According to a report by Vanguard published on January 24, Australia’s economy is expected to experience a gradual recovery in 2025, following its slowest growth in 32 years in 2024. The report forecasts an economic growth of 2% year over year by the end of 2025, with trimmed mean inflation, a core measure that excludes items at the extremes, expected to reach 2.5% year over year. However, the report notes that low productivity growth and higher unit labor costs will keep core inflation from falling sustainably to the midpoint of the Reserve Bank of Australia’s (RBA) 2%–3% target range until later in 2025.
The RBA has left its policy rate target unchanged at 4.35% since December 10, but has softened its language around future policy decisions, noting that it is “gaining some confidence that inflation is moving sustainably toward the target.” Despite this, Vanguard expects the RBA to remain patient and not initiate rate cuts until the second quarter of 2025, due to a tight labor market.
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In an interview on January 19, Lochlan Halloway, Market Strategist at Morningstar Australia, pointed out that the premium to fair value of large-cap stocks in the Australian market is abnormally high, trading at around 20% above fair value. According to Halloway, this is a concern as 20 companies account for about 60% of the ASX 100.
In terms of value opportunities, Halloway identified the energy sector, particularly companies that are trading at significant discounts to their fair value. He also noted that small-cap companies, which were largely left behind in the market rally may offer value, although investors need to be judicious in selecting quality companies. Additionally, sectors such as consumer defensives appear close to fair value or even cheap.
As the Australian economy gradually recovers in 2025, opportunities lie in undervalued sectors such as energy and consumer defensives, as well as among small-cap companies that have yet to catch up with the broader market rally. With that in context, let’s take a look at the 10 best Australian stocks to buy now.
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Our Methodology
To compile our list of the 10 best Australian stocks to buy now, we used Finviz and Yahoo stock screeners to identify Australian companies. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Australian Stocks to Buy Now
10. Kazia Therapeutics Limited (NASDAQ:KZIA)
Number of Hedge Fund Holdings: 1
Kazia Therapeutics Limited (NASDAQ:KZIA) is an Australian biotech company dedicated to the development of innovative treatments for various types of cancer, with a particular emphasis on brain cancer. The company partners with research organizations and aims to bring novel cancer treatments to market for healthcare providers and patients.
Kazia Therapeutics Limited’s (NASDAQ:KZIA) lead candidate, paxalisib, has shown promising results in clinical trials for glioblastoma, a type of brain cancer. The company has recently received feedback from the US FDA regarding its lead candidate, paxalisib, which has implications for the company’s future development plans. Although the FDA has indicated that the data from the GBM-AGILE study will not support accelerated approval for paxalisib, the company is exploring alternative paths forward. The FDA has suggested that the overall survival data from the study could be used to support traditional or standard approval, and Kazia Therapeutics Limited (NASDAQ:KZIA) is working to design a pivotal registrational study for the drug. This study will be crucial in determining the future of paxalisib and the company’s prospects for growth.
In addition to its work on paxalisib, Kazia Therapeutics Limited (NASDAQ:KZIA) is also exploring new opportunities for growth through strategic partnerships and licensing agreements. The company recently entered into an agreement with QIMR Berghofer Medical Research Institute and granted it an exclusive license to certain intellectual property rights related to combination therapies consisting of inhibitor drugs and immunotherapy. This agreement has the potential to expand Kazia Therapeutics Limited’s (NASDAQ:KZIA) pipeline and create new opportunities for the company to develop innovative treatments.
9. Immutep Limited (NASDAQ:IMMP)
Number of Hedge Fund Holdings: 2
Immutep Limited (NASDAQ:IMMP) is a biotechnology company at the forefront of developing novel immunotherapies for the treatment of various cancers and autoimmune disorders. The company is pioneering the use of LAG-3 (Lymphocyte-Activating Gene 3) protein-based therapies, with a primary focus on its lead candidate, eftilagimod alpha (efti). Immutep Limited (NASDAQ:IMMP) collaborates with pharmaceutical companies and research institutions worldwide.
