This article was originally published on LivewireMarkets.com on January 31st, 2025

Last year saw markets rally strongly, powered primarily by growth stocks. Aside from some volatility earlier this week, that bullish trend has continued this year, with growth stocks again leading the way.

As most of you would know, every year we conduct a survey as part of our Outlook Series, where we ask a host of questions, including “What is your favourite growth stock?”

This year, nearly 5000 of you shared your thoughts with us across the Livewire and Market Index platforms, and in this first episode of Buy Hold Sell for the new season, you’re in for a real treat.

We’re going to run the ruler over five of your most-tipped growth stocks. To do that, Livewire’s Hans Lee is joined by Joe McCarthy from Elston and David Wilson from First Sentier Investors.

For good measure, our guests each bring along a stock they think has great growth prospects in 2025, despite not ranking in the top five of your most-tipped stocks.

Note: This episode was recorded on Wednesday 30 January 2024. You can watch the video, listen to the podcast or read an edited transcript below.

Edited transcript

Hans Lee: Hello and welcome to the first episode of the 2025 season of Livewire’s Buy Hold Sell. I’m Hans Lee and it’s great to have you with us. Now, as most of you would know, we conduct a survey every year as part of our Outlook Series. We ask you a host of questions, one of which is, what is your favourite growth stock?

Well, this year, nearly 5,000 of you shared your thoughts with us across the Livewire and Market Index platforms. And today, we are going to run the ruler over the top five vote getters. Plus, we’ll also ask our panelists for a stock that isn’t on the list but should be. To do that, I am very pleased to welcome Joe McCarthy from Elston and David Wilson from First Sentier.

CSL Limited (ASX: CSL)

Hans Lee: We’ve got a lot to cover. Let’s get stuck in. First up, we are discussing CSL. CSL was voted number one by the Livewire and Market Index readers. Of course, a multinational biotech company, one of the great Australian success stories. David, to you first up, is it a buy, hold or sell?

David Wilson (HOLD): For us, it’s a hold. It’s been a great success story, but the Vifor acquisition really set them back. They spent basically $18 billion and have not got an adequate return. So they’ve still got a great blood products business, but they really need to establish that earnings momentum that’s been missing in the last couple of years.

Hans Lee: Joe, CSL down more than 7% over the past year, underperformed the ASX by almost 20% over the same period. Is it due a turnaround? Is it a buy, hold or sell?

Joe McCarthy (BUY): It’s a buy for us, but I also understand what David’s saying because the Vifor acquisition was quite disappointing and a misstep by management. But, as we stand here today and we look at the valuation and the growth prospects that is priced in, it’s materially lower than what it was before COVID. Now, we look at the business, and we’re talking about the core plasma therapeutics business in Behring. The industry is actually not that different in terms of what’s there and in terms of how the industry’s performing. And they had a tough period during COVID where that was disrupted but they’re now getting back to a good operating rhythm of growth. We actually think that business is definitely going in the right direction now, and we can see that with the most recent industry data.

Pro Medicus (ASX: PME)

Hans Lee: Okay. Next up, we’re going to stay in the healthcare space and talk about Dr. Sam Hupert’s company, and Anthony Hall’s company for that matter, and that’s Pro Medicus. Safe to say, this one’s reached market darling status. PME, in case you don’t know, develops and supplies healthcare imaging software, radiology information system software, and services to hospitals and other institutions. Joe, is it a buy, hold or sell for you?

Joe McCarthy (HOLD): It’s a hold for me, potentially even becoming a sell. And the reason for that is not because of the offering, because undoubtedly it’s the best offering in the market and I think they’ll continue to gain market share. Where I think we’re different is that the extent of the market share gains factored into the share price are just excessive. The reason for that is not everyone’s going to go for the highest priced offering regardless of the value behind it. We look at some of the other offerings that are coming to market now, they’re at a lower price point, they’ve got similar speed, and the same functionality. We also think that, internationally, because they do need to expand globally to justify their price, it gets even harder because the radiologists get paid less over there. So the productivity benefit is worthless to the hospital.

Hans Lee: Okay. All right. Thank you very much. David, unlike CSL, Pro Medicus has gone the other way, up 170% in the last year. Is it sustainable though? Is it a buy, hold or sell?

David Wilson (BUY): For us it’s a buy, and just like CSL, it’s a great Australian success story. We continue to think that the market underestimates the earnings and the addressable market available to the company. It continues to penetrate the US market. It continues to upsell its product into the US hospital market as well. So for us, it’s definitely a buy.

BHP Group (ASX: BHP)

Hans Lee: All right, and I’m going to stay with you, David, and it wouldn’t be a growth episode of Buy Hold Sell if we didn’t talk about the Big Australian, BHP. Buy, hold or sell for you, sir?

David Wilson (BUY): For us, it’s a buy. Just – but it’s a buy. I think you’ve got quality assets. The valuation’s not particularly demanding. They sit right at the low end of the iron ore and coking coal cost curve. So great business and great cash generation. So for us, it’s a buy.

