High-Conviction Buys for April: Smart Moves for a Shaky Market

Even with all the uncertainty around US tariffs shaking up the market, our portfolios here at Investor Pulse, covering growth, income, and mining, are still consistently beating the broader ASX. We've built this success on a really focused strategy for each portfolio. For growth, we're all about finding strong local players in tech, healthcare, and some consumer areas. Our income portfolio is geared towards solid blue-chip companies, infrastructure, utilities, and good REITs that give us reliable dividends. And in mining, we're keeping a close eye on essential commodities and efficient operators, making smart moves based on global demand. The reason we're outperforming is down to how carefully we pick our stocks in each portfolio. For growth, we look for companies that are really innovating and driven by what's happening here at home. Our income strategy is about finding companies that are consistently profitable and committed to giving back to their shareholders. And when it comes to mining, we focus on companies that are efficient and smart about the commodities they're dealing with, so they can weather any storms. This focused approach means each part of our portfolio is set up to grab opportunities and handle the current economic ups and downs. Ultimately, our success at Investor Pulse comes down to some key principles we stick to. We do our homework, we think long-term, and we believe in spreading our investments around. Plus, we're always actively managing our portfolios, so we can make changes as the economy shifts. This way, we make sure our portfolios stay in a good position to keep outperforming the market, even with all the challenges from those US tariffs and global uncertainty. Let’s take a look at our latest high conviction buys for April, which exhibit strong growth potential moving forward. Northern Star’s (ASX: NST) Strong Share Price Performance Reinforces Our Conviction Amidst a Backdrop of Global Economic Uncertainty Since our recommendation earlier this year, Northern Star (ASX: NST) has appreciated by more than 38%, demonstrating the strength of our conviction in a period marked by global macroeconomic instability. As investors seek refuge from persistent inflation, shifting interest rate expectations, and geopolitical tensions, we believe NST stands out as a high-quality, gold-leveraged name that offers both downside protection and upside potential. The stock’s ability to outperform during volatile conditions speaks to its quality asset base and consistent operational execution, characteristics we view as essential in today’s market landscape. Record Cash Flow and Consistent Operational Delivery Underscore the Strength of NST’s Asset Portfolio and Management Execution Northern Star continues to deliver excellent operating results, underpinned by strong production across all core assets including KCGM, Yandal, and Pogo. In the first half of FY25, the company generated $72 million in free cash flow and posted record net mine cash flow, with further improvement expected in the second half as high-grade ore from KCGM ramps up. Notably, NST remains on track to meet FY25 production and cost guidance and is simultaneously advancing major growth initiatives like the KCGM Mill Expansion and the proposed acquisition of De Grey Mining. These projects are expected to unlock significant long-term value without compromising the company’s current cash-generating capacity. Balance Sheet Strength, Fully Funded Growth, and Share Buybacks Reflect a Disciplined and Shareholder-Focused Approach to Capital Management A defining feature of Northern Star’s investment case is its capital discipline, which remains front and centre despite the company’s aggressive growth plans. With $265 million in net cash and over $1.2 billion in total liquidity including bullion, the company is funding its strategic initiatives entirely through internal cash flows. Its ongoing on-market share buyback, through which 24.8 million shares have already been repurchased, reflects management’s confidence in long-term value creation. This combination of financial strength and shareholder returns is increasingly rare in the sector and supports our view that NST is a structurally advantaged operator. In a World of Heightened Volatility and Risk, Northern Star Offers a Compelling Blend of Gold Exposure, Operational Stability, and Long-Term Growth Potential As gold continues to serve as a reliable hedge against economic and geopolitical risks, Northern Star provides one of the highest-quality exposures to the commodity on the ASX. Its tier-1 assets, low-cost production base, and scalable growth pipeline position it well to capitalize on elevated gold prices, while its track record of execution adds further confidence. With over 38% share price appreciation since our initial recommendation and a clear path to further growth, we believe NST remains an excellent stock for investors looking to balance risk and reward in today’s uncertain environment. We maintain our buy rating. [CLICK HERE TO ACCESS NST’s FULL RESEARCH REPORT] QBE’s (ASX: QBE) Transformation and Strategic Realignment Make It a Promising Investment Amid Macroeconomic Volatility QBE Insurance Group Ltd is one of our high-conviction long-term buy ideas, offering a rare combination of earnings resilience, capital strength, and strategic clarity in an environment clouded by U.S. tariff uncertainty and macroeconomic volatility. FY24 results were a clear turning point: strong profit growth, disciplined underwriting, and margin expansion have validated the company’s transformation over the past few years. The decision to exit the volatile North American middle-market segment was both timely and strategic, allowing QBE to double down on high-return, less cyclical areas like Specialty and Crop insurance. These segments are structurally insulated from trade frictions, positioning QBE as one of the few insurers actively reshaping its business to thrive through geopolitical turbulence. What makes QBE particularly compelling right now is the market’s underappreciation of its shift. Despite