Buy Hold Sell: 7 ASX names set to thrive amid lower rates

The RBA meets this month, with the decision due on 20 May. Regardless of what happens with the election and despite this week's slightly hotter-than-expected inflation print, a rate cut is "locked in" according to Westpac. Many in the market agree. 

And whilst some believe it is the last cut we could get for a while, the market is pricing in up to three more cuts for the rest of the year. 

Should these cuts materialise, there is a cohort of capital-intensive and consumer-facing businesses that could benefit from lower debt costs and increased disposable income. Of course, this outlook needs to be balanced against the reason for the cuts in the first place - a slowing economy. 

To help us understand where that balance lies, guest host Matthew Kidman of Centennial Asset Management was joined by Matthew Haupt from Wilson Asset Management and Tim Johnston from Tyndall Asset Management. 

Together, they run the ruler over no less than five ASX companies that could benefit from lower rates. For good measure, they share a name that they believe will be a winner in a lower rate environment. 

Please note this episode was filmed on 23 April 2025.

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Edited Transcript

Matthew Kidman: Hello, and welcome to Buy Hold Sell, brought to you by Livewire Markets. I'm Matthew Kidman. We've already had one and we're about to have a series more of interest rates cuts if the market is right. But that kind of tells us that maybe the economy's slowing down, and that it’s going to be quite difficult for a period, but there's always companies that do well in harder economic times. And to have a chat about the different stocks that might be in that category, Matt Haupt from Wilson Asset Management and Tim Johnston from Tyndall Asset Management.

Matt, I'll start with you. Infrastructure, tollways, cars go along those tollways, doesn't vary much. Transurban, buy, hold, or sell?

Transurban (ASX: TCL)

Matthew Haupt (BUY): Buy. We think the market is a little bit too concerned about their push into the US, thinking they'll do something really large. We don't think they will. I think they're great operators, they're going to partner with very experienced people in the US, so it's a buy for us.

Matthew Kidman: Yield's pretty good, rates come down, prices can go up. Transurban, buy, hold, or sell?

Tim Johnston (HOLD): For us it's hold; only because the total return expectation is just not as good as opportunities elsewhere in the market. So for us it's a hold.

Goodman Group (ASX: GMG)

Matthew Kidman: Okay. Let's get onto the next one. One of Australia's great growth stories, gone from industrial warehousing and now it's a data centre builder. Goodman Group, buy, hold, or sell?

Tim Johnston (BUY): It's a buy. It's de-rated enormously in the last three months as the AI narrative has broken. We don't think the outlook for data centres is materially different in the inferencing space, which is where Goodman's playing. So that long pipeline of conversions to data centres is intact, and for us it's a buy.

Matthew Kidman: Matt, the comment's always been, "Great company, expensive." Well, it's come off a bit. It's 15%, 20% cheaper than what it was. Goodman Group, buy, hold, or sell?

Matthew Haupt (BUY): It's a buy for us. I think the industrial business, obviously with tariffs, could get put under pressure. It's probably worth $22-23, the industrial business. So you're paying $3-4 for the data centre rollout. We think there's an incredible pipeline there. They've raised equity at a very good price. So I think it's a buy here.

REA Group (ASX: REA)

Matthew Kidman: Okay. Real estate always goes up, doesn't it, when we cut rates? REA, probably the most leveraged. Buy, hold, or sell?

Matthew Haupt (HOLD): Hold. Just can't get there with the valuation. Great company, great model; valuation just can't get there. So, hold.

Matthew Kidman: Okay. Tim, valuations don't matter with companies like this, do they?

Tim Johnston: They do to a value manager, unfortunately.

Matthew Kidman: Buy, hold, or sell?

Tim Johnston (SELL): It's a sell for us. Trading on nearly 50 times earnings. It's a great business, but at 50 times earnings you've got to have a lot of conviction in the outlook. And for us, with CoStar coming in, there's not enough conviction to pay 50 times earnings.

Matthew Kidman: CoStar being the ones that have bought Domain.

Tim Johnston: Correct.

Harvey Norman (ASX: HVN)

Matthew Kidman: Okay. All right. Now, a company that doesn't have the shine or the gloss that REA, and has been a controversial stock in the Australian market over the years but a good retailer, Harvey Norman. Buy, hold or sell?

Tim Johnston (BUY): It's a buy. Trading at less than 14 times earnings, its product mix is probably well-suited to the near-term outlook in terms of improving consumer discretionary expenditure, particularly on the housing-related side of things as it's got more flooring and furniture than its direct competitors. So for us it's a buy.

Matthew Kidman: Go Harvey, go. Matt, it's been a tough stock over the years, but as Tim points out, it's got a bit of leverage there into an uptick in the housing market.

Matthew Haupt (HOLD): Yeah, for us it's a hold. For all the reasons you mentioned about the checkered history, the incremental buyer is just not there for us. We'd rather look in other places. So agree with Tim on thematics as a buyer, but the incremental buyer is just not there liquidity-wise.

Matthew Kidman: Okay. Let's get back to a bit of infrastructure. APA Group, buy, hold, or sell?

APA Group (ASX: APA)

Matthew Haupt (BUY): Buy. Great outcome in Queensland with the regulation on pipelines, very defensive, can fully fund their growth profile; buy for us.

Matthew Kidman: APA, Tim? Matt's outlined it, why he likes it.

Tim Johnston (BUY(): Totally agree. It's a buy. The yield's compelling, the defensiveness of the revenue stream's compelling, and the valuation's compelling. It's a buy.

Guest picks

Matthew Kidman: Okay. Now we get to the great point, is you can give us a stock that you like that will thrive even though economy might be a bit tough but rates are lower.

Stockland (ASX: SGP)

Tim Johnston: Yeah, I think Stockland is a stock that people should have a look at. It's obviously part way through a bit of a transition; new management coming in a few years back, improving the quality of the assets in that business, getting rid of retirement which was low-returning, pivoting towards land lease which is much higher-returning. And in addition to that, it's the most leveraged play to an improving demand for housing in an under-supplied housing market.

Matthew Kidman: Very under-supplied. Matt, that's not a bad dynamic; tight supply, rates coming lower, increased demand. That good? And how do you play that?

Mirvac Group (ASX: MGR)

Matthew Haupt: Very good. I'm going to do a derivative of that… Mirvac Group.

Matthew Kidman: The competitor.

Matthew Haupt: Yeah, the competitor. Tough few years; they didn't make any margin on builds because of subbies going under, just cost of goods. But that's all cleared now. You've got a bipartisan government policy supporting housing. You're going to have lower rates, credit availability's there. Mirvac's about 40% office; that's been on the nose. You've got cap rates coming down and development going well. For us it's a lay-down buy.

Matthew Kidman: There you have it. We're going to have lower rates, and instead of going out to buy a really expensive house, the team here have given you some really good tips where you can make money anyway. So if you enjoyed that show, give us a thumbs up, and don't forget to subscribe to the Livewire YouTube channel.