Buy Hold Sell: 5 ASX financials (that aren't the banks!)

There’s more to ASX financials than the Big Four. Matt Williams (Airlie) and David Wilson (First Sentier) reveal where they're seeing value.
Buy Hold Sell

Livewire Markets

There has been a lot of focus on the banks over the past 12 months, and fair enough. Commonwealth Bank (CBA) has traded more like a growth stock, and its unexpected trajectory has warped not only its valuation but those of its peers. 

Whilst debate about the reasons for CBA's rally rages on, investors might do well to remember that the ASX financials sector comprises more than just the Big Four - hard to believe, we know. 

With that in mind, we've brought in the big guns to run the ruler over the other parts of the financial sector, including insurers and platform businesses. Joining host Chris Conway are Airlie Funds Management's Matt Williams and First Sentier Investors' David Wilson

Together, they talk about the opportunities beyond the banks, run the ruler over three other key financial stocks, and each share an ASX name they particularly like in the space. 

Oh, and just because we couldn't help ourselves, they also share whether any of the Big Four look appealing right now. 

Please note this episode was filmed on 30 July 2025.

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Edited Transcript

Chris Conway: Hello and welcome to Livewire’s Buy, Hold, Sell. My name is Chris Conway. The big banks have been getting a lot of attention over the last 12 months, but there's more than just the big four in the ASX financial sector. So to understand some of the other opportunities available to investors, I'm joined by Matt Williams from Airlie Funds Management and David Wilson from First Sentier investors. Gents, welcome to Buy, Hold, Sell.

Matt Williams: Thanks, Chris.

David Wilson: Thank you.

So, what of the banks?

Chris Conway: Before we get to some other parts of the sector, it would be remiss not to just have a brief conversation briefly about the banks. David, I'll come to you first. Are any of them of interest to you at the moment?

David Wilson: Well, at the moment, Chris, we actually like NAB. We think that the valuation is undemanding. They continue to improve the ROE. It's been a long-term fix, but we think the management's done a good job. They continue to improve the proprietary component of their mortgage flow. So yeah, we actually like NAB.

Chris Conway: Yep. Matt, what about you? Any interest in the banks?

Matt Williams: Yeah, look, we own NAB too, but I think the conditions remain really tough. The headwinds are there, as we know. It's super competitive. Margins are under pressure, costs are going up and we've got three banks with three new management teams, and I think that's difficult for those banks as they transition these new CEOs. They don't look super attractive to me, at all, at the moment.

Opportunity beyond the banks

Chris Conway: Matt, what do you like in the financial sector at the moment and why?

Matt Williams: I think a couple of the insurers are interesting. Some of the FinTechs would be interesting if their valuations weren't so rich, but we're always on the hunt for a good FinTech. And the platform space is interesting. We're seeing a bid for Insignia. AMP's there… we don't own it, but that's still got a reasonable platform business. So those things are of interest to us.

Chris Conway: Yep. David, anything to add there in terms of what you don't mind at the moment?

David Wilson: Yeah, I agree with Matt on the insurers. We think they've got good balance sheets. Their premium growth is pretty strong. So they're actually in a pretty good place, all three of them. And then on the FinTech side, the platform businesses, despite the valuation run-up, we still like them because we think they can continue to take market share, and we think there's a long runway of growth for them. So the platform stocks, particularly Netwealth, we like.

Chris Conway: Yeah, we'll get to one of those in the next segment, which is Buy, Hold, Sell. So we're going to run the ruler over some stocks. We'll start with Macquarie Group. So recently it had a first strike against executive pay. The stock fell 5% on the day. David, buy, hold, or sell for you?

Macquarie Group (ASX: MQG)

David Wilson (HOLD): For us, it's a hold. The ROE is stuck at around 11% to 12%. It had a couple of good years in ‘21 and ‘22, but it's actually disappointed for really the last two years from an earnings point of view. So yeah, we're just a hold on Macquarie.

Chris Conway: Yep. Matt, it is up just over 4% in 12 months. So it hasn't set the world on fire. Buy, hold, or sell for you?

Matt Williams (BUY): It's in the portfolio, so it's a buy for us. And look, it is in a lull, as David mentioned, and it's got a bit of regulatory pressure on it as well. I think both of these things will pass over time. The attractiveness of Macquarie's breadth of business and its base of business around the world, in geographies that it has, I just think it has to grow. It will pick up its growth at some point. You look at the valuation versus, say, a Westpac. Westpac's on 17 times PE. Macquarie's on 19 times. When we're sitting here in three to five years, who's going to have the best of it? I think Macquarie Group will.