Hans Lee: Joe, BHP down around 15% over the past year. I think we all know the reasons why, mainly around that slowing China’s economy. But what do you make of it? Is it a buy, hold or sell?

Joe McCarthy (HOLD): It’s a hold but I’m probably similar to David where it’s on the edge of buy and hold. At the end of the day it is mainly an iron ore business, and we look at the iron ore market and where that’s going over the next year, you’ve got a large mine coming on in Guinea in Africa. It has significant Chinese backing. In the past, when we’ve seen this in the bauxite market where, again in Guinea, large high-grade resources were brought online that had Chinese backing. It led to oversupply of the market and it did lead to a very long period of subdued prices there. We think that’s going to constrain profitability and potentially their ability to invest.

WiseTech Global (ASX: WTC)

Hans Lee: All right, next up we have quite a spicy one, to say the least. It is one of Australia’s best growth stories over the past decade, but it has not been without its volatility or its headlines. Joe, the company is WiseTech. Is it a buy, hold or sell for you?

Joe McCarthy (SELL): It’s a sell for me, and similar to Pro Medicus, it’s a great business. You can’t doubt they’re offering and they’ve done a great job, but the growth drivers of the business are changing. So historically, the business’ primary driver of growth, has been new customer acquisition. But now, it’s moving to expansion into new modules and increased pricing for existing customers. We think this comes with execution risk. On top of that, the saga that has ensued over the last year would’ve been incredibly distracting and would not have helped the execution side of things.

Hans Lee: All right, thanks Joe. David, despite all those headlines that I mentioned, still delivered a 65% return over the past 12 months for shareholders. Is it a buy, hold or sell for you?

David Wilson (BUY): Despite all those headlines, Hans, we actually think the stock’s a buy. In effect, they’re the Microsoft Excel of freight forwarding. They’ve got 14 of the top 25 contracts in place with the freight forwarders globally. They’ve gained contracts with Nippon Express and Sino Express, which gives them access to the Japanese and the Chinese markets as well. We think the growth is still very much in place. The revenues are going to grow at 25 to 30%. So for us, it’s still a buy.

Woodside Energy (ASX: WDS)

Hans Lee: Last but not least, this is an interesting one actually. Woodside Energy, another commodity related name, but it has struggled over the past 12 months, down around 20%. David, let’s start this round with you. Is it a buy, hold or sell?

David Wilson (SELL): Hans, for us, it’s a sell. We thought those acquisitions, whilst they made sense when they were announced back in August, we thought that they actually told you something. They told you that it’s going to be hard for them to grow in Australia and therefore they’re going to have to accept a lower rate of return by expanding into the North American market. So for us, a sell.

Hans Lee: Okay. Joe, you get to bring us home. Is Woodside due for a bounce or is it more of the same? Buy, hold or sell?

Joe McCarthy (BUY): It’s a buy but it’s a hard one because this stock has no mates. But, you look at the business and they’ve done the acquisitions which people didn’t like, and the concerns about the balance sheet. We’ve done the modelling on the balance sheet and we can see that, despite a sustained period of low oil prices, they will be able to fund their CAPEX requirements. In addition to that, some of the assets they’ve actually got in Australia, like Browse and Sunrise, are progressing. Contrary to the perceived challenges they do have, they actually are making headway to becoming viable projects.

Guest picks

Hans Lee: Okay, interesting. All right, well, aside from discussing your top picks, we wanted to get David and Joe’s thoughts on a top growth stock for 2025. While these could have received a nomination from you, they didn’t make the top five. So really, we want to find out if these should have been higher on the list. Joe, what have you got for us?

Car Group (ASX: CAR)

Joe McCarthy: So I’ve got Car Sales and what we really like about this one is the recent acquisitions they’ve done with the businesses in the US and Brazil. They continue to increase the monetisation of those businesses. What we think the market misses is that there’s just so much more to go with that. In addition, you’ve got the core Australian business, which has been forgotten about. But one thing that’s been missed is the rate of innovation within that business has increased very significantly in the last five years. They’re genuinely creating a lot of value, not only for the customers but also for the shareholders there.

Hans Lee: Okay. Car Group for you. David, what do you say?

Goodman Group (ASX: GMG)

David Wilson: Well, firstly we agree with Joe on Car Group. We think it’s probably in the best five managed businesses in the country. The management team is first class. They’ve done a fantastic job and they’ve set the business up well. So we agree with Joe on that.

For us, the stock is Goodman Group. Despite some of the press recently around data centres, Goodman Group is going to continue to generate double-digit EPS growth. It’s got a great management team and they’ve got great properties set in stone. They continue to grow globally as well. They’re well positioned across Australia, Europe, North America, and Asia. It’s a great business, great management team, great balance sheet and high return on capital. So for us, it’s Goodman Group.

Hans Lee: Okay, thank you very much. That’s all we’ve got time for today. My thanks to David and to Joe, we hope you enjoyed that episode of Buy Hold Sell. If you did, you can subscribe to the Livewire Markets website as well as our YouTube channel, and why not give this video a like as well. Till we see you next, thanks for watching.

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