From Dec. 31, 2012, through Dec. 10, 2013, the S&P/Australian Securities Exchange 200 Index posted a price-only gain of 10.6 percent in local currency terms. Including dividends paid pushed the main benchmark Down Under to a total return of 15.3 percent.

That pales in comparison to the 26.4 percent and 29 percent price-only and total return figures for the S&P 500 Index. And it’s softer than the gains posted by Japanese, German and Spanish stocks this year.

Australia looks quite good, however, compared to Canada, the UK and France.

Things look pretty fair to middling, then, when you stack up the Australian share market, as measured by the S&P/ASX 200, versus other major equities markets in local currency terms.

The problem for us US-based investors is that currency movements have a real-world impact. And this year the impact has been sudden and unpleasant.

An aggressive effort by the Reserve Bank of Australia (RBA) to bring down the value of the Australian dollar and thus provide some stimulus to non-resource export sectors of the domestic economy, combined with declining prices for Australia’s major commodity outputs, has led to a decline of 12 percent for the aussie versus the buck from AUD1.0394 on Dec. 31, 2012, to AUD0.9151 as of Dec. 10, 2013.

So in US dollar terms the S&P/ASX 200 is down 2.4 percent on a price-only basis. Including dividends pushes the total return to 1.7 percent.

The RBA’s benchmark overnight cash rate now sits at an all-time low of 2.5 percent, down from 3 percent at the beginning of the year and a post-Great Financial Crisis high of 4.75 percent that held through much of 2011.

It should be noted that the RBA took its benchmark to as low as 3 percent in response to the GFC. Its desire to rein in what had been a rampaging aussie is that strong that its gone to record lows, even though Australia hasn’t suffered a recession since 1991.

The wind-up of certain parts of the US Federal Reserve’s monetary stimulus–namely the potential “taper” of its USD85 billion monthly purchases of mortgage-backed securities–is adding strength to the US dollar at the same time the RBA is easing.

Softer commodity prices, reflected in the RBA’s Index of Commodity Prices, have also weighed on the aussie.

But the long-term value of the Australian dollar continues to be supported by relatively strong domestic economic fundamentals. And, as we’ve noted on many occasions, global central banks continue to add to their Australian dollar-denominated holdings, which builds in a higher floor under the currency than ever before.

We expect that, barring a global financial calamity along the lines of the 2008-09 Great Financial Crisis and Great Recession (the latter of which, it should be noted, Australia was fortunate enough not to participate) the Australian dollar has seen its bottom.

That’s doesn’t mean we’ll see it shoot straight to parity with the US dollar and beyond in 2014. But assuming what appears to be a solidifying US economic situation and a rebounding Chinese economic situation mature into full-fledged and durable recoveries, the world will get nearer its longer-term consumption habits.

And that bodes well for the Australian economy and its currency.

With that in mind, here are notable names from each How They Rate sector, with a look back at what’s happened in 2013 and a look forward at what we anticipate for 2014.

Basic Materials

The Basic Materials group is the only one among the major S&P/ASX 200 Index sub-groups to have posted a negative total return in local currency terms thus far in 2013.

A weaker Australian dollar versus the US dollar or not, it’s been a bad year for most commodities and commodities-related stocks, including producers and servicers.

For 2014, when it comes to playing a turnaround in the Basic Materials space, bigger is better.

Iron ore is better than gold, though exposure to multiple commodities spreads risk, limiting the negative impact of a steep decline in the price of single output. Dr. Copper will follow the global economic growth trend, which appears to be establishing some upside momentum.

Nickel too will respond well to more robust steel-making activity, another indicator of revived global growth.

Above all, however, there is scale. Scale means a company can produce in large quantities across multiple commodities but also that it can more easily adjust output to meet prevailing demand, either up or down.

Scale generally means significantly lower costs, which means moves to the downside for commodity prices will have far less malignant implications for company’s financial situation and its ability to cover interest costs, operating and maintenance expenditures and dividends.

AE Portfolio Aggressive Holdings BHP Billiton Ltd (ASX: BHP, NYSE: BHP) and Rio Tinto Ltd (ASX: RIO, NYSE: RIO) are among the top three mining companies in the world. Both stocks have generated Australian-dollar total returns of about 3 percent thus far in 2013, though both have underperformed the broader S&P/ASX 200.

And in US dollar terms their returns are negative 9 percent.