Suncorp Group (ASX: SUN)

Chris Conway: Next up, we're going to talk Suncorp Group - an insurance and banking provider. Matt, I'll stay with you. Buy, hold, or sell?

Matt Williams (HOLD): Look, I'll have to say hold, Chris. It's not in the portfolio. Sold out way too early in hindsight. I think Steve Johnston has done a great job there. Selling the bank to ANZ was good. They're holding share. They're doing some smart things around the business. 17 times PE. It's not overly expensive but it's not overly exciting either.

Chris Conway: Yep. David, has had a pretty good 12 months, Suncorp has, up 19% over the period. Has it got more in it? Buy, hold, or sell?

David Wilson (BUY): Chris, we actually think the stock's still a buy. I agree with Matt. Steve Johnston's done a great job there, and they're now in a position where they haven't got the bank, and that chewed up a lot of management time. And so they're now in a position where they can actually grow that business. They've got a strong market share in both the home and motor business, but also they've got the ability to grow margins and grow their presence in their commercial book as well. So we still think, at 17 times, there's still plenty of growth. It compares pretty well versus the banks. So we actually think this stock's a buy.

Hub24 (ASX: HUB)

Chris Conway: Next up, we're going to talk about one of the platform businesses that the gents were mentioning earlier. It will be Hub24, been getting a lot of fund flows. David, I'll stay with you? Buy, hold, or sell?

David Wilson (BUY): For us, Chris, it's a buy. We think that Andrew Alcock's done an excellent job over a long period of time. They continue to grow FUA (funds under administration) at $14-15 billion per annum. EPS is probably going to grow high teens. They continue to take market share, and there's really a long runway of growth for them and for Netwealth (ASX: NWL) as well. So for us, very much a buy.

Chris Conway: Yep. Matt, this one has been absolutely flying, up 60% over the last 12 months. So I guess the question begs, has it got more juice? Buy, hold, or sell for you?

Matt Williams (HOLD): Look, it's a hold for me. The stock is in our Airlie Small Companies Fund, which is run by Will Granger, and he's enjoyed that performance. But for me, the valuation excludes it. It has won great market share and let's say, breaking down the numbers, if it does that again over the next four years, so doubles its market share, and you extrapolate those numbers out, in 2029, it's still on a PE over 40 times.

Chris Conway: Right.

Matt Williams: And to us that's just not attractive enough for me.

Chris Conway: Yeah, makes sense. All right, my favourite part of Buy, Hold, Sell, I've asked the gents to bring along one of their favourite stocks, a non-bank financial that they think will perform well over the next 12 months. Matt, staying with you, what's your pick for us?

Medibank Private (ASX: MPL)

Matt Williams: It's Medibank Private. And look, it's had a great 12 months already. It's up around 30% including the dividend. It's in the portfolio, but just to be totally transparent, we have trimmed a little of the position. It's been a big position for us, but I still think the setup looks fairly attractive. You're getting decent policyholder growth. Claims have been very manageable and expected to be that way.

I think the big wrinkle in the whole story is that the hospital operators themselves are in a bit of strife. They're calling on the government to do something. So this industry, you're always at a regulatory risk. But putting that aside, I think Medibank is well-positioned to continue to grow. It's got a great market share. The management have just done a brilliant job here through COVID and we expect them to continue to deliver going forward.

Chris Conway: So Medibank for you, Matt. That's solid. David, can you top that? What have you got for us?

QBE Insurance Group (ASX: QBE)

David Wilson: I think we can at First Sentier. For us, QBE. The CEO, Andrew Horton, there has done a fantastic job in the sense that he's been very patient in actually improving the returns. For a long period of time, we all know QBE was something of a horror story through most of 2010 through to 2020 because of some of the poor acquisitions that were made prior to that. What he's been able to do is just systematically, hasn't rushed the improvement and particularly in the North American earnings. So the numbers around it, for that period, it was earning a 6% to 9% ROE. It's now earning 15% to 18% ROE. So it's been a slow, patient improvement and we see more runway for the stock from here. So that's our preferred.

Chris Conway: Well, there you have it, two excellent picks from the gents. If you enjoyed that financial sector special of Buy, Hold, Sell, make sure to give it a like. And don't forget to follow our YouTube channel. We're adding lots of great content every single week.

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Buy Hold Sell is a weekly video series exclusive to Livewire. In each episode two fund managers give their views 'Buy, Hold or Sell' on five ASX listed companies. Not recommendations, please read the disclaimer and seek advice where appropriate.

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