Health care, ride-sharing, and the emerging world of YouTube entertainers are among the industries leading investors have picked for growth in 2025.
Sharing their investment ideas for those thinking long-term, these Australian and global fund managers are offering a sneak peek into their expectations for the upcoming year.
Ozempic injection pens move along a conveyor at the Novo Nordisk production facilities in Hillerod, Denmark.Credit:Bloomberg
They’re also generous with their time, investing pro bono on behalf of the Future Generation-listed investment companies (ASX: FGX and FGG) – Australia’s first dual-purpose investment vehicles that deliver both investment and social returns.
By managers waiving their usual management and performance fees, Future Generation donates 1 per cent of its assets each year to youth-focused Australian charities – donating a total of $87 million since inception. Check out their picks below:
Eleanor Swanson, Firetrail Investments
Top stock: Qoria (ASX:QOR)
Eleanor Swanson, Firetrail Investments. Credit: Edwina Pickles
Rationale: Qoria is an ed-tech company tackling one of the most pressing challenges of our digital age: online safety for children. With cyberbullying, inappropriate content, and digital addiction on the rise, Qoria’s suite of products helps schools and families protect kids while navigating the digital world.
Their offerings range from firewalls and content filtering to real-time monitoring of at-risk children and parental control tools, with the company having a global reach – serving over 22 million students across 29,000 schools in more than 100 countries.
Regulatory support is a key driver of Qoria’s growth. For instance, the UK recently mandated that schools adopt monitoring technology to keep students safe, unlocking a potential $10 million annual revenue opportunity through a strategic partnership with Schools Broadband. With similar regulations likely to follow worldwide, Qoria is uniquely positioned to capitalise on this growing demand.
The company operates in a rapidly expanding market valued at $11 billion and doubling every three years. Add to that its strong revenue growth, operational de-risking, and undemanding valuation, and Qoria stands out as a compelling long-term investment in the essential field of digital safety.
Steve Lambeth, Portfolio Manager, Clime
Top stock: Ramsay Healthcare (ASX:RHC)
Rationale: Put simply, we see the two issues of value destruction via offshore investment and earnings headwinds onset by COVID as changing for the better.
On the first issue, RHC has stopped lobbing capital at offshore markets and is open to divestments (subject to price). Given RHC’s share price implies negligible value for Ramsay Sante, the hurdle is low to create value by taking action.
Even a partial sell-down of Ramsay Sante (53 per cent owned by RHC) would bring significant benefits given the current consolidation of Ramsay Sante pollutes the picture of RHC’s true profitability and balance sheet.
If RHC can find a way to further clean up the international operations, any sale proceeds can be returned to shareholders to help unlock the $900 million of franking credits on RHC’s balance sheet.
The second topic of earnings headwinds onset by COVID is, at last, turning the corner after several false starts. RHC has the number one position in the Australian private hospital market and is well-placed to recover lost earnings as struggling peers reduce capacity and as inflation in pricing and costs moves back into balance.
At $40 per share, we think the market is placing too much weight on today’s depressed earnings picture. It also seems forgotten by the market that KKR bid $88 per share for RHC two years ago.
Although the bid didn’t materialise, we believe it recognised the strategic value of RHC’s competitively advantaged Australian hospital network, which is predominantly freehold-owned and well-positioned to meet ongoing demand growth for hospital services in the years ahead.
Jacob Mitchell, Antipodes
Top stock: Didi Global (DIDIY)
Antipodes’ Jacob Mitchell.Credit:Steven Siewert
Rationale: Didi is the leading ride-hailing app in China that has a strong presence in Latin America where it holds around 40 per cent share in key markets like Brazil and Mexico, as well as building a small business in Australia.
Ride-hailing in China has a very long tail of smaller competitors, the bulk of which emerged during Didi’s 18-month suspension, which saw it banned from the local app store and resulted in it being de-listed from the NYSE.
Despite this, Didi has maintained a market share above 70 per cent, and the company has turned profitable while it grew transaction revenue by over 10 per cent against a weak consumer backdrop.
Didi is on track to see margins improve from around 3 per cent to high single digits over the next 5 years, with international operations turning profitable in Latin America over the next 3 years, even while it grows its food delivery business.
Didi trades at ~6x 2026 earnings compared to 14x for Uber and 14x for Grab. We expect the company to list on the HK stock exchange over the next year, and if this is realised, we expect the valuation discount to close quickly.
Armina Rosenberg, Minotaur Corporation
Top stock: COVER Corporation
Armina Rosenberg in 2019. Credit: Louise Kennerley
Rationale: COVER Corporation is a Japanese company at the forefront of digital entertainment through its VTuber talent management business.
The company has demonstrated extraordinary growth, scaling revenue from $1 million to $360 million in just five years.
It offers an innovative blend of talent management, similar to the K-pop industry, and interesting character creation, as you see in the WWE.
Key investment merits include:
- Strong revenue diversification beyond streaming (now only 24 per cent of revenue) into concerts (16 per cent), merchandising (46 per cent), and licensing (15 per cent), with revenue per VTuber growing from $400,000 in 2020 to over $4 million today.
- Exceptional management under chief executive Motoaki “Yagoo” Tanigo, whose talent-first approach has resulted in industry-leading retention rates and the ability to rapidly grow new talent’s audience bases.
- Global expansion potential, with successful moves into Western markets through group launches like HoloJustice, featuring European and American talent.
- Attractive valuation at 23x forward P/E with >40 per cent guided net profit growth, which appears conservative.