In response to the global downturn both companies have reined in CAPEX programs and have begun disposing of non-core assets.

And both companies favor “progressive” dividend policies, which recent moves to reduce spending and debt will support for the long term.

Leaner and more focused on core competencies such as iron ore production, BHP and Rio are well positioned to benefit from a return to trend-level global economic growth.

BHP Billiton is a buy up to USD40 on the ASX using the symbol BHP.

BHP’s New York Stock Exchange (NYSE) listing is an American Depositary Receipt (ADR) that represents two ordinary shares traded on the ASX. Buy BHP on the NYSE up to USD80.

Rio Tinto is a buy under USD55 on the ASX using the symbol RIO.

Rio Tinto’s NYSE listing is an ADR ADR that represents one share of the company’s London listing. Rio’s ADR–which also trades under the symbol RIO–is a buy under USD60.

Aggressive speculators can take a look at Atlas Iron Ore Ltd (ASX: AGO, OTC: ATLGF, ADR: AGODY), which is off by more than 30 percent in local terms and nearly 40 percent in US dollar terms in 2013 but reported solid production and demand numbers for the first quarter of fiscal 2014.

Approximately 60 percent of forecast iron ore production for the fiscal year is already under contract, with another 20 percent currently in the end stages of negotiation for sale.

Atlas has only been paying a dividend for three years, and it pays on an annual basis. But overall debt is low, and there are no maturities until 2017.

Atlas Iron Ore is a buy under USD1 on the Australian Securities Exchange (ASX) using the symbol AGO and on the US over-the-counter (OTC) market using the symbol ATLGF.

Atlas also trades on the US OTC market as an ADR under the symbol AGODY. Atlas Iron Ore’s ADR, which is worth five ordinary, ASX-listed share, is also a buy under USD5.

We’ve suffered a huge loss with mining services provider Ausdrill Ltd (ASX: ASL, OTC: AUSDF) since we added it to the Aggressive Holdings in March 2013, about 75 percent.

Our thesis rested on Ausdrill’s exposure to the production as opposed to the exploration aspect of the mining business. It’s also exposed to multiple commodities.

But its gold business has been hit particularly hard this year by the sever rollback in production by producers adjusting cost structures after the spot price of bullion declined, and hard, for the first time in more than a decade.

And iron ore prices have been volatile. All told the 60 percent or so of Ausdrill’s revenue that’s supported by production was also threatened by the mining pullback, and management has had to issue multiple downward revisions to earnings guidance in 2013.

Expansion into oil and gas services will help further diversify the revenue base, but that’s a longer-term story that also depends on a return to real health for the global economy. Hold.

Our top-performing Basic Materials exposure in the Portfolio is Mineral Resources Ltd (ASX: MIN, OTC: MALRF, ADR: MALRY), which combines one of Australia’s most established and well-diversified mining services operations with a burgeoning iron ore production business.

Mineral Resources posted a total return of 2.2 percent in US dollar terms from Dec. 31, 2012, through Dec. 10, 2013, significantly outperforming the negative 23.5 percent average among the 29 companies in the Basic Materials segment of the How They Rate coverage universe.

Mineral Resources management has guided to fiscal 2014 NPAT of between AUD247.8 million and AUD252.8 million, which at the low point represents 37 percent year-over-year growth and at the high point a 39 percent increase.

Mineral Resources is a buy under USD11 on the ASX using the symbol MIN and on the US OTC market using the symbol MALRF.

Mineral Resources also trades on the US OTC market as an ADR under the symbol MALRY. Mineral Resources’ ADR, which is worth one ordinary, ASX-listed share, is also a buy under USD11.

Consumer Goods

The relatively small group of companies that we classify as Consumer Goods in How They Rate has generated a negative total return of 31.7 percent in US dollar terms, worse even than the Basic Materials set’s performance.

The S&P/ASX Consumer Staples Index, however, is 11.5 percent to the positive for the year and down just 2.7 percent in US terms.

Billabong International Ltd (ASX: BBG, OTC: BLLAF, ADR: BLLAY) has basically imploded due to a shift in fashion sense among young people, who no longer favor the company’s surfwear.

A new management team–the third this calendar year–is currently putting together a plan to affect a turnaround. The stock is down by nearly 60 percent.

