2024 Annual Recap: Top 10 Australian Stocks and Sector Performance

In 2024, the Australian stock market has shown resilience and strength, with the $S&P/ASX 200 (.XJO.AU)$ reaching new highs throughout the year. On December 3rd, the ASX 200 broke through 8,514 points during trading hours, setting another historical record. As of December 18th, the ASX 200 has accumulated a year-to-date increase of 8.94%. Despite global economic uncertainties and sustained high policy interest rates in the Australian market, the Australian stock market's resilience and the solid performance of key industries have provided investors with substantial returns.

The Information Technology sector has performed the best, with the acceleration of technological innovation and digital transformation driving increased demand for IT services, particularly in key areas such as software development, data analysis, and cybersecurity. The Australian government has also been increasing its investment in critical areas like cybersecurity, artificial intelligence, and quantum technologies. Local Australian IT companies have seized the opportunity to rise in value. For instance, companies like $Life360 Inc (360.AU)$ and $Technology One Ltd (TNE.AU)$ have seen their stocks surge, capitalizing on the growing demand and government support for the sector.

The financial sector, which holds the largest weight in the S&P/ASX 200 index, continues to benefit from domestic policies and support from the real estate sector. Bank stocks, in particular, have stood out, with the $CommBank (CBA.AU)$ seeing a year-to-date increase of 48.2% as of December 18th. Other bank stocks like $Westpac Banking Corp (WBC.AU)$, $National Australia Bank Ltd (NAB.AU)$, and $ANZ Group Holdings Ltd (ANZ.AU)$ have also reached new highs this year. The rise in the financial sector is largely attributed to the continued boom in the real estate market in 2024, with the growth in total housing loans driving the sector's expansion.

The Energy and Materials sectors underperformed in 2024 due to the global economic downturn, which negatively impacted these industries. The economic slowdown led to reduced demand for energy and raw materials, resulting in poor performance for these sectors. The slowdown in demand for energy and metals across various industries also had a significant impact on energy and raw material prices. As of December 18, $BHP Group Ltd (BHP.AU)$ had declined by 11.17%, $Rio Tinto Ltd (RIO.AU)$ had fallen by 7.57%, and $Fortescue Ltd (FMG.AU)$ had plummeted by 29.87%.

$Sigma Healthcare Ltd (SIG.AU)$ has also seen its stock rise by 176% this year. The company supplies medications to over 4,000 community pharmacies across Australia and is involved in the entire pharmaceutical process from product creation to distribution, wholesaling, and retail. Sigma Healthcare boasts its own brands as well as private label products and operates multiple brands. This year, the company entered into a share swap merger deal with Chemist Warehouse valued at AUD 8.8 billion. The Australian Competition and Consumer Commission has approved this transaction. Upon completion of the merger, the new entity is expected to become the largest pharmaceutical brand and listed company in Australia, significantly enhancing its market presence.

$Pro Medicus Ltd (PME.AU)$ has seen an impressive increase of 173% this year. The company, a healthcare information technology firm specializing in radiology imaging software, has experienced a rise in its stock price that correlates with its solid financial performance. Pro Medicus, which is the company being referred to, reported a 29.3% increase in revenue for FY24, reaching AU$161.5 million, while maintaining a profit margin of over 50%. Pro Medicus holds a distinct market leadership position in the medical imaging software and services sector, serving a client base that includes hospitals, diagnostic imaging groups, and other health entities across Australia, North America, and Europe. The company's growth strategy focuses on renewing existing contracts and acquiring new clients. Its flagship product, Visage 7, has been particularly successful, winning all six major public tenders in the fiscal year of 2021.