Immutep Limited (NASDAQ:IMMP) is focusing on the treatment of non-small cell lung cancer (NSCLC), a prevalent and aggressive form of cancer. The company has made substantial progress with its phase 1 INSIGHT-003 study, which evaluated the combination of efti, KEYTRUDA, and chemotherapy in first-line metastatic non-squamous (NSCLC) patients. The results have been highly promising and were observed across all PD-L1 expression levels. This success has paved the way for the initiation of the phase 3 TACTI-004 study, which aims to further validate these findings and potentially establish efti as a new standard of care for NSCLC patients.
Beyond NSCLC, Immutep Limited (NASDAQ:IMMP) is exploring the potential of efti in treating other cancers and autoimmune disorders. The company has already demonstrated positive results in a phase 2b TACTI-003 study, where efti in combination with KEYTRUDA was used to treat first-line recurrent or metastatic head and neck squamous cell carcinoma (HNSCC). Additionally, Immutep Limited (NASDAQ:IMMP) is investigating the use of efti in the neoadjuvant setting for resectable soft tissue sarcoma (STS), where it has shown the ability to achieve three-fold higher levels of hyalinization/fibrosis compared to historical radiotherapy controls.
8. Mesoblast Limited (NASDAQ:MESO)
Number of Hedge Fund Holdings: 3
Mesoblast Limited (NASDAQ:MESO) is a leading biotechnology company specializing in the development and commercialization of cell therapies for serious and life-threatening inflammatory and degenerative diseases. The company’s flagship product, Remestemcel-L (Ryoncil), recently received FDA approval for treating steroid-refractory acute graft-versus-host disease (SR-aGVHD) in patients aged two months and older.
With the FDA approval of Remestemcel-L, Mesoblast Limited (NASDAQ:MESO) is poised to enter a critical phase of commercialization. The company has been actively preparing for this launch by hiring a dedicated commercial team, engaging with key opinion leaders in the medical community, and establishing relationships with bone marrow transplant centers. These efforts are aimed at ensuring a rapid and effective market penetration.
Mesoblast Limited (NASDAQ:MESO) is also focusing on educating healthcare providers about the benefits and appropriate use of Remestemcel-L, which is expected to be a key factor in driving adoption. The company is leveraging its existing infrastructure and partnerships to facilitate a smooth rollout, with the goal of capturing a significant share of the SR-aGVHD market, which is estimated to have a substantial total addressable market (TAM).
Furthermore, Mesoblast Limited (NASDAQ:MESO) is actively expanding the therapeutic applications of Remestemcel-L. The company is currently conducting a phase 3 study in adult patients with SR-aGVHD, which is expected to commence shortly after the pediatric approval. Additionally, Remestemcel-L is being evaluated for its potential to treat inflammatory bowel disease (IBD), a condition that affects millions of people worldwide.
7. Opthea Limited (NASDAQ:OPT)
Number of Hedge Fund Holdings: 3
Opthea Limited (NASDAQ:OPT) is a biotechnology company specializing in ophthalmology, developing treatments for eye diseases such as wet age-related macular degeneration (AMD) and diabetic macular edema. The company works with ophthalmologists and healthcare organizations.
Opthea Limited’s (NASDAQ:OPT) lead candidate, sozinibercept, is a biologic designed to inhibit VEGF-C and VEGF-D, complementing the action of VEGF-A inhibitors. The company is conducting two pivotal Phase 3 studies, COAST and ShORe, which aim to evaluate the efficacy and safety of sozinibercept in combination with existing VEGF-A inhibitors, Eylea and Lucentis, respectively. These studies have enrolled nearly 2,000 treatment-naïve wet AMD patients across over 300 global sites. Topline results from the COAST and ShORe study are expected in mid-2025.
While the wet AMD market is highly competitive, with established therapies such as Eylea, Vabysmo, and Lucentis dominating, Opthea Limited (NASDAQ:OPT) is positioning sozinibercept as a complementary therapy that can enhance the efficacy of current treatments. The company’s strategy hinges on demonstrating that the additional benefit of targeting VEGF-C and VEGF-D can lead to better visual outcomes and improved patient quality of life.
6. Tamboran Resources Corporation (NYSE:TBN)
Number of Hedge Fund Holdings: 4
Tamboran Resources Corporation (NYSE:TBN) is an early-stage, growth-driven independent natural gas exploration and production company headquartered in Sydney, Australia. The company is primarily focused on developing unconventional natural gas resources in the Beetaloo Basin, located in the Northern Territory of Australia.