A brand tied to fashion and lifestyle that depends on the vicissitudes of youth to sustain it is no foundation for a reliable dividend, much less long-term growth.

Even the most aggressive investors should avoid Billabong.

Our favorite among the group, GrainCorp Ltd (ASX: GNC, OTC: GRCLF), has just had its takeover premium wiped out due to a decision by Australian Treasurer Joe Hockey to prohibit Archer Daniels Midland Co (NYSE: ADM) from buying out the company at AUD12.20 per share plus a AUD1 dividend.

We still favor the fundamental case that underpinned our decision to include GrainCorp among the “Eight Income Wonders from Down Under” that comprised the original AE Portfolio in September 2011.

Existing investors should continue to hold their shares.

New investors can buy GrainCorp under USD10 on the ASX using the symbol GNC and on the US over-the-counter (OTC) market using the symbol GRCLF.

Note that we’re adding Coca-Cola Amatil Ltd (ASX: CCL, OTC: CCLAF, ADR: CCLAY) to the How They Rate coverage universe.

The company is one of the largest bottlers of non-alcoholic, ready-to-drink beverages in the Asia-Pacific region and is one of the world’s five major Coca-Cola bottlers. We begin our coverage of Coca-Amatil with a hold rating.

Consumer Services

Media companies Down Under continue to suffer from tepid advertising due to reduced corporate spending, while retailers are experiencing the effects of consumers’ tighter hold on their wallets.

Department store icons David Jones Ltd (ASX: DJS, OTC: None) and Myer Holdings Ltd (ASX: MYR, OTC: MYGSF) are struggling with changing shopping habits and haven’t yet achieved critical mass with their late-to-the-party efforts to establish compelling Internet experiences.

Specialty electronics retailer JB-HiFi Ltd (ASX: JBH, OTC: JBHIF) has managed to step out from the pack of its peers, as an industry-low cost of doing business, still-high interest in electronic gadgets and the successful rollout of an online presence that’s allowing it to compete with other digital download sites have driven solid operating and financial results and spectacular outperformance for its share price.

The stock is up more than 70 percent in 2013 but remains a buy under USD18 due to management’s guidance for continuing strength in fiscal 2014.

Amalgamated Holdings Ltd’s (ASX: AHD, OTC: None) fiscal 2014 first-quarter results were hampered by terrible skiing conditions at its Thredbo alpine resort. But Australia’s largest movie-theater operator with a strong cinema presence in Germany continues to benefit from Hollywood’s ability to churn out box-office-driving “tentpole” franchises, and management has made an effective effort to update the group’s theaters with technology that enables premium pricing.

Aggressive Holding Amalgamated Holdings is a solid buy under USD8.

We added Crown Resorts Ltd (ASX: CWN, OTC: CWLDF, ADR: CWLDY) to the Aggressive Holdings last month because its assets in Melbourne and Perth continue to deliver solid and relatively defensive earnings. These assets are the company’s main cash flow generators, and there is some concentration risk.

Crown’s 33.7 percent stake in Macau-based Melco Crown Entertainment Ltd (Hong Kong: 6883, NSDQ: MPEL) represents a growth opportunity based on China’s rapidly emerging middle class, and future dividend flows from Melco Crown will bring some diversification.

Crown Resorts is a buy all the way up to USD16.50 on the ASX using the symbol CWN and on the US OTC market using the symbol CWLDF.

Crown Resorts also trades on the US OTC market as an ADR under the symbol CWLDY. Crown Resorts’ ADR, which is worth two ordinary, ASX-listed shares, is also a buy under USD33.

We’re similarly impressed by global education services provider Navitas Ltd’s (ASX: NVT, OTC: NVTZF) exposure to China’s middle class.

Navitas’ education programs in its base country are certainly attractive to middle-class Chinese parents.

Demand for international education continues to grow, with the number of students enrolled outside their country of citizenship rising from 2.1 million worldwide in 2000 to 4.3 million in 2011. This is largely due to the growing wealth of the middle class in developing countries such as China and shortfalls in institutions of higher learning in these regions.

Navitas has also received notification from the University of Massachusetts that restrictions on recruiting undergraduate students from China were to be officially lifted at Navitas’ three UMass colleges as of Nov. 1, 2013.

This should help boost placements by its EduGlobal unit and lift overall financial results. EduGlobal, one of the largest student recruitment agencies in China, has 23 offices across the Middle Kingdom through which it recruits, counsels and enrolls more than 3,500 students per year at some of the most reputable study institutions in Australia, the US, the UK and Canada.

