In this piece, we will take a look at the 11 best ASX stocks to buy now. If you want to skip our introduction to the Australian stock market, then you can take a look at the 5 Best ASX Stocks To Buy Now.

With a market capitalization of $1.5 trillion, the Australian stock exchange, also called the ASX, is one of the biggest stock exchanges in the world. It is run and managed by the Sydney, Australia based financial services firm ASX Limited (ASX:ASX.AX), and like other stock exchanges, the ASX’s composition along with the most valuable companies listed in Australia is somewhat a reflection of the Australian economy.

For instance, the most valuable publicly traded company in Australia is the global mining giant BHP Group Limited (NYSE:BHP). Its latest market capitalization sits at $141 billion, and the firm’s top spot in valuation terms is unsurprising given the crucial role that mining plays in the Australian economy. However, when we move further down the ladder of the most valuable Australian stocks, and particularly those that trade on the ASX, the list becomes a bit more diversified and ends up showcasing the advanced nature of Australia’s business sector.

To understand this, consider the most valuable ASX stocks after BHP. These are Commonwealth Bank of Australia (ASX:CBA.AX), CSL Limited (ASX:CSL.AX), National Australia Bank Limited (ASX:NAB.AX), and Westpac Banking Corporation (ASX:WBC.AX). This shows us that the most valuable Australian companies include banks and surprisingly, a biotechnology company. While Australian banking giants, such as the behemoth Macquarie Group Limited (ASX:MQG.AX) are known the world over for their portfolios and services, the country is rarely associated with having a prosperous biotechnology sector – an industry mostly linked with European countries such as Denmark.

This top ASX biotechnology stock belongs to CSL Limited, a Melbourne based company with a market capitalization of A$135 and a product lineup covering gene therapies, kidney medicines, and other products. And just like their American counterparts, stocks on the ASX are also sensitive to news about macroeconomic indicators such as interest rates and inflation.

In fact, these have created somewhat of a roller coaster picture for ASX stocks. While Australia is a developed country, its proximity to China and vast geographical distance from the rest of the developed Western world means that Australian businesses have to rely on the Asian economic superpower for their fortunes. Additionally, just like other developed nations, Australia has also suffered from the twin troubles of high inflation and worrying GDP growth, particularly when it comes to GDP per capita. For those out of the loop, a nation’s GDP per capita measures the economic output per person living inside its borders, and for Australia, the GDP per capita in US dollars has been in a down trend since 2013.

The third quarter of 2023 also marked the third consecutive quarterly GDP per capita drop in Australia, a trend that previously surfaced roughly two decades back. Similarly, growth in Australia has also been slowing down, but due to the country being blessed with natural resources, has nevertheless managed to avoid the weak picture painted elsewhere in the developed world. For the full year 2023, the Australian GDP grew by 1.5%, while posting a more modest 0.2% growth in Q4.

The relatively modest growth figures which ended up meeting economic estimates have also placed the Royal Bank of Australia (the Australian central bank) at the center of media, investor, and analyst attention. Many believe that further interest rate hikes at a time when Australian consumers are digging into their savings to keep up spending would be unnecessary. On this front, a fresh report from Bloomberg believes that the RBA will continue to hold interest rates at 4.35% since inflation is higher than the bank’s preferred range of 2% to 3%.

So the next question to ask is how well are Australian stocks doing in a period of tepid economic growth and consumer pain. On this front, the S&P/ASX 200, an index of Australian stocks maintained by S&P Global Inc. (NYSE:SPGI) provides some insight. The index has gained a modest 11% over the past twelve months, and its year-to-date performance (flat) shows that investors are wary about the prospects of China, Australian interest rates, and economic growth. In fact, the S&P/ASX 200 has posted just 7.5% in gains since the start of the coronavirus pandemic, leaving much to be desired particularly when we consider the heavy hitting American stock indexes.

With these details in mind, let’s take a look at some top Australian and ASX stocks to buy. A couple of notable picks are News Corporation (NASDAQ:NWS), BHP Group Limited (NYSE:BHP), and Rio Tinto Group (NYSE:RIO).

Our Methodology

To make our list of the best ASX stocks to buy, we ranked ASX stocks whose American Depository Receipts (ADRs) trade on U.S. stock exchanges by the number of hedge funds that had bought the shares in Q4 2023. Out of these, the top ASX stocks were chosen.

