It was a stellar year for investors here and abroad, with some stand-out stocks on our market as interest rate cuts start to relieve some economic pressure.
In January, the Herald asked professional stock pickers which companies they were backing on the New Zealand, Australia and US stock markets.
This article reveals how their picks performed in the year to December, and the stocks they’re picking for 2025. Scroll to the end to see a graphic of all the results and picks.
It was a year of two halves for our share market with almost all of the gains coming after interest rates were cut, although economic challenges saw many companies dim their lights this year, including some notable names.
Spark suffered under the weight of reduced corporate and Government spending, but its loss was Infratil’s gain as the owner of One NZ saw its early data centre bets pay off.
Surprisingly, stock brokers remain committed to some of the poorest performers, such as retirement village operator Ryman Healthcare, with optimism that interest rate cuts may finally result in improved finances, especially in an industry tied to the housing market.
Energy was a consistent pick for the new year, with Contact and Mercury specifically in sight, after a crisis period that made electricity generation’s importance clear.
Firms were increasingly investing in companies offshore, with some firms' picks for 2025 allocated entirely internationally where they could get more exposure to technology.
“The global economy is expected to grow at around 3% in 2025, with inflation continuing to normalise after the highs of recent years,” Hamilton Hindin Green investment adviser Jeremy Sullivan said.
“However, growth may be uneven across regions due to varying impacts of tariff and immigration policies, particularly in the US and China.
“Despite these challenges, the ongoing recovery and advancements in technology offer significant opportunities for growth and development.
Retirement village operator Summerset was a favourite for the new year, following its outperformance in 2024.
The company made a total shareholder return of 26.6% in the year to December 9, according to figures collated for the Herald by Forsyth Barr.
“Summerset has been a standout performer in 2024 and remains our top pick in the retirement sector,“ Craigs Investment Partner’s head of private wealth research Hamish Don said.
“We have a favourable view of Summerset’s development strategy and think it can deliver strong cash flows and significant value for shareholders in the future.”
Infratil was another crowd favourite for a repeated year with firms expecting it could keep building on top of this year’s 23.3% total return and its addition to the MSCI World Index.
“The demand for and valuation of data centres is central to Infratil’s positive outlook,” Nikko Asset Management’s head of New Zealand equities Michael Shrerrock said.
“Furthermore, should Contact’s takeover of Manawa Energy be approved by [the] Commerce Commission, then Infratil will receive Contact shares and cash for its Manawa holding.”
Nikko and Forsyth Barr both had Contact on their lists for the new year, after it added more geothermal generation to its portfolio.
“Contact Energy trades at a significant discount to Mercury and Meridian Energy and offers similar or better earnings growth.” Forsyth Barr senior equities analyst Aaron Ibbotson said.
Although, Salt Funds was picking Mercury as its power play, purely because it was priced cheap.
“Occasionally, the forced idiocy of passive funds gives active investors a free hit in large cap stocks,” Salt’s managing director Matt Goodson said.
Stock broking firm Hamilton Hindin Greene picked only international stocks for 2025, with United States household names Walmart and BlackRock among its picks.
“Walmart had a strong fiscal year 2024, with a 6% increase in revenue to US$648.1 billion,” Investment adviser Jeremy Sulllivan said.
“The company also saw significant growth in its eCommerce sales, which surpassed $100 billion for the year.”
Hamilton Hindin Greene’s Australian-listed picks included Xero and WiseTech Global.
“Xero’s focus on expanding its subscriber base and enhancing its product offerings, particularly in the US market, is expected to drive growth,” Sullivan said.
Some of the firms also had an international technology play in their investment line-up, including Amazon and Uber.
The well-known ride-share app “getting good traction with its loyalty scheme and with selling advertising, which is very profitable,” Forsyth Barr’s Ibbotson explained.
Getting the bad news out of the way first, Spark and Ryman Healthcare turned out to be poor performers, despite some firms backing them at the outset of 2024.
