Hub24, GenusPlus, SRG & More: Top Stocks Driving Our Portfolio Growth

Today, we’re reviewing our portfolio. We’ve built three model portfolios: one focused on growth, another on income, and a third specializing in mining, commodities, and energy stocks. Despite a broad market correction, our portfolios continue to outperform the ASX 200, delivering a combined return of 11.55% over the past twelve months. Source: (1) Investor Pulse – Aggregated Portfolio Performance (growth/income/mining) (2025) Deep Dive into Our Best-Performing Stocks and Key Portfolio Highlights Hub24 Ltd (ASX: HUB) remains our strongest performer, up 64.4% over the past year. SHAPE Australia Corp Ltd (ASX: SHA), added this year, has already gained 12.9% while offering a fully franked dividend yield of 5.88%. GenusPlus Group (ASX: GNP) has surged over 68%, making it another standout. SRG Global Ltd (ASX: SRG) has delivered nearly 50% and remains a solid income play with a fully franked dividend yield of 4.19%. Review of Our Most Profitable Trades and Market Movements Over the Past Year Over the past year, we’ve also made several lucrative trades that have significantly contributed to our portfolio performance. ALS Ltd (ASX: ALQ) delivered returns of 80.81%, while Aristocrat Leisure Ltd (ASX: ALL) provided returns of 75.80%. Breville Group Ltd (ASX: BRG) saw a return of 59.11%, and BlueScope Steel Ltd (ASX: BSL) returned 23.07%. JB Hi-Fi Ltd (ASX: JBH) has been a standout performer, delivering an impressive return of 112.03%. Analysing Current Market Conditions and Identifying Opportunities Amidst Economic Uncertainty We’re navigating a volatile equity market influenced by global trade tensions, domestic economic shifts, and changing investor sentiment. The ASX 200 has been choppy, with financial and energy stocks under pressure, while gold miners have benefited from rising prices. The Reserve Bank of Australia’s recent rate cut—and the potential for further easing—has provided a boost to sentiment, though concerns around trade disruptions and economic growth persist. Strategic Portfolio Adjustments and Outlook for the Remainder of the Year Despite the uncertainty, we see opportunities ahead, particularly in the latter half of the year. We’re positioning our portfolio with a mix of defensive plays such as gold and consumer staples while selectively adding quality growth stocks that stand to benefit from a more accommodative policy. At the same time, we remain cautious on trade-sensitive sectors until there’s more clarity on the global outlook. Here are some of our latest trades and stock recommendations, let’s break them down and explore the opportunities we see in this market. Ricegrowers Ltd (ASX: SGLLV) – Up +56% TTM We continue to hold a long-term “buy” recommendation on Ricegrowers Limited (ASX: SGLLV), better known as The SunRice Group, because of its solid business model and strong market position. SGLLV’s diverse operations, spanning Rice Pool, International Rice, Rice Food, Riviana Foods, CopRice, and Corporate, give it a real edge, allowing it to thrive in both essential food markets and premium product categories. The company has been able to balance volume-driven growth with margin expansion, thanks to its strong supply chain and well-known brands. Strong First-Half FY25 Performance Reflects Solid Growth and Operational Efficiency SGLLV delivered a strong first-half FY25 performance, maintaining steady revenue at $912 million and growing EBITDA to $67.9 million. Its net profit after tax (NPAT) increased 5% year-over-year, driven by better product mix, manufacturing efficiencies, and cost-saving initiatives. Despite facing macroeconomic headwinds, SGLLV has continued to execute well, showing resilience even in a challenging environment. Strategic Acquisitions Strengthen SGLLV’s Market Position and Open New Growth Opportunities SGLLV’s recent acquisitions, including SavourLife and Simply Delish, are further strengthening its portfolio. SavourLife positions the company in the growing premium pet food market, which offers strong consumer demand and higher margins. Simply Delish, on the other hand, expands SGLLV’s presence in the chilled food sector, which continues to grow rapidly. These acquisitions align with SGLLV’s strategy to diversify beyond rice and into higher-margin categories that offer solid growth potential. Volume Growth and Operational Resilience Amid Global Rice Supply Challenges and Currency Pressures One of SGLLV’s key strengths is its ability to drive volume growth. The company has capitalized on strong U.S. rice supply to increase exports and has seen success in markets like Papua New Guinea. Additionally, its Rice Flour, Rice Cakes, and Toscano bakery goods have performed well. However, global rice supply issues and currency fluctuations, such as the depreciation of the PNG Kina, have caused some revenue pressures. Despite this, SGLLV’s disciplined pricing strategies and cost efficiencies have helped mitigate these challenges. Focused on Sustaining Growth Through Strong Branded Products and Operational Efficiencies Looking ahead, SGLLV is focused on maintaining growth through strong branded product sales and disciplined cost management. The company is also making significant progress in sustainability, with plans to reduce emissions and improve supply chain resilience. The upcoming deregulation of the New South Wales rice market in 2025 is a key development that SGLLV is actively