For these best ASX stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

11 Best ASX Stocks To Buy Now

11. Immutep Limited (NASDAQ:IMMP)

Number of Q4 2023 Hedge Fund Shareholders: 1

Immutep Limited (NASDAQ:IMMP) is a biotechnology company headquartered in Sydney, Australia. It is a specialized biotechnology firm that seeks to rely on the human body’s immune system to fight cancer. Recent analyst coverage for the stock comes only from Baird, which has rated the shares as Outperform.

As of Q4 2023 end, just one out of the 933 hedge funds profiled by Insider Monkey had bought a stake in Immutep Limited (NASDAQ:IMMP). This lone investor was Israel Englander’s Millennium Management, which owned a $144,022 stake.

Along with BHP Group Limited (NYSE:BHP), News Corporation (NASDAQ:NWS), and Rio Tinto Group (NYSE:RIO), Immutep Limited (NASDAQ:IMMP) makes it to our list of the top ASX stocks to buy.

10. Incannex Healthcare Inc. (NASDAQ:IXHL)

Number of Q4 2023 Hedge Fund Shareholders: 1

Incannex Healthcare Inc. (NASDAQ:IXHL) is a diversified healthcare company developing treatments for lung diseases, bowel disorders, and other ailments. The firm has been having a busy 2024 by engaging in trials for smoking cessation, anxiety, and other drugs.

By the end of December 2023, one hedge fund among the 933 that were covered by Insider Monkey’s research had bought Incannex Healthcare Inc. (NASDAQ:IXHL)’s shares.

9. Benitec Biopharma Inc. (NASDAQ:BNTC)

Number of Q4 2023 Hedge Fund Shareholders: 2

Benitec Biopharma Inc. (NASDAQ:BNTC) is another specialty biotechnology company. It focuses on developing gene based treatments for diseases such as dystrophy. The firm’s latest quarter saw it post a $6.7 million loss, with its roughly $20 million in cash and equivalents providing a buffer for some quarters.

During last year’s fourth quarter, two out of the 933 hedge funds polled by Insider Monkey were the firm’s investors. Benitec Biopharma Inc. (NASDAQ:BNTC)’s biggest hedge fund shareholder is Aaron Cowen’s Suvretta Capital Management as it owns $659,631 worth of shares.

8. Mesoblast Limited (NASDAQ:MESO)

Number of Q4 2023 Hedge Fund Shareholders: 2

Mesoblast Limited (NASDAQ:MESO) is a Melbourne based company developing treatments for cancer, liver, and other ailments. The firm scored a win in March 2024 when the FDA expressed support for an accelerated approval for a heart drug.

By the end of 2023’s December quarter, two out of the 933 hedge funds part of Insider Monkey’s database had bought Mesoblast Limited (NASDAQ:MESO)’s shares. Israel Englander’s Millennium Management was the largest investor among these as it owned 1,838 shares.

7. Kazia Therapeutics Limited (NASDAQ:KZIA)

Number of Q4 2023 Hedge Fund Shareholders: 3

Kazia Therapeutics Limited (NASDAQ:KZIA) is a biotechnology firm developing treatments for cancer, lymphoma, and tumors. The firm scored a minor win in February 2024 when it was able to expedite a clinical trial of a brain disease drug after witnessing favorable results.

Insider Monkey dug through 933 hedge fund portfolios for their fourth quarter of 2023 shareholdings to find three Kazia Therapeutics Limited (NASDAQ:KZIA) shareholders.

6. Opthea Limited (NASDAQ:OPT)

Number of Q4 2023 Hedge Fund Shareholders: 3

Opthea Limited (NASDAQ:OPT) is the fifth consecutive biotechnology firm on our list of the best ASX stocks. It makes and sells treatments for eye diseases. Analysts are quite in love with the stock, as they have set an average share price target of $12.72 and rated the shares as Strong Buy.

During last year’s final quarter, three out of the 933 hedge funds covered by Insider Monkey research were the firm’s shareholders. Robert M. P. Luciano VGI Partners owned the biggest Opthea Limited (NASDAQ:OPT) stake which was worth $8.5 million.

News Corporation (NASDAQ:NWS), BHP Group Limited (NYSE:BHP), Opthea Limited (NASDAQ:OPT), and Rio Tinto Group (NYSE:RIO) are some top stocks that trade on the ASX exchange, have their American Depository Receipts (ADRs) available for trading on U.S. exchanges, and are seeing strong interest when it comes to hedge fund money.

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Disclosure. None. 11 Best ASX Stocks To Buy Now was initially published on Insider Monkey.