Buy Hold Sell: Quality vs value across 4 ASX pairs

Investing is rarely black and white, but one of the most enduring debates in equity markets is this: Do you chase the proven performers at a premium, or take a punt on the underpriced underdogs?

In today’s episode, we’re putting that question to the test.

Joining Livewire's Chris Conway are two seasoned portfolio managers, Hamish FitzSimons of AllianceBernstein and Dougal Maple-Brown from Maple-Brown Abbott. Together, they explore some of the ASX’s most closely watched names across key sectors including banks, miners, healthcare, and consumer staples. But there's a twist.

For each 'quality' name, Hamish and Dougal will assess the company in classic Buy Hold Sell style. Then, they’ll weigh up a potential 'value' alternative and tell us whether they prefer it.

Which names offer true long-term defensiveness? Which ones are still too expensive despite recent drawdowns? And which cheaper stocks have what it takes to close the gap?

Please note this episode was filmed on 2 July 2025.

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Edited Transcript

Chris Conway: Hello, and welcome to Livewire's Buy Hold Sell. My name is Chris Conway. Long-term investors are often faced with a choice. Do I go for the high-priced quality name or the lower-priced value name? We're going to do our best to answer that question today. I'm joined by Hamish FitzSimons from AllianceBernstein and Dougal Maple-Brown from Maple-Brown Abbott. We're going to try something a little bit different today. The gents will be presented with a stock and they're going to share their thoughts buy, hold, sell as we normally do. Then, they're going to be asked about an alternative and whether they would prefer it.

Commonwealth Bank of Australia (ASX: CBA)

Chris Conway: First up, Commonwealth Bank, Hamish, I'll come to you first. Buy, hold or sell?

Hamish FitzSimons (SELL): Well, it’s a sell. We are a defensive equities manager, so we tend to look a little bit unfavourably on banks on average because they tend to be very cyclical and they tend to follow the market. We're not predisposed to hold banks in large weights in the first place, but CBA is a standout for us. Interestingly, the comment I'd make is that a lot of retail investors feel the same way as me. You can analyse the registers. They release the data and break it up as retail institutional, local institutional, and international. I'd say roughly 10% of retail has sold their big four bank stocks in the last 24 months. They're looking at CBA. They're going 2.6%, 2.7% dividend yield, growth of 2 or 3%. Fingers crossed bad debts don't come back or I won't get that. They're doing other things with their money, so I think there's a lot of different views on this. Clearly somebody's buying it, but we're not.

Chris Conway: Dougal, do I need to even ask you? Or do we just go straight to the alternative?

Dougal Maple-Brown (SELL): No, I don't think so, Chris. We do hold banks in the fund, to be clear. We are heavily underweight banks and we have zero CBA, and there's not many general funds that hold zero CBA entirely on valuation grounds. Everyone knows the numbers, over 30 times per year, four times book, most expensive bank in the developed world. One broker reckons the most expensive bank in the developed world ever. I don't know how you prove that. No, it's a sell and I'm a long-only investor, but if I got short, I'd be thinking about it.

Alternative: ANZ Group Holdings (ASX: ANZ)

Chris Conway: Let's talk about the alternative, ANZ Banking Group.

Dougal Maple-Brown: ANZ, one of our favourites, is held by the fund and we're heavily overweight. Compared to those numbers I rattled off for CBA, ANZ is on a fraction of that price, 13, 14 times forward earnings. A bit over 1 times book for businesses, which are remarkably similar these days. Yes, ANZ has a lower ROE, but compared to the valuation discrepancy, we like ANZ.

Chris Conway: Hamish, ANZ up just 3% over the last 12 months, so pales in comparison to CBA, but from a value lens, do you prefer that one?

Hamish FitzSimons: Look, I would prefer it. We don't own it. We own no banks at the moment, and look, we have in the past held quite a lot of banks in the fund. As I said, they are quite cyclical, so we tend not to be heavily overweight, but right now we actually see them as expensive, all of them, and we have no banks at all in the portfolio. We're taking a pretty strong position at this point.

BHP Group (ASX: BHP)

Chris Conway: We'll focus on the mining space now. First up, we're going to talk about BHP Group. One of the best diversified miners in the world, if not the best. Dougal, I'll come to you first this time. Buy, hold, or sell?

