6 ASX stocks to buy before volatility strikes again (and 3 to sell)

US equities may be pushing to fresh highs as markets breathe a sigh of relief over cooling Middle East tensions, but make no mistake: this conflict will leave lasting scars on the global economy.

Even if the ceasefire holds, higher oil, freight and insurance costs have already fed through to the real economy. And with Donald Trump never far from a fresh tariff threat, trade broadside or policy pivot, investors are again operating in a market where visibility can disappear overnight.

Mark Elzayed, Chief Investment Officer at Investor Pulse, says we are now in an environment where “macro visibility is limited” - a dangerous backdrop for listed companies trying to forecast revenues, input costs and demand while energy prices remain volatile and geopolitical risk remains elevated.

And if there is one lesson investors took from the August 2025 and February 2026 reporting seasons, it is this: if companies fail to meet or exceed expectations, the market is prepared to punish them brutally.

“We are operating in a market that is becoming far less forgiving," says Elzayed.

Where Trump’s unpredictability hits hardest

Michael Carmody, Executive Director of Investments at Centennial Asset Management agrees, warning that higher energy prices are creating a fresh layer of margin pressure for ASX-listed companies that lack pricing power.

“The implications for operating margins and profitability are key company risks, particularly for those corporates with limited pricing power and elevated input cost exposure,” he says.

He adds that with inflation likely to remain above the RBA’s 2–3% target band, the risk of further rate increases through 2026 remains real.

In that backdrop, traditional rate-sensitive sectors such as property trusts, retail and consumer lenders may continue to lag. Accordingly, he's sold three stocks from the portfolio:

• Mirvac (ASX: MGR), one of Australia's largest property developers and investors.
• Stockland (ASX: SGP), which builds masterplanned communities, town centres and logistics facilities.
• Cedar Woods Properties (ASX: CWP), known for its house and land packages across key states.

The case for cashflow resilience

So where should investors hide - or better yet, compound?

For both Elzayed and Carmody, the prized trait in the current environment is resilient cashflow.

"This is no longer a market where broad exposure alone is enough. Investors need businesses that can protect capital, defend margins and continue delivering through inflation shocks, tariff noise and geopolitical surprises," Elzayed says.

For Carmody, that means traditional investment fundamentals such as balance sheet strength, earnings growth and a demonstrated ability to convert profits into free cash flow matter more than ever.

“Investors always return to these valuation benchmarks in difficult and uncertain markets,” he says.

Traditionally, defensive cashflow models are associated with take-or-pay contracts, regulated margins and predictable returns. Utilities, energy infrastructure and healthcare naturally fit that mould.

With this in mind, both Elzayed and Carmody have nominated their top ASX ideas across large and small caps — each approaching resilience from a different defensive lens.

Elzayed’s top resilient cashflow businesses

For Elzayed, the sweet spot is companies with long-term agreements, subscription-style revenue or regulated pricing frameworks.

"Inflation remains a defining feature of the current market, and we are focused on owning businesses that can manage it effectively," he says.

Telstra (ASX: TLS)

Elzayed describes Australia’s largest telco as “the digital fortress of the South Pacific.”

It is effectively the backbone of the nation’s digital economy, with utility-like earnings streams that remain relatively insulated from oil-driven inflation shocks.

If anything, prolonged instability in energy markets may strengthen the case for remote work and digital connectivity, reinforcing demand for Telstra’s network assets.

He also points to a strong 1H26 result, with enough surplus cash generation to both lift the interim dividend and support an ongoing buyback.

“In our view, this is a business that is not only resilient but actively returning capital while maintaining balance sheet strength.”

From a technical lens, Elzayed says the stock is tracing a classic “staircase accumulation” pattern, with higher lows on the weekly chart suggesting institutions are consistently buying dips.

APA Group (ASX: APA)

Elzayed sees APA as Australia’s premier energy infrastructure play rather than a conventional commodity exposure.

Its pipeline network behaves more like a toll road, with revenues underpinned by long-term, inflation-linked contracts that sit largely independent of underlying commodity price swings.

That makes it especially compelling in an oil shock.

“Domestic gas infrastructure becomes strategically critical, positioning APA as a key enabler of energy security. This gives the business a distinctly defensive quality.”

He notes APA’s free cash flow yield remains attractive at roughly 9.4%, while the growth pipeline has expanded from $2.1 billion to $3 billion.

With an additional $1 billion in funding capacity recently unlocked, he believes the early stages of a rerating may already be underway.

Medibank Private (ASX: MPL)

Australia’s largest private health insurer offers a naturally defensive profile anchored in the essential nature of healthcare.

Health insurance remains one of the last household expenses consumers are willing to cut, while the regulated premium-setting framework helps offset medical cost inflation.

Elzayed also likes the diversification coming from the Medibank Health segment, which now contributes 13% of earnings and is less tied to broader economic cycles.

He highlights first-half profit growth of 6% to $381.7 million, matched by a similar lift in the dividend while retaining nearly $400 million in excess capital.

"Buying interest around key support levels has been consistent, and the absence of sharp drawdowns during broader market weakness reinforces its low beta characteristics. For us, it remains a high conviction defensive holding," he says.

Carmody’s top small-cap resilience plays

Carmody’s lens is slightly different.

Rather than traditional defensives, Centennial is finding resilience in contracted capex growth - businesses leveraged to mining services, engineering and data centre build outs.

These companies may not look defensive on the surface, but their revenue visibility is increasingly underpinned by long-duration project pipelines.

SKS Technologies (ASX: SKS)

SKS provides electrical contracting for large-scale and complex projects including data centres, hospitals and commercial properties.

“It has grown profitability from $1 million in FY23 to $14 million in FY25,” Carmody notes.

At the 1H FY26 result, management reiterated revenue guidance of $340 million and a pre-tax margin of 10%, implying a further step change to roughly $24 million in profit this year.

Importantly, work on hand continues to grow as the data centre pipeline expands.

“We expect ongoing project wins within the data sector construction segment to add to the order book in 2027.”

GenusPlus Group (ASX: GNP)

GenusPlus is a specialist infrastructure and services provider spanning energy, communications and rail.

The business has already grown strongly over the last three years, and Carmody believes that momentum is set to accelerate following the accretive acquisition of Railtrain Holdings.

At the recent 1H FY26 result, management reiterated full-year guidance and expects EBITDA growth of 35%.

“We believe the strength of GNP’s earnings growth over the medium term remains under-appreciated by investors.”

Southern Cross Electrical Engineering (ASX: SXE)

Southern Cross Electrical Engineering is a national provider of specialised electrical, instrumentation, communications and maintenance services.

The company recently delivered a strong 1H FY26 result, with underlying EBITDA growth of 30%.

As a bonus, management upgraded guidance by eight percentage points and flagged ongoing opportunities for order book growth in data centres.

“Specifically, management identified $1 billion in further data centre work to be awarded during 2026. We believe SXE is well-positioned to win a significant share of this new work,” Carmody says.

The broader data centre and electrical services pipeline remains robust, supporting further earnings growth and margin expansion.

Focus on resilience, not the noise

Over the last 18 months, investors have had to contend with tariffs, AI overspending fears, inflation shocks and now Iran-driven energy volatility.

But while these storms come and go, a focus on resilient cashflows may offer investors something far more valuable than a macro forecast: confidence in the underlying durability of the businesses they own.

Share prices may still swing wildly, but when demand remains essential and cash generation is largely insulated from exogenous shocks, investors give themselves a far better chance of compounding through the noise.