Gas Revenue Woodside Energy (ASX: WDS) has signed a three-year gas supply deal with Alcoa’s Australian alumina refineries that runs from next year through to 2030, locking in a meaningful share of domestic gas volumes. Meanwhile, the group’s offshore Senegal oil field has now produced over 50 million barrels and is being assessed for a potential second phase that could unlock a further 250 million barrels. While near-term sentiment will be dominated by the US/Iran

James Hardie Industries

Core

medium

Buy

What Patient Capital signalled The housing bear case has had a difficult few weeks. In the space of approximately a month, Berkshire Hathaway committed US$8.5 billion to acquire Taylor Morrison, one of the largest US homebuilders, and a landmark bipartisan housing bill cleared both chambers of Congress with wide margins – not an easy feat in today’s fragmented US political environment. Both are favourable for James Hardie and the broader US housing cohort. JHX is the largest exterior cladding supplier

Paladin Energy

Speculative

high

Buy

Seven From Eight Holes Hit Uranium Paladin Energy (ASX: PDN) announced a significant new uranium discovery at the Canadian Patterson Lake South project, named Atlas. Seven of eight drill holes struck uranium, with the strongest results reaching grades of 4.25% (note: an impressive result that is more than 40x higher than the global average for operating uranium mines), located 3.5 kilometres from the company’s existing deposit. The existing deposit holds 93.7 million pounds of uranium at production costs well below current uranium prices.

Judo Capital

Speculative

high

Hold

3 Bad Loans? Judo Capital (ASX: JDO) plunged -40.4% after a profit warning, trimming its full-year profit forecast from A$180-190 million to A$163-169 million. The downgrade was driven by three specific business loans that turned sour, pushing bad debt charges to more than double the bank’s own long-term target. Loan book growth, interest margins and cost controls all remain on track. The question investors are now asking is whether these three problem loans are isolated incidents or an early warning of

Telstra

Core

medium

Buy

When Rotation Creates Opportunity Defensives got sold when the Middle East ceasefire came through. Telstra went with them, giving back some ground since our last note, without any material company-specific news to justify it. Although the stock has attracted some more bids this week amid broader market jitters, it is around 8% below 52-week highs, offering a decent entry point. Telstra owns a large portfolio of economically critical assets. The spectrum licences, the tower network, its new Aura long‑haul fibre backbone

BWP Trust

Core

medium

Buy

Rent on Time and the Portfolio Keeps Growing Quietly BWP Trust (ASX: BWP) has reported a A$115.6 million increase in the value of their properties for the six months to June 2026. Three development sites in Victoria, South Australia and Western Australia contributed A$51.1 million of that gain. The trust raised its half-year income distribution by 4% to 9.83 cents per unit, with full-year distributions on track to reach A$0.1941 per unit. Meanwhile, the RBA holding interest rates steady has eased valuation

WiseTech Global

Speculative

high

Hold

Down 70% YoY; Core Business Has Not Changed WiseTech (ASX: WTC) has already faced a sharp sell-off in early 2026 due to AI disruption fears, which followed earlier governance concerns in 2025. The business itself is high-quality, serving many of the world’s largest logistics providers with CargoWise, which has benefited from high ‘stickiness’ with very low churn, delivering strong cash flows for WiseTech. The e2open acquisition has expanded the total addressable market opportunity. However, Monday’s steep fall highlights that investor nervousness

GrainCorp

Speculative

high

Hold

Focussing on the Home Turf GrainCorp (ASX: GNC) has sold its Canadian grain storage and handling business to a local buyer, completing the transaction on 22 June and booking a modest accounting loss in the process. The sale simplifies the company back to the core business of storing, handling and exporting grain along Australia’s east coast. The outlook for this year’s domestic winter crop has improved after timely rainfall, with government forecasters now expecting a harvest around 2.5% above the ten-year average,

Santos

Speculative

high

Buy

Pikka Is Pumping. Now Santos Has to Deliver the Ramp-Up Santos (ASX: STO) has begun continuous oil production at the Pikka project on Alaska’s North Slope, currently pumping around 20,000 barrels per day and targeting 80,000 barrels per day by the 3Q26. First sales revenue is expected in that same quarter. The project holds an estimated 400 million barrels of proven reserves, with a further 600 million barrels identified for potential future development. Combined with a separate gas project in northern Australia, Santos is entering a period

Evolution Mining

Speculative

high

Hold

Reloading under the surface Gold’s retreat from its early 2026 highs, especially over the past 2-3 months, has hampered sentiment towards Evolution Mining, rather than anything the company itself has done wrong. Since we moved to Hold in late May, noting that gold’s consolidation may have further to run, gold bullion has been weighed down by a hawkish speech from new Fed chair Kevin Warsh, the firmer US dollar, and a partial unwind of the geopolitical risk premium. Central bank