managing to ensure stable supply. A Resilient Business Model and Strategic Initiatives Bolstering SGLLV’s Long-Term Outlook We’re maintaining our “buy” rating on SGLLV due to its resilient performance and strong fundamentals. The company’s ability to improve profitability through cost control, operational efficiencies, and smart growth initiatives has been impressive. We believe SGLLV is currently undervalued, with strong upside potential. The Company’s Diversified Portfolio Provides Stability in an Ever-Changing Market Environment While there are ongoing challenges, such as competition and global supply pressures, SGLLV has consistently shown that it can adapt and thrive. The company’s diversified business model gives it stability, with growth in segments like pet food and specialty foods helping offset challenges in rice markets. SGLLV’s ability to manage these risks and continue delivering results makes it a solid long-term investment. Looking ahead to FY25 and beyond, SGLLV expects stable revenue growth and moderate EBITDA growth. The company is focused on increasing profitability through cost control, operational efficiencies, and stronger branded product sales. Despite ongoing challenges, SGLLV’s management has shown it can handle these risks effectively. We’re confident in SGLLV’s long-term potential. Its diversified portfolio, strong management, and focus on sustainability position it for continued growth. With a fair value of $14.7 per share, the stock offers attractive upside potential. Given its market position, growth strategy, and solid performance, we’re sticking with our “buy” recommendation, confident that SGLLV is a great long-term investment. Capral Ltd (ASX: CAA) – Up +7.53% TTM – Dividend Yield: 4% We like Capral Limited (ASX: CAA) for the long term and are maintaining our “Buy” rating. As the Australian leader in aluminium manufacturing and distribution, Capral’s diverse operations have shown their strength, surpassing earnings expectations and maintaining a solid balance sheet despite a challenging FY24. The company’s ability to navigate the housing market slowdown while still returning capital to shareholders highlights its operational resilience. Solid Performance in FY24 Despite the Challenges, Demonstrating Resilience in a Tough Market Capral’s FY24 earnings showed resilience despite a 5% drop in volume, reaching 67,800 tonnes compared to 71,100 tonnes in FY23. The slowdown in the residential market, which makes up around 40% of Capral’s volume, was largely driven by high interest rates. However, Capral still managed to exceed expectations with a favourable sales mix and strong performance in the industrial and commercial sectors, particularly in transport and infrastructure. Its 2019 operational restructure lowered costs and optimized plant capacity, helping the company maintain profitability. EBITDA for FY24 was $58.3 million, down from $61.5 million in FY23, but still strong given the volume decline. What to Expect in FY25: Stability in Earnings and Optimism for Market Recovery Looking ahead, we expect Capral’s earnings to stay steady in FY25. Residential construction is likely to pick up in the second half of the year, while industrial demand remains strong. Capral’s investments in plant upgrades, such as at the Smithfield and Penrith sites, should boost productivity and ensure it remains competitive. We anticipate these upgrades to help drive growth in future years, supporting both volume and margin improvements. We also expect stable earnings growth driven by ongoing demand in key industrial sectors like transport and infrastructure. Capital Management and Shareholder Focus: Creating Value through Buybacks and Dividends Capral continues to prioritize capital management, delivering value through a combination of share buybacks and dividends. In FY24, the company returned 76 cents per share to shareholders, including 36 cents through its share buyback program. This focus on shareholder returns is set to continue in FY25, with further buybacks planned. Capral’s balance sheet remains robust, with a net cash position of $68.9 million as of FY24, up from the previous year. This gives the company flexibility for strategic acquisitions and continued investments in growth. Why Now’s a Good Time to Buy: Attractive Valuation After Market Pullback Following the recent market pullback, Capral’s stock is trading at an attractive valuation. Our target price of $12.65 per share is based on a combination of valuation models, including the Dividend Stable Growth Model, Multi-stage Dividend Discount Model, and DCF analysis. We’ve applied a discount rate in the range of 12% to 13%, with a terminal EBITDA multiple ranging from 2.2x to 4.2x, which reflects Capral’s steady growth prospects. We expect revenue growth of 3.3% to 13.1% over the next five years, driven by continued demand from key sectors and a recovery in the residential construction market. Capral’s strong performance in FY24, solid balance sheet, and strategic investments make it an attractive long-term investment. We’re maintaining our “Buy” rating with a target price of $12.65 per share, confident that Capral’s operational efficiency, market position, and disciplined capital management will continue to generate value for shareholders. Despite market volatility, Capral is well-positioned to thrive and deliver strong, sustainable returns. Newmont Corporation CDI (ASX: NEM) – Up +44% TTM We see Newmont (ASX: NEM) as a “Buy” for now due to its solid fundamentals, strategic growth plans, and disciplined capital management. The company is well-positioned to thrive in the gold sector, backed by its leadership in production, strong cash flow generation, and future growth initiatives. Leading the Gold Industry with a Diversified Production Base Newmont stands out as the world’s largest gold producer, with 6.8 million ounces of gold produced in 2024, in addition to 1.9 million gold-equivalent ounces from copper, silver, lead, and zinc. The company’s diversified portfolio of Tier 1 mines across stable regions globally strengthens its operational foundation. The acquisition of Newcrest in 2024 has added copper exposure, helping to optimize its asset mix. Newmont’s ongoing asset sales, expected to raise up to $4.3 billion, will further streamline operations, increase financial flexibility, and allow the company to focus on its most profitable projects. Strong Cash Flow and a Solid Balance Sheet to Support Future Growth Newmont has consistently proven its ability to generate significant cash flow, with $6.3 billion in operating cash flow in 2024 and $2.9 billion in free cash flow. The fourth-quarter performance alone was impressive, generating $1.6 billion in free cash flow. The company ended the year with $3.6 billion in cash and $7.7 billion in total liquidity, which gives it flexibility to reinvest in growth opportunities. Additionally, Newmont’s efforts to reduce debt, cutting $1.4 billion in 2024, have strengthened its financial position, allowing it to focus on growth initiatives while maintaining a healthy balance sheet. Returning Value to Shareholders with Strategic Capital Management Newmont continues to prioritize returning value to its shareholders. In 2024, the company repurchased $1.2 billion of its shares as part of its $3 billion buyback program and paid out $1.1 billion in dividends. These actions demonstrate Newmont’s commitment to providing consistent returns to its shareholders while ensuring it remains financially flexible for future growth. Through targeted asset sales and a disciplined capital allocation strategy, the company is focused on maximizing long-term value for investors. Growth Prospects: Exciting Expansion Projects on the Horizon Looking ahead, Newmont is set to produce 5.9 million ounces of gold in 2025, with stronger production expected in the second half of the year. The company’s cost structure remains well-managed, with all-in sustaining costs (AISC) for its Tier 1 portfolio projected at $1,620 per ounce. In terms of capital expenditures, Newmont has allocated $1.8 billion for sustaining capital and $1.3 billion for development projects, which will help drive future growth. Several key expansion projects are set to boost production and reduce costs. The Tanami Expansion 2 project in Australia, expected to add 150,000–200,000 ounces per year between 2028 and 2032, will extend the mine life beyond 2040. In Ghana, the Ahafo North project, expected to begin production in late 2025, will contribute 275,000–325,000 ounces annually. The Cadia Panel Cave 2-3 project in Australia, set to ramp up through 2034, will add 5.9 million ounces of gold and 1.3 million tonnes of copper to Newmont’s production profile. Exploration Initiatives and Resource Growth: Building a Stronger Future Newmont is also committed to growing its resource base through aggressive exploration. The company has set its sights on adding up to 10 million new ounces of gold reserves, with a significant focus on Nevada. The planned $525 million investment in exploration and development in 2025 will help the company expand its resource base and extend the life of its mines. These efforts will ensure Newmont continues to have a strong production pipeline in the years to come. Financial Strength and Capital Discipline Provide Flexibility for Future Moves Newmont’s financial discipline is one of its key strengths. The company’s net debt to adjusted EBITDA ratio stands at just 0.6x, which means it has plenty of room to navigate market fluctuations and continue investing in growth. With a focus on capital discipline, Newmont has effectively reduced its debt and enhanced its ability to reinvest in key growth projects while maintaining shareholder returns. This financial flexibility will be essential as the company moves forward with its expansion plans. Valuation and Outlook: Newmont Stands Strong in the Gold Sector With its vast resource base, disciplined capital management, and promising growth prospects, Newmont presents an attractive investment opportunity. The company’s focus on high-quality assets, along with its commitment to shareholder returns and future growth, makes it a compelling choice for long-term investors. Given the favourable outlook for gold prices and Newmont’s strong track record of delivering value, we remain confident in its ability to continue generating consistent returns. That said, Newmont is a solid “Buy” for now, driven by its leadership in the gold industry, strong cash flow, disciplined capital management, and exciting growth prospects. The company’s ability to generate cash, reduce debt, and invest in key expansion projects positions it well for long-term success. With a strong foundation and promising future growth, we believe Newmont will continue to thrive and deliver consistent value to its shareholders. 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