The telecommunications company Spark was deemed somewhat defensive in an economic downturn, however, it had suffered more than stock pickers expected, with its share price hitting its lowest level since 2015 this year.
Spark’s total shareholder return for the year to December 9 was -40.2%, including its share price fall buffered by any dividends paid, according to figures collated for the Herald by Forsyth Barr.
“It’s fair to say that Spark surprised and disappointed the market with its poor earnings result,” Nikko Asset Management’s Michael Sherrock said of its early 2024 pick.
“Its removal from the MSCI World Index, which forced a significant sell down of stock, further weakened its share price.”
The company recently sold the rest of its cell tower infrastructure business and announced an earnings and dividend downgrade.
“The board and management acknowledge that our current financial performance falls short of what is acceptable, and we understand the disappointment our shareholders will be feeling,” Spark chairwoman Justine Smyth said in October.
However, two analysts have since upgraded their rating on Spark’s stock, suggesting it could be oversold.
On a similar note, retirement village developer and operator Ryman’s total return for the year to December was -28.8%, making it among one of the worst performing on the New Zealand Stock Exchange (NZX) this year.
Chairman Dean Hamilton recently announced a near halving in its half-year net profit and rising vacancies across its properties.
Its struggles speak to the housing-tied difficulties more broadly, where higher interest rates may still be having an impact, but much of Ryman’s problems were its own doing, as Hamilton explained to the Herald in June.
“The financial performance has slowly deteriorated,” the chairman said.
“A bit like being in a boiling pot and then when you look at it five years later you go, ‘how did the business get to this position?’”
It surprised stock pickers at Forsyth Barr who were backing the company to be one of the best performing this year as interest rates were expected to come down.
“We believe Ryman to be the most attractive mid to large-cap opportunity in New Zealand over the coming 12 months,” Forsyth Barr senior equity analyst Aaron Ibbotson said in January.
One month after making that statement, the company raised $902 million from investors to help repay debt, followed by its chief executive resigning.
In Ibbotson’s defence, he was sticking with the stock for 2025.
Another of Forsyth Barr’s picks did not play out as hoped, with AFT Pharmaceuticals making a -18.2% total return in the year.
The Maxigesic pain-relief producer announced a significant operating profit downgrade in November.
Hamilton Hindin Greene’s own property pick played out poorly - Vital Healthcare, which owns medical properties such as private hospitals, made a -12.1% total return.
“Despite a solid dividend yield of 6.42%, the stock’s capital value declined,” Hamilton Hindin Greene investment adviser Jeremy Sullivan said.
“The company focused on divesting non-core assets and reinvesting in new developments, which, while strategically sound, impacted short-term performance.”
Sky Television was among the favourites for both Craigs and Nikko Asset, who liked it because of its dividend payout potential.
While the media company did pay a solid dividend, it failed to help the share price, finishing the year to December with a total return of just 0.2%.
“Sky has not been immune to a weak economy, and has bounced around over the year a bit like a rugby ball,” Nikko’s Sherrock said.
“Sky Network Television has been a disappointing pick,” Craigs’ Hamish Don said.
“In August, the company reported slightly lower-than-expected profit and tempered investor expectations by reducing its revenue guidance.”
Both raised investor concerns about renewing expensive New Zealand rugby rights going forward, although they both believed its decent dividend of 30 cents per share next year was attractive.
“We continue to see value in Sky Network Television,” Don said.
Nikko was sticking with Sky as a top pick for 2025.
Despite Ryman’s woes, a competing retirement village developer was one of the best performing picks for the year.
“Summerset has been a standout performer in 2024 and remains our top pick in the retirement sector,“ Craigs’ Don said.
“We have a favourable view of Summerset’s development strategy and think it can deliver strong cash flows and significant value for shareholders in the future.”
Both Craigs and Nikko cited official interest rate cuts as benefiting the company’s position.
“These rate cuts oil the wheels of the housing market, increasing turnover, and making it easier for retirees to sell up and move into retirement villages, therefore stock sentiment continues to improve,” Nikko’s Sherrock said.
