Morgans’ ‘Best Ideas’ for November and sectors to watch

“This creates a mixed outlook for large companies operating nationwide and a bigger divide between market winners and losers,” Morgans says.

“Australia’s economy is growing at a pace well below the average, requiring us to dig deeper for returns in Aussie Equities. While index (ASX 200) returns have been relatively subdued, this does mask a larger bifurcation in returns in key sub-sectors including Resources, Healthcare and the Banks. Sector and stock selectivity is increasingly important, absent a broad economic tailwind.”

Tang and Sartor note that real GDP growth averaged around 3.5% between 1990 and the GFC, built on economic reform, population growth and the China-led resources boom. It eased to around 2.5% in the 2010s, but growth is now forecast at just 1.4% in 2026, lifting to around 1.7% in 2027-28.

"Australia is not in recession, but GDP per person fell in 10 of the 15 quarters to March 2026, so for many households it feels like one," Morgans says.

But lower growth doesn't automatically mean poor returns. In FY26, the ASX 200 delivered a below-average 6% total return, yet the major miners returned around 40%.

"It means investors need to rely less on economic tailwinds lifting the entire market and become more active in unearthing returns from within the index."

Best Ideas for November

Beyond sluggish growth and persistent inflation, the sharp rise in government bond yields globally is also informing Morgans’ sector views and “Best Ideas” for November, which are the firm's best standalone ideas in Australian equities, supported by analyst conviction.

Acrow (ASX: ACF)

The first of the two additions to the Best Ideas list is integrated constructions systems provider Acrow. Morgans believes that its recent weakness appears unjustified, pointing to its June capital raise getting its balance sheet looking healthier and a strong growth outlook over the next 3-5 years thanks to upcoming construction for the Brisbane Olympics.

Barrenjoey (ASX: BJY)

Fresh off a merger with Magellan Financial Group, diversified investment management business Barrenjoey makes its way onto the list for November thanks to a strong balance sheet, with about $611 million of liquidity, and “material growth optionality”.

"Whilst BJY faces some near-term earnings headwinds linked to weaker markets, and there is execution risk in turning around the Funds Management business, we believe the Barrenjoey merger reinvigorates the broader investment case for Australian investors."

Off the list

On the other side of the ledger, Morgans removed Guzman y Gomez (ASX: GYG) from its Best Ideas after a positive trading update played out, Wesfarmers (ASX: WES) after a softer-than-expected AGM trading update, and Dalrymple Bay Infrastructure (ASX: DBI) after forecast returns compressed to below 5%.

Consumer Staples - Overweight

Morgans sees the defensive earnings of the major supermarkets as an important source of portfolio resilience. Recent ACCC action against Coles and Woolworths over misleading discounting is a clear negative in terms of consumer perception, but Morgans says operational performance remains solid.

“Following the RBA’s recent rate hikes amid persistent inflation, consumers are becoming increasingly value-conscious - eating at home more frequently, reducing shopping trips to save on fuel, and favouring promotions. Should rates rise further and inflation remain elevated, these behaviours are likely to persist.

“We continue to view the Consumer Staples sector as relatively attractive during periods of market volatility. Its defensive characteristics, supported by population growth and a steadily growing dividend stream, should underpin resilience.”

There may be a limit to the near-term upside in the sector, however, with Morgans adding that recent share price strength means valuations appear full.

Healthcare - Neutral

That rally is the main reason for the downgrade, with higher bond yields and a stronger Australian dollar are also creating headwinds, given the sector's significant offshore earnings.

"After the strong Sep-Q re-rating, the broad valuation opportunity has narrowed. We therefore expect returns to become increasingly dependent on earnings delivery and company-specific execution rather than further sector-wide multiple expansion."

Morgans remains constructive on the sector's medium-term fundamentals, pointing to ageing populations, rising chronic disease and growing healthcare spending. It sees AI as an incremental driver of productivity and innovation, but "evolutionary rather than as a near-term catalyst”.

Healthcare Best Ideas

• Imricor (ASX: IMR): Sole global provider of a complete MRI-guided electrophysiology platform for cardiac ablation.
• Pro Medicus (ASX: PME): Market-leading platform, strong fundamentals at an attractive valuation.
• ResMed (ASX: RMD): Fundamentals sound, improving profitability, margins expanding.
• Sigma Healthcare (ASX: SIG): Defensive, best-in-class operator with offshore expansion opportunities.

Industrials - Neutral

The August reporting season highlighted how unforgiving the market has become, with companies that missed expectations punished, while those that beat were rewarded, although “the market's reaction to disappointments was generally more severe than its reward for positive surprises”.

M&A was also a prominent theme, with Reliance Worldwide and Cleanaway attracting takeover interest. Morgans says this shows how quality businesses can become attractive targets when valuations drift away from fundamentals.

“We expect further periods of volatility over the next 12 months, which should create attractive entry points for investors.”

Industrials Best Ideas

• ALS Limited (ASX: ALQ): Global geochemistry leader with strong industry tailwinds.
• Civmec (ASX: CVL): Leading WA contractor to the mining, energy, defence and industrial sectors.
• Monadelphous (ASX: MND): Tier 1 engineering construction and maintenance contractor.
• Orica (ASX: ORI): Leading global explosives company, solid earnings growth.

Agriculture - Neutral

“Despite El Niño concerns, seasonal conditions have held up better than expected across key regions. A larger winter crop, resilient livestock markets and easing input costs have reduced some of the sector downside risks.”

Grain and oilseed prices have risen on supply concerns linked to geopolitical conflicts, higher oil prices and poor weather. Livestock remains a bright spot, while dairy prices have firmed on strong global protein demand, with rising use of GLP-1 weight-loss drugs also boosting demand for protein-rich foods.

However, the Bureau of Meteorology expects El Niño conditions to peak between November and February, and Morgans notes that a hot, dry finish to spring could cut yields and grain quality. Biosecurity is another concern, with H5N1 bird flu detected in wild birds.

Agriculture Best Ideas

• Nufarm (ASX: NUF): Leveraged to favourable global agricultural trends, with a strategy refresh to unlock value.
• Treasury Wine Estates (ASX: TWE): Turnaround story under new management, leveraging iconic brands.

Rounding out the picks

Beyond these sectors, Morgans has Best Ideas in Resources, Consumer Discretionary, Online and Financials: