Buy Hold Sell: 5 Dogs of the ASX and their prospects for 2026

Well, here we are again, staring down the barrel of the year-end.

It’s a time for some fun and frivolity, but amongst the cheer, it’s also the perfect time to cast a discerning eye over our portfolios and make some hard decisions about which companies get a guernsey into 2026.

Shedding the duds also means hunting for new opportunities and while piling into the top 10 best performers from this year is always tempting, there are probably some equal, if not better, opportunities to be had in the downtrodden.

In what has become a tradition at Livewire, Vishal Teckchandani hosts Hugh Dive from Atlas Funds Management and Jun Bei Liu from Ten Cap, to hunt through the bargain bin on the ASX to see if they can find some beaten-down gems. What will they find?

As a bonus, Jun Bei and Hugh each nominate a stock they think is set to get going in 2026.

Note: This episode was recorded on Wednesday 3 December 2025. 

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Edited Transcript

Vishal Teckchandani: Hello and welcome to Livewire's Buy Hold Sell. My name is Vishal Teckchandani and, my friends, today we are heading into the kennel to discuss the Dogs of the ASX. These are the flea-ridden mutts that no investor wants. Their share prices are a complete disaster, but with the right conditions and perhaps the right management teams, even the scruffiest pup can become a showpiece.

So to help sniff out which of this year's dogs might turn into darlings, I'm joined by Hugh Dive from Atlas Funds Management and Jun Bei Liu from Ten Cap. Welcome to both of you. Jun Bei, I'll start off with you. Treasury Wine Estates is down nearly 15% this year. What's going on? Buy, hold, sell?

Treasury Wine Estates (ASX: TWE)

Jun Bei Liu (BUY): Actually, you know what? I'm going to put it on a buy. Look, it's been very tough. The structural decline in alcohol consumption, as well as wine from the young people is so low. And then in the US, we're just seeing it going negative more and more. And the company recently just had a write-down. Things are going really, really tough. However, there's one bright spot. We're seeing green shoots, so that's in China.

Now, in China, remember it was going to be the big turnaround and everything else, and it did. There was a lot of pull-forward purchases. However, China has a policy; you can't drink wine at lunchtime and the like, but now that's been eased. So we are starting to see a positive sign coming through on that front. Maybe, with very low expectation, that will be enough to pull the companies across. I think next 12 months, it will actually do okay.

Vishal Teckchandani: Wow. So Hugh is a turnaround in Chinese culture, in terms of drinking wine at lunch, sufficient to turn the stock around. Buy, hold, sell?

Hugh Dive (SELL): No, it don't so. I like drinking wine, but wine making is a tough, tough business. Whilst I agree, Penfolds is a great brand and they've done very well selling wine to China, particularly the high end stuff. The rest of the portfolio is rather grim. They spent $2 billion investing in Californian wines since 2021. Most of that's written off. All the good will has been written off. We've seen massive decline in wine consumption. Their California distributor sort of left the market. Ultimately, people are drinking a lot less wine, a lot less some of their bulk brands.

So when you think about Treasury Wine, it's not all Grange. There's a lot of other stuff in there. The company's got about $2 billion of debt. They've got inventories of $2.5 billion. And what we've seen historically, a lot of those inventories can be pretty sketchy. They've dumped a lot. There's a lot of low end wine in there.

Whilst I'd like to see a comeback, Penfolds comeback in China, I don't think it goes back to what it was before, where they were selling wine at a massive, sort of almost double the margin into China that was being sold elsewhere in the world. There's more competition in China. I mean, they've got the red bottles. I might bow to Jun Bei, but I'm thinking it's a very tough business to be in.

Vishal Teckchandani: Okay. Keep the wine in the cellar then. Hugh, staying with you. James Hardie, down nearly 40% this year. Mounting legal woes, investors losing faith in management, but the chairman did drop a casual $800,000 on the company's stock. Buy, hold, sell?

James Hardie Industries (ASX: JHX)

Hugh Dive (SELL): Hardies is of one of the only building material companies that actually has some proper IP. Their fibre cement, actually, they have some intellectual property, and they can actually generate a premium for that. Other building material companies, making bricks or tiles, the IP hasn't changed since the times of Julius Caesar.

However, that AZEK acquisition is not a good one. And just the corporate governance, how they treated shareholders - shareholders didn't get to vote on it and was just rammed through. Adding another 35% of shares, it's just too tough. And we saw the chairman and two directors get axed at the most recent board meeting replaced by two AZEK executives. Just the level of corporate errors towards Australian shareholders is too much. I would like to see them rebound, but just that the dilution, buying AZEK, it dilutes the high quality of the underlying earnings from fibre cement. Sell.

Vishal Teckchandani: Okay. Jun Bei, I'm betting you have a different answer. Buy, hold, sell?

Jun Bei Liu (BUY): Oh, I wonder how you know. And look, I've got a buy on it. He's absolutely right. They bought that AZEK business at the top of the market. Just before the market started slowing down with big price tag and forcing Australian investor really into it without consulting too much and just say, "We got to go." And then they front loaded a lot of their book and all the things they've done, which is horrible. But company is now trading on very low multiple.

