Top High Conviction Buys for November: 5 Stocks with Strong Medium-to-Long-Term Upside Potential

We are enhancing our content scheduling and communication efforts to help you make the most of our high-performing Growth and Income recommendations. Moving forward, we will be transitioning from the monthly High Conviction Buys to a weekly release schedule, ensuring you receive timely recommendations to add to your watchlist. This week, we’re highlighting five exceptional stocks that have demonstrated strong performance year-to-date, even amid a challenging macro environment. These stocks show promising medium to long-term upside potential, ranging from 10% to 18%. GQG Partners (ASX: GQG) – 18% Upside Potential and Solid Projected 7.8% Dividend Yield In the first half of 2024, we observed a 46.5% increase in average FUM, reaching $139.5 billion, supported by net inflows of USD 11.1 billion. By August 31, 2024, FUM had grown further to USD 160.8 billion. If this trend stabilizes, we believe it will continue to drive robust earnings growth. The company’s 53.7% surge in distributable earnings and 46.3% rise in dividends per share demonstrate its capability to translate this growth into shareholder value. With a projected 7.8% dividend yield for FY25, we see GQG as offering an attractive passive income stream while maintaining sufficient capital for future expansion. Accordingly, we have set a primary target price at $3.30 per share, representing an 18% upside potential. Joyce Corporation Ltd (ASX: JYC) – 46% Year-to-Date Growth with 12.5% Upside Potential Joyce Corporation Limited (ASX: JYC) is one of our high conviction buys as the company continues to exhibit solid business model and excellent fundamentals. Joyce’s portfolio centres on well-established Australian businesses with promising organic growth potential, particularly through its core operations in KWB and Bedshed. These companies have consistently held their ground as dependable suppliers of kitchen, wardrobe, and bedroom furniture solutions. Despite a tough economic climate with high interest rates and inflation, Joyce has delivered steady performance. Group revenue of $145.5 million and sustained EBIT margins reflect KWB’s resilience and the strength in Bedshed’s franchising operations. While the company-owned Bedshed stores faced transitional costs with new openings and refurbishments, we anticipate these investments will contribute to stronger performance in FY25, supporting Joyce’s growth trajectory. Our analysis highlights Joyce’s disciplined approach to shareholder returns, demonstrated by a full-year dividend of 28.5 cents per share. With a strong net cash position of $39.1 million, Joyce remains financially well-positioned, reinforcing our confidence in its capacity to balance reinvestment and consistent dividends. Based on our valuation, we have set a target price of $5.00 per share, reflecting an upside potential of 12.5%. Nickel Industries Ltd (ASX: NIC) – 33% Year-to-Date Growth with 29% Upside Potential Nickel Industries Limited (ASX: NIC) is positioned as a compelling investment in the nickel sector, benefiting from its status as a low-cost NPI producer and its expansion into EV-related products through high-pressure acid leach (HPAL) projects. NIC’s extensive operations in Indonesia, particularly at the Indonesia Morowali and Weda Bay Industrial Parks and the Hengjaya Mine, provide a foundation for stability and growth. These sites bolster NIC’s strategic shift toward class 1 nickel products, which are essential for EV batteries, positioning the company to capitalize on the expanding EV supply chain. Record ore output from the Hengjaya Mine and robust EBITDA reflect NIC’s integrated mining and smelting model, mitigating supply risks and supporting sustainable cash flow. From a valuation perspective, NIC exhibits substantial upside potential. We have set a primary target price at over $1.09 per share, reflecting anticipated revenue growth from both NPI and high-value nickel products and expected self-sufficiency from the Sampala Project, projected to supply ore by late 2025. NIC’s diversification across class 1 and class 2 nickel also positions it to capture demand in both the stainless steel and EV markets. Our technical analysis suggests further upside, with a secondary target at over $1.20 per share, supported by NIC’s expansion projects and anticipated contributions from its HPAL interests. The company’s commitment to ESG principles, alongside experienced leadership, supports its standing as a responsible and strategic choice for exposure to the growing nickel and EV sectors. Orica Ltd (ASX: ORI) – 12% Year-to-Date Growth with +18% Upside Potential We have high conviction in Orica Limited (ASX: ORI) as a strong investment opportunity, driven by robust earnings growth and strategic acquisitions. In 1H24, Orica delivered a significant increase in Statutory Net Profit After Tax (NPAT) to $337.5 million, fueled by strong customer demand and increased earnings from high-margin products. The company’s core blasting business, along with its expanding Digital Solutions segment, has shown solid performance across all divisions. The strategic acquisitions of Terra Insights and Cyanco further enhance Orica’s market position. Terra Insights establishes the company as a global leader in geotechnical and structural monitoring, while Cyanco expands Orica’s presence in the high-margin North American gold market. These acquisitions are expected to contribute to continued growth in the second half of FY2024. Looking ahead, we anticipate strong demand in the mining and infrastructure sectors will drive Orica’s performance, supported by its focus on improving operating cash flow and return on net assets (RONA). The company’s commitment to operational excellence and sustainable performance gives us confidence in its outlook. Based on our valuation and technical analysis, we have set a primary target price of $21 per share. We believe Orica presents a compelling investment opportunity, with strong growth prospects and upside potential. Graincorp Ltd (ASX: GNC) – 26% Year-to-Date Growth with Over 10% Upside Potential GrainCorp Limited (ASX: GNC), a key player in the integrated grain and edible oils business, continues to demonstrate resilience and strong growth potential. With its expansive market presence across East Coast Australia (ECA) in grain storage and handling, and as a leading edible oil processor and oilseed crusher in Australia and New Zealand, the company is well-positioned for future growth, driven by the robust global demand for agricultural products. Despite the moderation in market conditions in 1H24, which saw lower production and more challenging margins, GrainCorp’s performance remains impressive. The company has maintained a strong core cash position of $495 million and has made significant strides in reducing net debt, providing a solid foundation for future growth. Additionally, the company’s ability to implement operational efficiencies, such as advanced analytics in its nutrition and energy segments, has helped mitigate the impact of market pressures. Looking ahead, GrainCorp is primed for a strong rebound. The agriculture sector’s long-term fundamentals remain positive, and GrainCorp’s diversified portfolio, which includes growth opportunities in Animal Nutrition, Agri-energy, and bulk materials handling, positions the company for success. The promising outlook for the 2024/25 winter crop, bolstered by favourable weather conditions and healthy soil moisture, further strengthens the company’s growth prospects. In light of these factors, we have a high conviction buy recommendation for GrainCorp with a primary target price of $10.00 per share. Given the company’s strong fundamentals, strategic initiatives, and positive outlook, we see additional upside potential, extending our secondary target to $10.90 per share. GrainCorp’s integrated supply chain and expanding platform in nutrition and energy make it a compelling long-term investment, and we remain highly optimistic about its growth trajectory.