- Strong competitive moat through network effects, brand value, and technological infrastructure that helps VTubers achieve greater success than they could independently.
The stock represents an untapped opportunity to invest in the future of digital entertainment at a reasonable valuation, given its growth profile and market position.
David Allen, Plato
Top stocks: Lockheed Martin, Rolls-Royce, Novo Nordisk, Eli Lilly
Rationale: We believe we are in the midst of a decade-long megatrend of unprecedented defence spending. Geopolitical tensions in regions like the Middle East, Taiwan, and Ukraine, coupled with US strategic ambivalence, have only accelerated this shift.
Within this space, we see significant opportunities in Lockheed Martin, BAE Systems, and Rolls-Royce. Beyond their exposure to rising defence budgets, these companies provide an additional advantage: their defensive nature in portfolios, often performing well during periods of heightened geopolitical instability.
In the healthcare sector, we’ve had strong conviction in Novo Nordisk, the makers of the groundbreaking anti-obesity drug Ozempic. However, we are even more bullish on Eli Lilly. Their drug, Mounjaro, has demonstrated approximately 50 per cent greater efficacy at a lower cost, positioning it as a potential market leader.
These drugs are being hailed as the “Swiss Army knives” of modern medicine, with emerging data showing potential applications for conditions as diverse as heart disease, diabetes, infertility, Alzheimer’s, arthritis, and addiction.
Military spending is forecast to significantly increase in the coming decade. Credit:AP
Nick Markiewicz, Ellerston
Top stock: Corpay (CPAY-US)
Rationale: In an expensive global equity market, Corpay is an overlooked gem, offering attractive earnings growth at an undemanding valuation.
Corpay is a global payments and software company that helps businesses facilitate transactions over three main verticals: fuel cards (largely for trucking fleets), accounts payables and FX.
The business has been led by the same chief executive for 25 years, over which time he has delivered nearly 20 per cent annual EPS growth, placing him among a small number of elite capital managers.
Today, Corpay has grown to become the largest commercial issuer of Mastercard in North America and the largest non-bank FX dealer in the US.
Despite this success, the business trades at an undemanding forward multiple of just 16x earnings, well below its long-term average of 28x and that of other top payment companies.
Market concerns over the long-term impact of electric vehicles on Corpay’s fuel card business – its largest revenue driver – have weighed on sentiment.
However, these concerns are likely overdone. EV penetration remains low, and the fuel card business continues to generate significant cash flow, while Corpay’s accounts payable and FX segments continue to grow at high double-digit rates, which, we think, are likely to be sustained for many years.
Katie Hudson, Yarra Capital Management
Top stock: Auckland Airport
Katie Hudson, the head of Australian equities research at Yarra Capital Management. Credit:Arsineh Houspian
Rationale: Auckland Airport is a long-term compounder with the ability to grow earnings over time driven by traffic growth, price growth and investment in capital projects with compelling, regulated rates of return. An added bonus is that an environment of falling interest rates is supportive of long-duration assets like airports.
Kieran Moore, Munro Partners
Top stock: Taiwan Semiconductor
Rationale: Taiwan Semiconductor is the world’s largest semiconductor foundry that produces over 60 per cent of the world’s semiconductors that end up in a variety of different companies and sectors.
TSMC has built its reputation as the leading foundry through its scale, ability to deliver semiconductor products and technology leadership. The company produces semiconductors for some of the world’s largest businesses, such as Apple, Nvidia and Broadcom.
At Munro, we believe TSMC sits at the forefront of two long runways of growth. Firstly, the company produces semiconductor content that is critical for AI servers. TSMC expects AI server revenues to grow at a 50 per cent CAGR over the next five years and will represent over one-fifth of their total revenues by 2028. Management has revised this target upwards several times in the last 12 months.
Secondly, as AI progresses over time, we expect TSMC to play a significant role in AI moving to the “edge”, where AI applications are processed on PCs and smartphones, as opposed to exclusively within data centres. Over the next five years, we anticipate TSMC can double its earnings per share.
Zehrid Osmani, Martin Currie. Credit: Brook Mitchell.
Zehrid Osmani, Martin Currie
Top stock: BE Semiconductor Industries
Rationale: BESI is a Dutch company that is, in our view, well-placed to stretch the so-called “Moore’s law” within the semiconductor industry (the observation by Gordon Moore back in 1975 that the number of transistors in an integrated circuit doubles about every two years).
BESI is solely dedicated to the development and manufacture of cloud data and AI semiconductor assembly equipment for the global semis and electronics industries. Stretching Moore’s law has become a challenge in the semiconductor industry – BESI’s chiplets help achieve just that.
A “chiplet” is part of a processing module that makes up a larger integrated circuit. Rather than manufacturing a processor on a single piece of silicon with the desired number of cores, chiplets allow manufacturers to use multiple smaller chips to make up a larger integrated circuit.
At a high level, by breaking up a larger single chip into smaller chiplets, manufacturers can gain several benefits, notably an improved yield, a more specialised and optimised chip manufacturing process, lower production costs, faster time to market, and a more flexible approach to tailored microchip designs.
Overall, we predict chiplets to become an increasingly prominent secular theme with early adopters, including Intel and AMD. Growth in this area is driven by high demand for high-performance computing for AI, gaming and data centres, alongside advance memory, smartphone processors, and sensor/display functions.
Whilst the semiconductors industry remains cyclical, over a 5-year basis, we predict BESI’s sales and earnings to grow at an annualised rate of well over 20 per cent and its returns on invested capital to increase steadily from an already very high level of 54 per cent.
This article was originally posted by The Age here.
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