BHP

Core

medium

Buy

Costs Blow Out Again. The Long-Term Case Still Intact BHP (ASX: BHP) has revised the cost of the second phase of its Jansen potash fertiliser project in Saskatchewan, Canada, from US$4.9 billion to US$6.9 billion, and will write down the value of the broader project by US$2.3 billion when it reports its June 2026 financial results. Potash is a key ingredient in agricultural fertiliser used to feed crops globally. Despite the cost increase, BHP says the project remains economically sound, targeting

Qantas

Core

high

Hold

Oil Falls, Margins Up; Eyes on Sunrise Bet Qantas (ASX: QAN) has held up well amid the turbulence of the US-Iran conflict, already regaining much of the lost ground from when the conflict began in late February. Pricing power and travel demand remain resilient, while the recent oil pullback should support margins into year-end. The balance sheet sits within target, giving Qantas room to fund fleet renewal. Project Sunrise (the super long-haul flights plan) now represents a 2027‑onward premium growth option

CSL

Core

medium

Hold

The ‘Moat’ is still there CSL (ASX: CSL) is one of only three major global suppliers of plasma-derived medicines and a leading influenza vaccine manufacturer. CSL has fallen more than 50% over the past year following a series of earnings downgrades, asset write-downs totalling around US$5 billion, and a US$300 million headwind in the core immunoglobulin business. The company has no permanent CEO in place, and the planned separation of the vaccine division has been delayed indefinitely. In our last tech update on

SGH

Core

medium

Buy

Stays True to Long-Term Compounding Playbook SGH (ASX: SGH), the conglomerate led by the Billionaire Stokes family, gained +3% after announcing a share buyback of up to $500 million, while saying it would not impede any acquisition aspirations. The stock has been a good long-term compounder for smaller retail shareholders, benefiting from being aligned with the Stokes’ disciplined capital allocation over the years, accumulating a portfolio of ‘boring’ industrial businesses that quietly build value. In our last tech comment in early

Westpac

Core

medium

Hold

Re-entering Wealth: A Risky Second Act? Westpac (ASX: WBC) is navigating a trickier stretch as rising interest rates and new property tax rules cool demand for home loans. Monthly mortgage applications have fallen around 23% since the December quarter, with investor lending hit hardest. The gap between what the bank earns on loans and what it pays on deposits remains wide while the RBA holds rates at 4.35%, but slower lending volumes are a real constraint on growth. Westpac is investing in

National Australia Bank

Core

medium

Hold

Interest Rates at Decade Highs, is NAB Built to Benefit? National Australia Bank (ASX: NAB) is, in our view, well-positioned to weather the storm as the RBA held the benchmark rate steady at 4.35% this week following three consecutive increases since February. Despite bearish sentiment towards the banking sector, the current rate environment keeps NAB’s net interest margins structurally elevated at cycle highs. New property tax changes from July 2027 will cool investor appetite for mortgages, but the Australian banks are also a

Newmont

Speculative

high

Hold

New Leadership Team Takes the Wheel Just as the Gold Market Hits Its Stride Newmont (NYSE, ASX: NEM) the world’s largest gold producer, generated record free cash flow of US$7.3 billion in FY25 and followed that with another record US$3.1 billion in the 1Q26 alone, supported by rising gold prices and tighter cost controls. The company holds net cash of US$2.1 billion, has launched a US$6 billion share buyback programme, and pays a quarterly dividend of US$0.261 per share. A new leadership

Macquarie Group

Core

medium

Buy

Taking Australia’s Largest Ports Operator Off the Stock Exchange Macquarie Group is taking Qube Holdings, Australia’s largest ports and rail logistics operator, off the stock exchange in a A$11.7 billion deal assembled with pension funds and sovereign wealth investors from Singapore, the United States and Spain. Shareholders approved the transaction on 16 June with 97.7% in favour, paying a 28% premium to where Qube shares traded before the bid was announced. Final court approval is expected in early July. The deal

Sonic Healthcare

Core

medium

Hold

Selling the Building, Keeping the Compounding Australian healthcare has been the worst sector on the local market over the past year, as former high-flyers like CSL and Cochlear were brutally punished after underwhelming updates in early 2026. Although Sonic Healthcare has outperformed the broader sector, this is little solace as the stock has fallen about 13% YTD and by 26% over the past twelve months. It is down about a third from its 52-week high, trading near multi-year lows, on a

Woodside Energy

Core

medium

Hold

Tightening Its Grip on Australia’s Largest Undeveloped Offshore Gas Field Woodside Energy (ASX: WDS) has moved to increase its stake in Browse, Australia’s largest undeveloped offshore gas field, paying US$225 million upfront for an additional 10.67% interest, with a further US$175 million payable only if the project receives a construction go-ahead by mid-2032. The deal deepens Woodside’s control over a resource that could supply gas to Asian markets for decades. Separately, the company firmly denied any takeover discussions with ExxonMobil, removing

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