Tamboran Resources Corporation (NYSE:TBN) is focusing on developing its natural gas resources in the Beetaloo Basin and is integrating advanced U.S. drilling and completion technologies. The company believes that these techniques will enable it to achieve natural gas production that complies with Australia’s stringent greenhouse gas (GHG) regulations, which aim for net zero carbon emissions by 2050. Tamboran Resources Corporation (NYSE:TBN) plans to reach net zero equity Scope 1 and 2 GHG emissions once commercial production begins.
Tamboran Resources Corporation (NYSE:TBN) holds significant exploration permits (EPs) covering around 4.7 million contiguous gross acres in the Beetaloo Basin, making it the leading acreage holder and operator in the region.
5. Australian Oilseeds Holdings Limited (NASDAQ:COOT)
Number of Hedge Fund Holdings: 4
Australian Oilseeds Holdings Limited (NASDAQ:COOT) is an Australian company specializing in the production and export of oilseed crops, including canola and sunflower seeds. The company’s operations are geared toward meeting global demand for plant-based oils and serves food manufacturers, biofuel producers, and agricultural markets. Australian Oilseeds Holdings Limited (NASDAQ:COOT) has established itself as a trusted source of premium oils, both in Australia and internationally.
To accelerate its growth and expand its market presence, Australian Oilseeds Holdings Limited (NASDAQ:COOT) has entered into a strategic partnership with Shanghai Maiwei Trading Co., Ltd. This partnership is a significant step in bringing the brand’s premium range of Australian cold-pressed, non-GMO canola and olive oils to Chinese consumers. Shanghai Maiwei, with its extensive market presence and deep regional expertise, will oversee all branding activities in China by leveraging teams in Shanghai, Shenzhen, and Hebei. The Shenzhen team, known for its e-commerce prowess, will lead online promotions and offline collaborations with supermarkets and private channels, ensuring a comprehensive market approach.
Australian Oilseeds (NASDAQ:COOT) is also expanding its operations to the United States. Through Good Earth Oils, the company will distribute its Australian cold-pressed non-GMO canola oil and olive oil to retailers and wholesalers across the U.S. This strategic move is expected to open new markets and increase the company’s global footprint. Furthermore, Australian Oilseeds (NASDAQ:COOT) is investing in renewable energy initiatives, such as solar and biodiesel, to power its operations and reduce its carbon footprint.
4. Woodside Energy Group Ltd (NYSE:WDS)
Number of Hedge Fund Holdings: 8
Woodside Energy Group Ltd (NYSE:WDS), formerly known as Woodside Petroleum Ltd, is a leading energy company headquartered in Perth, Australia, with operations spanning the Asia Pacific, Africa, the Americas, and Europe. The company specializes in the exploration, development, production, and marketing of hydrocarbons, including liquefied natural gas (LNG), pipeline gas, crude oil, condensate, and natural gas liquids. Woodside Energy Group Ltd (NYSE:WDS) holds significant interests in major projects such as Pluto LNG, North West Shelf, Wheatstone, and Scarborough, among others.
Woodside Energy Group Ltd’s (NYSE:WDS) growth strategy has seen a significant milestone with the Louisiana LNG project, a major liquefied natural gas export facility located on the U.S. Gulf Coast. Following a $1.2 billion acquisition of Tellurian, Woodside Energy Group Ltd (NYSE:WDS) now holds full ownership of this project, which boasts a potential production capacity of 27.6 million metric tons per year (MTPA). Woodside Energy Group Ltd (NYSE:WDS) is now targeting a final investment decision (FID) for the Louisiana LNG project by the end of Q1 2025. If approved, construction is slated to begin soon after, with production expected to commence in 2028.
To progress the project, Woodside Energy Group Ltd (NYSE:WDS) has entered into a revised engineering, procurement, and construction (EPC) contract with Bechtel, a globally renowned engineering firm. The contract focuses on the foundational development of the project’s three production trains, with an estimated forward cost ranging from $900 to $960 per ton of LNG.