Infratil was the most shared pick for the year and played out as expected with a 23.3% total return, largely due to a higher revaluation of its CDC data centres investment.
“Although, CDC didn’t catch quite the degree of euphoria and hype that propelled some other data centre names around the world,” Salt Funds Management’s Matt Goodson said of his team’s pick.
In comparison to Spark, Infratil, which owns the telecommunications company One New Zealand, was added to the MSCI World index, which resulted in a large amount of stock buying.
Salt Funds was the best-performing stock picker of the year, with its backing of insurer Tower, which managed to hike premiums on the back of a tough period of claim volumes following Cyclone Gabrielle and flooding events.
Tower’s total return came in at 127.8% in 2024, making it a market stand out.
“Tower played out as well as we could have hoped with a very supportive insurance cycle for the first time in years,” Goodson said.
“Having no major [weather] events was a piece of overdue luck.
“We still see Tower as being cheap. Premium growth will be a lot slower from here, but they have a number of growth levers and the market still values them as though they get hit by their full retained exposure to large disasters each and every year forever.”
Salt’s outperformance was also bolstered by its Freightways pick, which made a total return of 27.8%, “despite the hideously weak NZ economy," Goodson said.
“October onwards has been a lot better for many cyclical companies as the Reserve Bank of New Zealand reverses its earlier over-tightening.”
Salt was continuing to back Freightways in 2025.
Another benefiter of interest rate cuts was Contact Energy, which made a bullish $1.86 billion takeover offer for retail power player Manawa and opened its new geothermal station outside of Taupō in the year.
The power player was picked by both Craigs and Nikko Asset this year, and Nikko and Forsyth Barr had it as a top pick for 2025.
“Performance has been supported by solid customer demand and sales channel options, confirmation that the Tiwai Point aluminium smelter will keep operating for a further 20 years, and the RBNZ lowering the Official Cash Rate,” Craigs’ Don said.
On its potential Manawa purchase which was yet to be approved, Don said: “The generation assets of these businesses are complementary and we think there is a high probability the Commerce Commission will approve the transaction.”
Forsyth Barr’s best pick for the year turned out to be a2 Milk, which by mid-year was the best performing stock on the NZX.
It defied concerns of the impact a declining birth rate in China could have on its infant formula product, and was now sitting on $1b in cash and looking to pay a dividend for the first time in its 20-year history.
Hamilton Hindin Greene made a bold bet on the market itself in 2024, picking the NZX to be a stand out - and it was.
“The company’s revenue and net income saw significant growth, driven by increased trading volumes and new product offerings,” Jeremy Sullivan said.
“This strong financial performance was reflected in the substantial capital appreciation and a healthy dividend yield.”
In total, the NZX Top 50 index was sitting 9.7% higher by mid-December, on par with Australia’s Top 200 index, but well below the major US market, the S&P500, which had returned 27% year to date by December.
The offshore outperformance in 2024 paid off for investors with international exposure, especially for those in technology stocks.
Craigs' US-based pick Amazon “has had an excellent year and has consistently outperformed analyst estimates,” Hamish Don said, with a total shareholder return of 51.5%.
While it was commonly known for its online retail business, the technology giant’s data centre and artificial intelligence division, Amazon Web Services, was increasingly impressive.
“AWS is an exceptional business with growing earnings and margins,” Don said.
“The company should benefit from ongoing advancements in artificial intelligence (AI) and management is becoming more convinced of the opportunities that AI presents.”
Australia delivered for Forsyth Barr, with its Fisher & Paykel Healthcare competitor pick ResMed returning 50.6%.
Although healthcare was inconsistent, with Johnson & Johnson coming in negative for the year for Hamilton Hindin Greene.
The best-performing stock-picking firm for 2024 was Salt Funds Management, with an average total shareholder return of 36%.
Salt knocked Forsyth Barr from its previously highly ranked spot - it made the smallest return for the year with a, still positive, 13.7%.
You can see all of the 2024 stock picks and their performance in this graphic below.
Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.
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