Buy Hold Sell: 5 of your most-tipped stocks for 2024 (and 2 that should have made the list)

Welcome back to Buy Hold Sell for 2024! And what a start to the year it's been...

This week, the S&P/ASX 200 hit a new all-time high, buoyed by investors' expectations for rate cuts over the year ahead. This is all thanks to inflation starting to ease, and recessionary fears finally starting to fall. But in a world of goldilocks thinking en masse, is the outlook for markets really as rosy as we think? 

With this in mind, we can think of no better time to analyse Livewire and Market Index readers' top-tipped stocks for 2024. Think out-of-love stocks like CSL Limited (ASX: CSL) and Pilbara Minerals (ASX: PLS), defensive stalwarts like BHP Group (ASX: BHP) and Macquarie (ASX: MQG), and growth darling WiseTech Global (ASX: WTC). 

In this episode, Livewire's Ally Selby was joined by T. Rowe Price's Randal Jenneke and Tribeca's Jun Bei Liu for their analysis of these very stocks. 

Plus, for a little bit of fun, we asked our guests to name their highest conviction large-cap stock pick for the year ahead - a stock that didn't make readers' list for 2024 but probably should have. 

Note: This episode was filmed on 31 January 2024. You can watch the episode, listen to a podcast, or read an edited transcript below. 

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Edited Transcript 

Ally Selby: Hey, how are you doing? And welcome to the first episode of Buy Hold Sell for 2024. I'm Ally Selby, and today we'll be running the ruler over five of your most tipped stocks for the year ahead. To that, we're joined by Randal Jenneke from T. Rowe Price and Jun Bei Liu from Tribeca. Plus, we've also asked our guests to bring along one stock they believe should've made your list instead. 

Let's get straight into it. First up, and there's no surprise here, it's CSL. It consistently ranks as the number one stock every year we do this survey. Jun Bei, I might start with you. Is CSL a buy, hold, or sell?

CSL (ASX: CSL)

Jun Bei Liu (BUY): CSL is a buy, and it's because it's going to grow double-digits for the next few years, and it's only just recovering from the disruptions caused by COVID. And the tailwind is quite enormous for this business.

Ally Selby: It's rebounded around 30% over the last few months. It's trading at around $300 once again. Randal, over to you. Is it a buy, hold, or sell?

Randal Jenneke (BUY): I also think it's a buy. It obviously struggled last year, but it's re-based its earnings. And we're going to get margin improvements through 2024 and 2025. So strong earnings growth, margins improving. It's in the unloved basket of the marketplace, so I think it's going to do well.

Pilbara Minerals (ASX: PLS) 

Ally Selby: Okay. We'll talk about another unloved darling now, it's Pilbara Minerals. It came in at number two on your most-tipped stocks list for 2024. Its share price has fallen around 26%, though, over the last 12 months. Staying with you, Randal. Is it a buy, hold, or sell?

Randal Jenneke (BUY): I think it's a buy. I think the weakness we're seeing is now overdone. We've seen 80% plus falls in the lithium price. We think that's going to base out. We're seeing supply now being taken out of the marketplace. We know we're going to get incredibly strong demand going forward coming from electrification. There's a bit of a slowdown in EV growth from, call it 30% to 20%, but that's still very strong. So for us, it's a buy.

Ally Selby: Okay. Randal is seeing value in lithium. Are you as well? Is Pilbara a buy, hold, or sell?

Jun Bei Liu (BUY): Pilbara is a buy. The way we see it, it seems like the price has bottomed. And at the same time, it's got an incredibly strong balance sheet and it's had a very low cost of production. Even at current low lithium prices, it's still making money, making it one of the strongest.

WiseTech Global (ASX: WTC)

Ally Selby: Next up we have WiseTech Global. It's seen its share price soar around 20% over the last 12 months. Staying with you, is it a buy, hold, or sell?

Jun Bei Liu (BUY/HOLD): WiseTech is probably a structural long for me - a buy over the long term. But into this result, I'm more of a hold because we're just not sure at the moment with the Red Sea disruption, whether it'll cause logistic issues or volume issues. And this share price can move quite a bit on result day. But for me, if it sells off, it's a buy.

Ally Selby: Okay. Over to you, Randal. Is WiseTech a buy, hold, or sell?

Randal Jenneke (BUY): I think it's a buy. It's one of the few companies in Australia that's got genuinely the best product globally. And so you're seeing the big freight forwarders like Kuehne+Nagel, DHL and FedEx buy WiseTech products. Yes, there might be a short-term slowdown, perhaps, but I think the real story is the market share gain, the penetration gain that it's going to get. And it's really entrenching itself to be the dominant player globally.