3. Vast Renewables Limited (NASDAQ:VSTE)
Number of Hedge Fund Holdings: 11
Vast Renewables Limited (NASDAQ:VSTE) specializes in developing renewable energy infrastructure. The company specializes in concentrated solar thermal power (CSP) systems that produce electricity and industrial process heat. Vast Renewables Limited (NASDAQ:VSTE) works with governments, utilities, and industrial clients worldwide.
Vast Renewables Limited (NASDAQ:VSTE) is actively expanding into the United States. The company recently signed a development services agreement with GGS Energy to pursue a commercial-scale synthetic fuels project in the southwestern U.S., known as Project Bravo. This project marks Vast Renewables Limited’s (NASDAQ:VSTE) first deployment in the U.S. and is a strategic move to leverage its CSP technology to power a co-located refinery that will produce green methanol and sustainable aviation fuel (SAF). By deploying its proven CSP technology in the U.S., the company aims to establish a strong foothold in the North American market and contribute to the region’s green energy transition.
Furthermore, Vast Renewables Limited (NASDAQ:VSTE) is building a 30 MW solar project with eight hours of storage, known as Vast Solar 1 (VS1), located in the Port Augusta Green Energy Hub in South Australia. This construction of VS1 is expected to begin in Q2, with capital expenditures estimated in the range of $227 million to $246 million. To support this initiative, Vast Renewables Limited (NASDAQ:VSTE) has secured an updated funding agreement, which allows the company to access a grant from the Australian Renewable Energy Agency (ARENA).
2. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holdings: 22
BHP Group Limited (NYSE:BHP) is a global resources company that extracts and processes commodities such as iron ore, copper, and coal. The company has a strong portfolio of assets and supplies raw materials essential for global infrastructure and energy needs to industrial manufacturers and governments.
BHP Group Limited (NYSE:BHP) is actively pursuing growth opportunities in the copper market, which is expected to experience significant demand growth over the coming decades. In South Australia, BHP Group Limited (NYSE:BHP) is expanding its Olympic Dam operation, with plans to increase production to over 500,000 tons per year by the early 2030s. The company is also progressing a number of other copper projects in Chile, including the Escondida mine, where it is planning to invest in new leaching technology to increase production and extend the life of the mine. Additionally, BHP Group Limited (NYSE:BHP) has recently announced a joint venture with Lundin Mining to develop the Filo del Sol and Josemaria copper projects in Argentina and Chile, which have the potential to become major new copper producers.
Another key area of growth for BHP Group Limited (NYSE:BHP) is its potash business, where the company is investing in the Jansen project in Canada. The Jansen project is a world-class potash asset that is expected to become one of the largest potash producers in the world. BHP Group Limited (NYSE:BHP) is currently constructing the first stage of the project, which is expected to produce around 4.3 million tons of potash per year. The company is also planning to expand the project in future stages, with the potential to increase production to over 16 million tons per year.
1. IREN Limited (NASDAQ:IREN)
Number of Hedge Fund Holdings: 28
IREN Limited (NASDAQ:IREN) is a Bitcoin mining and data center company that has established itself as a major player in the cryptocurrency and high-performance computing (HPC) sectors. The company has rapidly expanded its operations by focusing on large-scale projects and organic growth.
IREN Limited (NASDAQ:IREN) is aggressively scaling its Bitcoin mining operations to solidify its position as one of the largest listed miners. The company has a current capacity of around 31 exahash and plans to expand to 50 exahash by the first half of 2025. This rapid growth is driven by a disciplined approach to project management, a focus on cost efficiency, and the ability to execute large-scale projects with minimal execution risk.
In addition to its core Bitcoin mining business, IREN Limited (NASDAQ:IREN) is diversifying into the rapidly growing AI and HPC markets. The company has already installed nearly 2,000 GPUs, including both NVIDIA H100 and H200 models, at its Prince George data center. The company is actively contracting out this capacity and is focused on measured growth based on robust contractual arrangements and market demand. IREN Limited (NASDAQ:IREN) is also exploring opportunities in AI colocation and other monetization strategies by leveraging its high-quality assets and strategic locations in power-constrained markets. The company has also committed to installing liquid cooling infrastructure at both its Prince George and Childress sites to support the next generation of GPUs to further enhance its competitive advantage.
While we acknowledge the potential of IREN Limited (NASDAQ:IREN) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IREN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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