AZEK, in my view, is actually a good business. If you look at the US analysts that have been covering that company, everyone loved that business. It's just really expensive. They paid way too much money for it. And so the board changes recently, investors voted out all the Hardie's board member, they kept the AZEK board members, which in a way is a vote of confidence saying, "You know what? We actually think AZEK is a good business." Now that we wash through a lot of the things that they've done, we think they can finally rebase the business and grow from here. Even though the market condition is tough because no one has any high expectations anyway.

We are now already seeing the green shoots more recently. So the more recent update, they had upgrade and then they started upgrade. There are already two upgrade that has come through. So we think that they have rebase earnings. Things will look okay and it's not expensive. US rate cut is still on the way. There's 50 basis points expected next year, and we have zero company that give you that exposure to the US market in consumer, in housing, in cyclical. Well, aside from BlueScope is also good, but this is a pure play. So in my view, this is a buy.

Vishal Teckchandani: Okay. Jun Bei, staying with you, Goodman Group, the worst looking dog. It's down 16% this year. Buy, hold, sell?

Goodman Group (ASX: GMG)

Jun Bei Liu (HOLD): Look, I will put on a hold. I wouldn't call Goodman Group a dog. It's one of the highest quality on the market. It just did really, really well in 2024. Everyone became so excited about its data centre opportunity, which they didn't know existed because it was an industrial business. And the company, the management team has delivered year-in, year-out in that industrial property portfolio.

Now what they have found is, "You know what? We got all these industrial properties. Why don't we convert it to data centres?" And they've got the client, they’ve got a capital, they’ve got the site, they’ve got access to energy. Why don't we do that? So in a way, it's actually a cheap way to play into some of those data centres. And that's part of the reason why it's been sold off a little bit because people are questioning about the data centres, but this is a really strong management team, know how to generate return on put capital, on the dollar that they invest in the business. For me, it's a great business. I'll stay with it. Do I buy more? I probably wait till it become a bit cheaper if it does happen, but it's something I always have in my portfolio.

Vishal Teckchandani: Okay. Hugh, same question to you. And since it's $4 billion capital raising early this year, it just seems to have lost momentum. Buy, hold, sell?

Hugh Dive (HOLD): Yeah. I'll concur with Jun Bei. It's a very high quality company, but I think there's still a lot of hot air with that AI and data centres in Goodman. Trading on 24, 25 times has come down from 30 times. I don't own it. I wouldn't own it right now, but if it got a little bit cheaper, I'd buy it. The quality of their industrial properties and their industrial ... The project generation is very high. Still a bit too expensive for me. I would like to have a bit of the heat come out of the data centres.

Also, looking at the pipeline, it's $100 billion worth of data centre pipeline. How does that get funded? They've done quite well in getting capital in the past, but that's an awful lot of money and some of the heat has come out of it. But similar, as Jun Bei said... It's a point in time, a timing mechanism. We've seen a bit of rotation from Goodman into Charter Hall.

Guest picks

Vishal Teckchandani: So now we turn to the one beaten stock that you think could make the ultimate turnaround for 2026. Hugh, what is the dog breed that you want to go for here?

Amcor (ASX: AMC)

Hugh Dive: Well, the dog breed I would go to is not a very exciting company, Amcor. So there's not a lot of AI in medical, food and beverage packaging. They've made an acquisition last year, for Berry, which the market didn't quite like. They didn't quite believe the synergies. What we've been seeing since then is some of the synergies are starting to come through. It's very cheap. It's trading on 10 times earnings with a 6% yield paid quarterly. And we saw in October came through, they upgraded guidance going to generate close to 12% to 17% earnings. Their 2026 is looking a lot brighter. All they have to deal with is a lot of their synergies. When that comes through, we'll see a bit of rebound in the stock and it's not very well liked, but we like it.

Vishal Teckchandani: Okay. So Jun Bei, we're in the kennel, which dog are you taking out as the best turnaround play for 2026?

WiseTech Global (ASX: WTC)

Jun Bei Liu: Oh gosh, there are so many of them. Look, I'm going to put my money on WiseTech. I know this is a tough one. It's controversial. I know there's lots of issues to go with it. The company is down over 40% for 2025. Look, it was expensive, but the business itself is tracking along fine.

Now, it is going through its new commercial model, which was actually at its latest investor day. Now, they have already rolled most of their clients onto it. And the immediate uplift is quite meaningful. It's not in anyone's forecast. Now, we're not banking on that. With the share price, there are very limited expectations at this stage for the next 12 months in terms of growth. And even if we just assume a little bit of those customers coming through with those price increases, that's actually quite meaningful.

So for me, I'm going to put that dog for the top of the list. I think it will do well. Look, it's not for the faint-hearted. It might be speculative, but for me, it is actually a really great business aside from you clearly have other issues that might impact the share price.

Vishal Teckchandani: Okay. Well, there you have it. Some of the ASX scruffiest pups may just have some potential yet. Hugh, Jun Bei, thank you so much for your time. I hope you enjoyed that episode. Please don't forget to like this video and subscribe to our channel. My name is Vishal Teckchandani. Have a great day and choose your dogs wisely.