stronger fundamentals and a leaner, more focused portfolio, QBE still trades at a discount to peers and its own history—providing long-term investors with an attractive entry point. Concerns about U.S. exposure appear overstated. QBE’s U.S. operations are now concentrated in lines less sensitive to tariffs and cyclical downturns, while improved underwriting and portfolio discipline give it the flexibility to adapt faster than competitors. This isn’t just a stable business; it’s a business actively improving its risk-return profile while the rest of the market hesitates. Our valuation work supports this high-conviction view. On conservative assumptions, we derive a fair value of $23.70 per share, well above current levels, based on a combination of dividend discount, residual income, and peer multiple analysis. With a robust capital base, conservative investment profile, and growing dividend backed by rising profitability, QBE offers defensive strength with upside potential. In a market searching for safe havens amid trade tensions and economic uncertainty, we see QBE as a smart play, one that’s not just weathering volatility but building value through it. Reiterating “Buy” Rating on Newmont (ASX: NEM): Strong Earnings, Promising Growth, and Shareholder Returns Ahead We’re issuing our high conviction “Buy” rating on Newmont this April, and for good reason. The company’s leadership in the gold industry, strong financial position, and smart growth strategy make it a standout long-term investment. Newmont’s Strong Cash Flow and Shareholder Returns Provide Stability and Growth Newmont had a solid 2024, generating $6.3 billion in operating cash flow and $2.9 billion in free cash flow. This financial strength allowed the company to return $1.1 billion to shareholders through dividends, reinforcing its commitment to delivering value. With $3.6 billion in cash and $7.7 billion in total liquidity, Newmont has the flexibility to invest in expansion projects while maintaining strong capital returns. Industry Leadership and Expansion Projects Position Newmont for Long-Term Growth As the world’s largest gold producer, Newmont delivered 6.8 million ounces of gold in 2024, along with significant contributions from copper, silver, lead, and zinc. The 2024 Newcrest acquisition further strengthened its asset base, increasing its exposure to copper while refining its portfolio. Meanwhile, ongoing divestitures—expected to generate up to $4.3 billion—will help streamline operations and improve financial flexibility. Key expansion projects, such as Tanami Expansion 2 in Australia and Ahafo North in Ghana, are set to increase production and enhance long-term profitability. 2025 Outlook: Production Growth and Operational Efficiency Set to Drive Performance For 2025, we expect Newmont to produce approximately 5.9 million ounces of gold, with stronger volumes expected in the second half of the year. The company remains focused on cost management, with all-in sustaining costs (AISC) projected to remain competitive. Strategic investments in exploration and mine development will support sustained production growth while ensuring long-term operational efficiency. Valuation and Recommendation: Newmont Remains a Strong Long-Term Buy With a high-quality reserve base, disciplined capital management, and a clear focus on shareholder returns, we continue to view Newmont as a long-term buy. The company’s financial strength, coupled with its commitment to operational efficiency and strategic expansion, positions it well to generate consistent value for investors. [CLICK HERE TO ACCESS NEM’s FULL RESEARCH REPORT] Resilient Earnings, Industrial Demand, and Capital Discipline Support Capral’s (ASX: CAA) Long-Term “Buy” at $12.65 We are maintaining our long-term “Buy” rating for Capral Limited (ASX: CAA), a stock that has shown remarkable resilience and long-term growth potential, even in the face of challenging market conditions. Despite a tough FY24, Capral demonstrated operational strength, delivering a net profit of $32.5 million, a slight increase from $31.8 million in FY23. This performance was achieved despite a 5% drop in volume to 67,800 tonnes, primarily due to a slowdown in the residential construction market. Capral’s ability to exceed expectations in these difficult conditions highlights the company’s robust operational strategy, including the impact of its 2019 restructure, which significantly improved cost efficiencies. Stable Earnings Outlook for FY25 with a Rebound Expected in Residential Construction Looking ahead to FY25, we anticipate stable earnings for Capral, with potential upside as the residential construction market begins to recover in the second half of the year. Industrial and commercial demand is expected to remain strong, particularly in sectors like transport and infrastructure, where Capral has a solid presence. The company’s operational strategy, including investments in plant upgrades, should further enhance its efficiency, ensuring continued profitability despite external pressures. Capral’s commitment to operational excellence, particularly through its 2019 restructure, positions it well to maintain stability in a fluctuating market. Strong Capital Management and Strategic Acquisitions Support Long-Term Growth Capral’s approach to capital management is another key strength. The company maintains a net cash position of $68.9 million, a significant increase from previous years, which provides it with the flexibility to make strategic investments, including acquisitions and plant upgrades. Capral’s recent acquisition of Aluminium Trade Centres in Melbourne and Brisbane enhances its distribution network and strengthens its market position in the Australian aluminium sector. This acquisition, alongside ongoing share buybacks, reflects Capral’s commitment to delivering value to shareholders while positioning the company for long-term growth. Capral’s Strong Market Position and Commitment to Fair Trade Practices Ensure Industry Leadership Capral continues to lead the local industry through its proactive approach to fair trade. The company’s efforts to combat dumping practices in the