We recently published a list of 10 Best Australian Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Mesoblast Limited (NASDAQ:MESO) stands against other best Australian stocks to buy according to billionaires.
Australian Market Outlook 2025
In December 2024, Ausbil Investment Management Limited released its equity market outlook 2025. Ausbil anticipates Australia’s economic growth will improve heading into 2025, supported by global monetary easing and Australia’s low unemployment rates. It foresees the Reserve Bank of Australia (RBA) potentially reducing rates in 2025, aligning with other central banks, which could boost earnings growth and revitalize cyclical demand. Moreover, the report also expects earnings growth across various sectors to exceed market expectations. However, geopolitical risks, particularly potential trade wars under a newly elected President Trump, pose the most significant threat. If you want to read more about the recent tariffs imposed by the US you can look at the 10 Most Undervalued High Quality Stocks to Buy According to Analysts and 11 Best Undervalued Stocks to Invest in Now.
Ausbil’s general outlook is that a Trump presidency will favor business and markets, but trade changes could cause disruptions and opportunities. It identifies potential in several sectors and expects earnings growth to surpass consensus estimates in FY25. In contrast to widespread recession predictions since late 2023, Ausbil has maintained a more positive view. Australia’s GDP is projected to recover in the latter half of 2024, averaging 1.4%, and further increase to a trend pace of 2.5% in 2025. Household consumption is expected to contribute less of a drag on economic activity. On the other hand, while the labor market remains strong, a slight increase in the unemployment rate to 4.2% is anticipated as labor supply grows and demand relatively slows. Despite this, the economy is expected to maintain its broad-based gains over the past 50 years, which is good news for companies whose earnings depend on household spending. The report expects that the structural demand for resources and a favorable interest rate differential should strengthen the Australian dollar, with forecasts predicting it will rise to US70 cents and the trade-weighted basket will increase.
Ausbil expects that Australia’s global interest rate participation will ease in 2025, which is anticipated to support high-quality resource and energy companies. Moreover, the report also expects the earnings growth to recover more than the market anticipates in FY25, broadening across sectors and market capitalization. The FY24 reporting season was weak due to high inflation, higher interest rates, and softness in China. However, looking to 2025, the report foresees relief for balance sheets and income statements from the RBA potentially starting to ease monetary policy, joining other developed markets, which would reduce debt costs.
Our Methodology
To curate the list of the 10 best Australian stocks to buy according to billionaires, we used the Finviz stock screener and Insider Monkey’s billionaire Q4 2024 database. Using the screener we aggregated a list of Australian stocks. Next, we checked the number of billionaires holding each stock and ranked them in ascending order of the number of holders. We have also added the total value of holdings along with the number of hedge funds holding each stock, sourced from Insider Monkey’s Q4 2024 hedge funds database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A biotechnologist in a lab suit studying a syringe with a mesenchymal lineage cells inside.
Mesoblast Limited (NASDAQ:MESO)
Number of Hedge Fund Holders: 2
Number of Billionaire Investors: 1
Total Value of Billionaire Holdings: $3.56 million
Mesoblast Limited (NASDAQ:MESO) is an Australian company that creates and sells unique cell-based medicines to treat severe inflammatory conditions. It uses specialized technology to develop these “off-the-shelf” treatments. The company deals in cell-based medicines, inflammatory conditions, and off-the-shelf treatments.
On March 1, Jason McCarthy from Maxim Group maintained a Buy rating on the stock with a price target of $30. The analyst noted that the price of Ryoncil (the mesenchymal stromal cell therapy approved by the FDA) is approximately $1.55 million per treatment, which is justifiable due to its significant economic benefits. McCarthy believes that Ryoncil is a promising treatment for pediatric steroid-refractory acute graft vs host disease (SR-aGvHD), with a total addressable market of around $600 million. Moreover, the analyst also mentioned that Mesoblast Limited (NASDAQ:MESO) has secured $161 million through a private placement, which should support the commercialization of Ryoncil in the US. Considering the pipeline of the company, including a potential accelerated filing for Rexlemestrocel-L in Class IV heart failure, increases its valuation potential. Mesoblast Limited (NASDAQ:MESO) is one of the best Australian stocks to buy according to billionaires.
Overall, MESO ranks 8th on our list of best Australian stocks to buy according to billionaires. While we acknowledge the potential of MESO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MESO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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