BHP Group (ASX: BHP)

Ally Selby: Next up we have the big Australian, BHP. It came in at number four on your top-tipped list. Randal, staying with you, is it a buy, hold, or sell?

Randal Jenneke (HOLD): I think BHP is a hold just because it had a pretty decent 2023. Iron ore prices are close to 12-month highs. They've benefited from that, but I think the environment this year is a bit more mixed going forward, so that's why I think it's a hold.

Ally Selby: Over to you, Jun Bei. Is BHP a buy, hold, or sell?

Jun Bei Liu (HOLD): We don't mean to all sound the same, but it's also a hold for me. I think the dividend is still going to be very strong, and earnings for the past year are still pretty good. With China coming back, [there could] potentially [be some benefit] for other commodities that it has in the complex, but iron ore has hit its high. So for me, over the next 12 months, earnings are looking flat-ish. It's a hold.

Macquarie Group (ASX: MQG)

Ally Selby: Okay. Next up we have Macquarie Group. Its share price is flat over the last 12 months, but it has rebounded around 19% over the last three. Is it a buy, hold, or sell?

Jun Bei Liu (BUY): For me, Macquarie is a buy. People are trying to time the short-term, whether energy prices, oil prices, and volatility drive earnings upgrades or downgrades. My view is that you buy this for the long term. It's heavily invested in renewables. It has launched a lot of funds in Europe and the US. It is probably the only company that you can actually get exposure to that thematic here in Australia.

Ally Selby: It's definitely been a perpetual favourite with our readers. Over to you, Randal. Is it a buy, hold, or sell?

Randal Jenneke (SELL): I think for 2024 it's a sell because it's got some earnings challenges which I think are bigger than people think. They've made a lot of money out of the energy trading business in the last few years. It got to be more than half of their profit. I think that's going to be really hard to even get close to those numbers for some time. Also, capital markets have dried up. Asset realisations have fallen and they've got a bloated cost structure. So to me, 2024 is the year they need to re-base their earnings and address the cost structure, and that's why I don't think it's going to outperform, and it's a sell.

Ally Selby: Well, that will ruffle some feathers. Okay, we asked you to bring along your top large-cap stock for 2024, one that didn't make our list. What have you brought along for us?

Aristocrat Leisure (ASX: ALL) 

Randal Jenneke (BUY): I think Aristocrat is a buy. It's the global market leader in electronic gaming. You can see the incredibly strong game performance that it's got. It's winning market share. It's investing $800 million in new product design every year. That's more than double its closest competitor. In fact, it's probably as big as the entire industry put together. That gives it a huge advantage in being able to maintain its game momentum and its game performance, and that's translating into really strong market share gains and strong earnings growth. It's got a great balance sheet, it's undertaking a buyback, and it's trading at a multiple that's only 17 times 12 months forward. So it's cheap, has strong earnings growth, and is a dominant global player. So for us, it's a buy.

Ally Selby: Okay. Over to you, Jun Bei. What's your top large-cap pick for 2024?

The Lottery Corporation (ASX: TLC)

Jun Bei Liu (BUY): It's The Lottery Corp. Now, this is an infrastructure-like stock. It sells lottery tickets and it normally grows with population growth plus 1% or 2% in terms of pricing. And then they get a bit of efficiency and generate good growth. It is very, very defensive. 

Now, over the last 12 months, this company's been treated a bit like a cyclical industrial company because the lottery run wasn't great. It was very unfortunate for them. They haven't had big lottery prizes. Because when you have big prizes, people tend to buy a lot of tickets. So they have been cycling very strong lottery runs in the previous couple of years. Last year was a re-basing year, so its share price fell something like between 20% to 30% on the basis that the lottery didn't look great for the 12 months that they were in.

At the same time, other infrastructure stocks all re-rated significantly because of interest rate expectations falling. Now, heading into this year, they have just started cycling some of the weaker comps into February. And if anyone's into the lottery, this Thursday we've got the $200 million - one of the largest Powerballs. So that has already driven a significant increase in ticket purchases. For me, it's a core holding in a portfolio, at a time when the share price has underperformed because of those short-term issues.

Ally Selby: There was a line out the door downstairs for tickets.

Jun Bei Liu: Absolutely. I need to go buy them.

Ally Selby: There was a little bit of a theme there with those top large-cap picks for 2024. I hope you enjoyed that episode as much as I did. If you did, why not give it a like? Remember to subscribe to our YouTube channel. We're adding so much great content just like this every single week.