Dougal Maple-Brown (HOLD): BHP's a hold. We own it. We're underweight. We're very rarely underweight stocks. It's not expensive, but as I alluded to in an earlier episode, the outlook for China in particular and the world more broadly is pretty fuzzy for us at the moment. We've got some, but we're underweight BHP.

Chris Conway: Hamish, down 15% in the last 12 months. Buy, hold, or sell for you?

Hamish FitzSimons (HOLD): Look, it's a hold and I'm probably similar to Dougal. It's in that fuzzy risk zone. If you cast your mind back just nine months, the last week of September, there was an impression created by the leadership of China that they were going to stimulate. All the mining stocks went up 15% immediately like in about four days. That can happen again, and I don't know what the leadership of China was going to do. 2022, they weren't going to open to COVID, they weren't going to let their housing market crash. Well, by June 2022, both of those things had happened. I'm not going to sit around and say, "I'm sure China leadership's going to not do this or they're going to do that." I'm going to think of it as a risk that I need to manage, so I've got to hold on BHP on that basis. 

Alternative: Fortescue Limited (ASX: FMG)

Chris Conway: Hamish, if BHP is the quality name, we'll think about Fortescue as the potential value name. Would you prefer to own that?

Hamish FitzSimons: Look, the issue with Fortescue is it's slightly higher cost than BHP, so things get tighter. It gets tighter for them first. The other thing is that if you've been a shareholder of Fortescue in recent years, you've been a little bit less clear whether you are going to get the money or whether it's going to be invested in some other projects, hydrogen and things like that. You're not quite clear where the cash flows are going, so as an investor, I just feel a little more comfortable about owning BHP. I'm going to get my cash back there. Now, there's always the risk with large-cap miners, they go buy something. Of course, that's like an ever-present risk, but it's a different category of risk.

Chris Conway: Dougal, what about you? Would you prefer to own Fortescue?

Dougal Maple-Brown: FMG is a sell for us. I agree. I think Hamish has said, which is partly why I'm going to sell, but also on the valuations on our numbers, it's not that much cheaper than BHP. I think it should be a lot cheaper than BHP, so no, I'd rather BHP.

CSL Limited (ASX: CSL)

Chris Conway: Let's shift the focus again to healthcare this time. First up, we'll talk about one of the companies on the ASX that really gets trotted out every time you're talking about quality, and that is CSL Limited. It's had a bumpy ride over the last few years coming out of COVID, of course, and then the Vifor deal, which was a bit on the nose. Hamish, coming to you first. Buy, hold, or sell for CSL?

Hamish FitzSimons (BUY): Look, I'm happy to be a buy on CSL. I think there are a couple of issues. Vifor you alluded to. I've got to put that in context. It's like 8 or 9% of their earnings and that's getting some issues with the American kind of anti-vax thing, but it's relatively small. We've seen that happen in Florida. The government can do a few things, but at the end of the day, it's doctors prescribing vaccines. Florida, when they put in anti-vax measures, we're talking a couple of per cent. It's not going to help, but it's small and I don't think it's going to be that big.

Flu's more seasonal, flu vaccines. You get a lot of up and down. That might be more of an issue. The other thing is they're really big business - blood plasma is a fantastic business. The last result was great, so they're really kicking goals there. The other overhang, though, is the American administration trying to just lower the cost of healthcare more generally. They're caught up in that a little bit. I think you're getting compensated for the risk. I think it's a very interesting stock to hold.

Chris Conway: Dougal, down 18% over the last 12 months. Does it get there for you?

Dougal Maple-Brown (BUY): Yeah, so hang on to your hats here, guys. CSL has been the bane of my life for probably a decade. I was reminding Chris earlier that CSL peaked over 10% of the Australian equity market during COVID, 2020. Today, it's less than 5%, 4.5%, so it has halved in relative terms against the market. Of course, when a stock halves or more than halves, I've got to look at it, and so we do. 2020, on an evaluation basis, based on our numbers, CSL. I was mad. Peaked at close to 50 times forward earnings. These were the days when interest rates were basically zero. People were telling me they're going to be zero forever. Since then, CSL has had a miserable five years. It's been derated considerably, today on our numbers 23, 24 times for stock, which has got decent growth to it. Yeah, for the first time in a very, very long time I'm going to buy on CSL.

Alternative: ResMed Inc (ASX: RMD)

Chris Conway: If CSL is acting as the quality name in this pair, we'll talk about ResMed as the value name. Dougal, its had its own problems, especially around GLP-1s and potential thinning of client base, or that was the message that was being passed. Would you prefer to own ResMed over CSL?