aluminium market help ensure a level playing field for local manufacturers and protect the integrity of the Australian market. These initiatives, combined with Capral’s operational strength, further solidify its competitive position in the industry. By safeguarding against unfair import practices, Capral ensures a stable and sustainable market for its products, enhancing its long-term prospects. Attractive Valuation and Market Pullback Present a Strong Investment Opportunity From a valuation perspective, the recent market pullback has created an attractive entry point for investors. Capral’s stock is currently trading at a favourable valuation relative to its long-term growth potential. Based on multiple valuation models, including the Dividend Stable Growth Model, Multi-stage Dividend Discount Model, and Discounted Cash Flow (DCF) analysis, we maintain a target price of $12.65 per share. These models incorporate a 5-year to 10-year outlook, factoring in steady demand from key industrial sectors and a potential rebound in the residential construction market later in FY25. Continued Focus on Shareholder Returns Through Dividends and Capital Management Programs Capral’s ongoing commitment to delivering shareholder returns is demonstrated through its balanced approach to dividends and share buybacks. For FY24, Capral declared a final dividend of 40 cents per share, up from 35 cents per share in FY23. The company returned a total of 76 cents per share to shareholders, including 36 cents per share through its share buyback program. We expect Capral to continue to maintain or even increase its dividend payouts, supported by its strong cash position. This disciplined capital management strategy ensures that the company remains focused on creating long-term value for its shareholders. Strategic Investments and Future Growth Drivers Position Capral for Long-Term Success Capral is well-positioned for future growth, with a strategic focus on both organic expansion and acquisitions. The ongoing upgrades at its Smithfield and Penrith extrusion plants are expected to enhance production capacity, improve operational reliability, and increase market share in the aluminium sector. These investments, coupled with the recent acquisition of Aluminium Trade Centres, further expand Capral’s footprint in key Australian markets and position it for continued growth in the industrial sector. A High-Conviction Buy with Long-Term Growth Potential That said, Capral’s strong earnings performance, resilient market position, and strategic investments make it a high conviction buy. Despite challenges in FY24, the company’s ability to maintain profitability and exceed expectations showcases its operational strength and adaptability. With a healthy balance sheet, smart capital management, and an attractive valuation, we believe Capral is well-positioned for long-term growth. We remain confident that Capral will continue to deliver sustainable value for shareholders, and we are maintaining our long-term “Buy” rating with a target price of $12.65 per share. [CLICK HERE TO ACCESS CAA’s FULL RESEARCH REPORT] Ricegrowers Ltd (ASX: SGLLV) Remains a Long-Term “Buy” with Solid Growth, Strategic Acquisitions, and Promising Outlook We’re re-iterating our high conviction “buy” recommendation on Ricegrowers Limited (ASX: SGLLV), also known as The SunRice Group, based on its impressive performance in FY25 and solid business strategy. Despite some challenging market conditions, the company posted a 5% increase in net profit, reaching $67.9 million, with revenue of $912 million for the first half of FY25. This highlights SGLLV’s resilience and ability to perform well, even when faced with external pressures. Diversification into High-Margin Growth Areas Drives Resilience A key factor in SGLLV’s resilience is its ability to diversify into high-margin, high-growth areas. Recent acquisitions like SavourLife and Simply Delish have been particularly effective. SavourLife strengthens SGLLV’s position in the growing premium pet food market, while Simply Delish enhances its presence in the fast-expanding chilled food sector. These strategic acquisitions are aligned with SGLLV’s goal to move beyond its traditional rice products and capitalize on higher-margin categories, helping to drive overall margin expansion. Managing Market Pressures with Strong Cost Efficiencies Despite facing global rice pricing pressures and foreign exchange headwinds (such as the depreciation of the PNG Kina), SGLLV has maintained strong margins by focusing on operational efficiencies. In 1H FY25, the company achieved an EBITDA of $67.9 million, demonstrating solid margin growth in the face of these challenges. SGLLV’s disciplined approach to pricing and cost management has allowed it to adapt to changing market conditions and deliver profitability. Growth Focus: Branded Products, Operational Efficiencies, and Key Industry Changes Looking ahead, SGLLV remains focused on driving growth through branded product sales, operational efficiencies, and cost control. Additionally, the deregulation of the NSW rice market in 2025 presents a potential growth opportunity for SGLLV, and the company is taking proactive steps to ensure a stable supply chain in this transition. We are optimistic about the company’s ability to maintain profitability and capture new growth through these strategic moves. Attractive Valuation and Upside Potential Our valuation models indicate that SGLLV’s fair value is $14.7 per share, which is significantly higher than the current market price. This suggests considerable upside potential for investors. Given SGLLV’s strong fundamentals, strategic acquisitions, and focus on higher-margin products, we believe it’s well-positioned for long-term growth and profitability. We’re re-iterating our “buy” recommendation on SGLLV. The company’s diversified operations, solid execution, and growth strategy make it an attractive long-term pick. With a fair value that suggests upside potential and a strong track record of adapting to market challenges, we’re confident in SGLLV’s prospects for continued success. [CLICK HERE TO ACCESS SGLLV’s FULL RESEARCH REPORT]