Same Theme, Better Choices: Here Are 5 ASX Stocks Not To Buy, And 5 To Buy Instead!

It is easy to think of ASX Stocks that are a compelling case to buy, but tougher to think of ASX Stocks Not To Buy. Often, people are lured into companies because they represent compelling thematic right now: surging gold prices, copper’s electrification boom, resilient healthcare demand, and a quick-service restaurant sector that keeps growing.

But not every stock riding a promising wave is worth your money. Even gold stocks can underperform in a bull market if they stumble across operational issues or get bitten by bad hedging decisions. Sometimes the better opportunity sits just next door: you get the same story but better execution. This article outlines five swaps worth considering.

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Here Are 5 ASX Stocks Not To Buy, And 5 To Buy Instead!

1. Don’t buy: Northern Star Resources (ASX: NST)! Buy instead: Evolution Mining (ASX: EVN)

Gold is arguably the standout commodity of this cycle. The yellow metal has surged past US$5,000 per ounce, driven by geopolitical tension, central bank buying, and a weakening US dollar. Many gold stocks have been major beneficiaries, but they are not equal opportunities right now.

Northern Star has been underperforming with back to back production cuts, the latest of which wiped out $7bn in value in a single day. Northern Star started FY26 targeting 1.7-1.85Moz. That was cut to 1.6-1.7Moz in January only to be cut again to 1.5Moz.

The acquisition of De Grey Mining and its world-class Hemi deposit in Western Australia added significant long-term upside, but it also added complexity, integration risk, and meaningful debt to the balance sheet. Executing on a project of Hemi’s scale — one of Australia’s most significant undeveloped gold deposits — while maintaining operational momentum across existing mines is a heavy ask. The higher all-in sustaining costs relative to peers haven’t helped.

Evolution Mining, by contrast, has been firing on all cylinders. Its HY FY26 results delivered record financial performance, a delevering balance sheet, and a landmark interim dividend of 20 cents per share — fully franked and its highest ever. Management has also approved growth projects at Northparkes and Ernest Henry, giving the company increasing copper exposure alongside gold — a meaningful diversifier as the commodity mix works in its favour. For investors who want clean gold exposure with strong cash generation, lower execution risk, and an increasingly attractive dividend profile, Evolution is the play.

2. Don’t buy: Guzman y Gomez (ASX: GYG)! Buy instead: Collins Foods (ASX: CKF)

The quick-service restaurant sector has real structural tailwinds. Time-poor, value-conscious Australians keep spending on fast food even when household budgets tighten. The problem with Guzman y Gomez isn’t the thematic: it’s the price tag!

GYG listed in 2024 amid extraordinary hype, listing nearly 40x earnings and then briefly commanding a valuation of nearly 500 times earnings. Even after a painful share price retreat, the stock continues to trade at over 100x earnings, a number that demands near-flawless execution forever. The US market expansion, which was supposed to validate GYG as a global brand, has delivered underwhelming results. Comparable store sales growth has slowed, free cash flow is negative, and GYG remains one of the most shorted stocks on the ASX.

Collins Foods is a fundamentally different proposition. The KFC operator — which runs hundreds of restaurants across Australia, Germany, and the Netherlands — has delivered shareholders a >17% return over the past year. Its most recent half-year results showed strong profit growth and management upgraded guidance. The valuation sits at a fraction of GYG’s, trading around 8 times EV/EBITDA. Taco Bell expansion provides an additional growth vector. Collins Foods is proof that boring execution beats exciting narratives.

3. Don’t buy: Healius (ASX: HLS)! Buy instead: Sonic Healthcare (ASX: SHL)!

Australia’s ageing population makes healthcare one of the most durable long-term thematics on the ASX. More Australians means more blood tests, imaging scans, and pathology requests. Both Healius and Sonic Healthcare sit squarely in this thematic, but one is thriving while the other is fighting for survival.

Healius has become a cautionary tale in cost structure and execution. Its FY25 results were damaging: underlying EBIT fell 27%, and the company recorded a statutory net loss of $151 million. The board cut the dividend entirely. Trading around 61 cents — down from over $1.60 at its 52-week high — HLS is a deeply distressed stock facing structural cost pressures with no near-term resolution in sight.

Sonic Healthcare is operating in the same industry with starkly different results. Revenue grew 8% to nearly $9.7 billion in FY25, with a 7% lift in net profit. The recent acquisition of Germany’s LADR Laboratory Group adds meaningful European revenue, and management has guided to EBITDA growth of around 13% for FY26. Sonic’s “medical leadership” model — built on retaining top clinicians and winning referring doctor loyalty — has consistently delivered organic market share gains over years. With a dividend yield of around 4.7% and a property monetisation process (a Brisbane hub lab sale and leaseback) potentially funding a share buyback, Sonic offers income and growth in one package.

4. Don’t buy: 29Metals (ASX: 29M)! Buy instead: Sandfire Resources (ASX: SFR)!

The copper thematic is as powerful as any on global markets. Electrification — driven by electric vehicles, renewable energy infrastructure, and now the enormous power demands of AI data centres; is expected to create a structural supply deficit over the coming decade. Investors wanting Australian copper exposure should be choosing their vehicle carefully.

29Metals has had a difficult run. Its Capricorn Copper mine in Queensland was devastated by flooding in 2023 and 2024, leaving the company operating on a single asset (Golden Grove in Western Australia) while navigating regulatory hurdles to restart Capricorn. Capital raisings have diluted shareholders, and the Capricorn restart timeline remains uncertain. It’s a turnaround story, and turnarounds can take longer than expected.

Sandfire Resources is the better-quality copper exposure. Australia’s largest pure-play copper producer delivered record revenues in FY25, returned to profitability with net income of $143.99 million, and grew copper equivalent production 12% year-on-year, largely driven by its Motheo project in Botswana not to mention MATSA in Spain. Geographic diversification across Spain, Botswana, and development assets in North America reduces single-asset risk. The stock has surged over 93% in the past 12 months, and while that strong run warrants some valuation discipline, Sandfire’s operational track record and balance sheet position make it the more reliable vehicle for the copper thematic.

5. Don’t buy: Appen (ASX: APX)! Buy instead: WiseTech Global (ASX: WTC)!

Technology is a sector where the quality gap between companies can be enormous, and nowhere is this more evident than in the contrast between Appen and WiseTech Global.

Appen built its business on human-annotated data — sourcing crowd workers to label training datasets for AI and machine learning companies. The cruel irony is that the very AI revolution Appen helped enable has rendered its core business model increasingly redundant. As large language models improve, the demand for human-annotated data at scale has structurally declined. Appen has suffered multiple guidance downgrades, revenue erosion, and significant share price pain as its major customers (including some of the world’s largest tech platforms) have reduced or ended their contracts.

WiseTech is the inverse story: a genuine beneficiary of complexity in global trade. Its CargoWise platform is the operating system for freight forwarding — used by major global logistics providers across customs, compliance, warehouse management, and cross-border movement. The business benefits from deep switching costs, high recurring revenue, and a global rollout strategy that continues to add customers across new geographies and verticals. WiseTech is not cheap, but the moat is real, the earnings trajectory is intact, and the company is positioned to capture value from every parcel that moves across a border.

Now, we will acknowledge that WiseTech has suffered a 40% drop and investors will have to live with Richard White as CEO. But the high-profile job cuts appear to have caused shares to have finished bottoming out. Appen has grown by over 40% and there were good signs in its results. But the company is a shadow of what it was with revenue roughly half of what it was 5 years ago, and even though there was a 75% jump in revenue from China, this marked a 21% drop in ex-China revenue.