Dougal Maple-Brown: No, as a short answer. On our numbers, CSL is cheaper with more growth, and I still view ResMed a bit as a one-trick pony, which worries me. If someone invents a better mousetrap, then that's a risk. That's always been the case with ResMed. We did actually own it last year on the GLP-1 scare. Unfortunately, that got priced out pretty quickly, but today at today's prices, it's backed on 30 times forward earnings. As I said, I can buy CSL on 23, 24. I would rather CSL.

Chris Conway: Hamish, what about you? ResMed as the alternative to CSL? Would you prefer it?

Hamish FitzSimons: I'm going to put on my 'I'm a defensive equities manager' hat here. I think ResMed's just got a lot less clouds on the horizon right now, and we do put quite a lot of value on that. The American administration is trying to lower healthcare costs in America, but they seem to have been exempted from that. Whereas, CSL is still somewhat in the hitting zone, so I think as a defensive equities manager, I'm more predisposed to buy ResMed in this instance, but I do look upon CSL quite favourably as well, to be fair.

Woolworths Group Limited (ASX: WOW)

Chris Conway: Last up, we're going to talk about the consumer staples space, so Woolworth's acting as the quality name. I believe it has the most market share, but might not be performing the best. Dougal, buy, hold, or sell for you?

Dougal Maple-Brown (HOLD): Woolworth's, I'll put it on as a hold. We own Coles. We don't own Woolworth's today, but it's definitely coming up on the radar. Why is that? Woolworth's has had a miserable few years. It's been derated considerably. Back in COVID, it traded at over 30 times forward earnings. Today, it's been derated to a similar multiple to Coles, 23, 24 times forward earnings. They're pretty similar businesses. I still think Coles is doing a bit better on the execution, but that comes in and goes, as we all know, over time, so I'll rate Woolworths a hold.

Chris Conway: Hamish, what about you? Buy, hold, or sell on Woolworth's?

Hamish FitzSimons (BUY): Look, we're a buy, defensive equities. Woolworth's is a pretty stable company. They've had a few things thrown at them, brought the price back as Dougal alluded to, but at the core it's Australian supermarkets. That's 90% of what you're buying that's going to grow along with the Australian economy over time. It's going to have its ups and downs, but that's a good business and they're competing very well online. They've seen off Aldi, they're doing better than Metcash, so I think it's a buy if you're a defensive equities manager.

2 alternative plays - Coles Group Limited (ASX: COL) and Metcash Limited (ASX: MTS)

Chris Conway: Let's talk about the alternatives now. There are a couple of options to choose from, Coles and Metcash, both of which you've already alluded to. Do you prefer either of those over Woolworth's?

Hamish FitzSimons: Well, interestingly, yeah, we hold 65 stocks in the portfolio and we do prefer defensive style equity, so we actually hold all three of those.

I think Coles has put a lot of investment in a few years ago, which is really starting to pay off for them. Got a nice, stable management team, very clear organisational structure. They're doing very well, so we like holding them as well. Whereas, Woollies is, as you know, they've had New Zealand issues. They've had BW issues. They've had management change issues, a lot of other things going on. Metcash supermarkets, they've held their ground pretty well against the big guys, particularly coming out of COVID.

They've also got a lot of hardware going on, and they should be beneficiaries of a declining interest rate cycle as housing development picks up as well. They've got that little differentiator on the side as well as quite a nice grocery business in the middle. We think all of those things are quite defensive and should actually give you pretty good earnings growth over the next couple of years.

Chris Conway: Dougal, you mentioned before that you do hold Coles, so we know that one. Metcash, any interest in that one as well?

Dougal Maple-Brown: No, definitely we hold Metcash as well. It's the cheaper play of all of them. I do make the point, though, that Metcash fundamentally is a distributor rather than a retailer, so a distributor has much smaller margins, so it's not the quality of Woolworths and Coles. Totally agree with Hamish. Metcash has now got three good pillars, which makes it a better business than it was even a couple of years ago, now with some cyclical upside, should rates go down as people are forecasting.

Chris Conway: There you have it, folks. We managed to squeeze quality and value into the same episode. Massive thanks to Dougal and Hamish for participating in this entire round of Buy Hold Sell. If you enjoyed this episode, 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.