Navitas is a buy up to USD6 on the ASX using the symbol NVT and on the US OTC market using the symbol NVTZF.

Financials

Australia & New Zealand Banking Group Ltd (ASX: ANZ, OTC: ANEWF, ADR: ANZBY) and its “Four Pillars” peers continue to post solid results and consistent dividend growth. Australia’s stabilizing housing market should provide the impetus for mortgage growth in 2014.

The softer Australian dollar has clearly had a negative impact on 2013 total returns for US investors who own Australia-based dividend-paying stocks. But the currency’s decline has had an undoubtedly positive impact on ANZ’s and its peers’ balance sheets because of effective hedging strategies.

Under cross-currency swaps linked to debt issued in foreign markets, counterparties return collateral as the currency falls, giving the bank “an immediate cash in-flow,” said ANZ Treasurer Rick Moscati in a June 2013 interview with Bloomberg News. “It actually reduces the amount of debt you need to issue offshore.”

Australia’s banks rely on overseas markets for as much as 70 percent of their debt funding and the positive impact on their balance sheets from the currency’s fall far outweighs any negative effects, according to Mr. Moscati.

ANZ also has the best exposure to China among Australia’s four biggest banks, and it continues to report solid financial and operating numbers, rooted in its strong domestic franchise.

The bank reported statutory net profit after tax (NPAT) of AUD6.3 billion for fiscal 2013 and a cash profit after tax of AUD6.5 billion, both figures up 11 percent versus fiscal 2012. Australia’s third-largest bank by market capitalization declared a final dividend of AUD0.91 per share, taking the total dividend for fiscal 2013 to AUD1.64, a 13 percent increase over fiscal 2012.

Customer deposits grew by 12 percent, with net loans and advances up 10 percent.

Credit quality improved further, with gross impaired assets down 18 percent and provision charges down 5 percent.

Return on equity (ROE) for the year was up 20 basis points (bps) to 15.3 percent. ANZ invested more than AUD1.3 billion in growth and transformation initiatives across the bank during the year, including the “Banking on Australia” program and expansion in Asia.

Australia & New Zealand Banking Group is a buy under USD34 on the ASX using the symbol ANZ and on the US OTC market using the symbol ANEWF.

ANZ also trades on the US OTC market as an ADR under the symbol ANZBY. ANZ’s US OTC-traded ADR represents one ordinary, ASX-listed share. ANZ’s ADR is a buy under USD34.

Australia’s real estate investment trusts (A-REIT) haven’t suffered as much as their Canadian and US counterparts amid the rising fear about consequences of the US Federal Reserve’s “tapering” of its USD85 billion per month mortgage-backed security purchases.

Canadian and US REITs had, however, posted stronger recoveries in the aftermath of the Great Financial Crisis, while A-REITs had and continue to trade right around net tangible asset value (NTA).

Conservative Holding GPT Group (ASX: GPT, OTC: GPTGF) management has guided to 6 percent earnings per share growth for 2013 and reiterated its targeted 80 percent payout ratio based on realized operating income. Occupancy across the portfolio was 96.8 percent as of Sept. 30, 2013.

We have more on GPT and its effort to gain control of fellow A-REIT Commonwealth Property Office Fund (ASX: CPA, OTC: CWHPF) in this month’s Portfolio Update.

GPT Group remains a buy under USD4.

Fellow Conservative Holding Australand Property Group (ASX: ALZ, OTC: AUAOF), meanwhile, has one of Australia’s most valuable commercial portfolios, including 47 industrial properties and 13 office towers, mainly along Australia’s eastern seaboard.

Management has guided to full-year operating earnings growth of 3 percent to 4 percent, with stronger performance during the second half of 2013 supported by secured residential sales and industrial developments currently in progress.

The company posted solid operating results for the first half despite heavy residential headwinds. And there is a strong possibility that the value of its office and industrial assets will be recognized through an M&A transaction. Australand is a buy under USD3.60.

Health Care

This group has posted solid gains in 2013, with New Zealand-based respiratory products maker Fisher & Paykel Healthcare Ltd (ASX: FPH, OTC: FSPKF) leading the way with a 55.5 percent US dollar total return through Dec. 10.

Fisher & Paykel continues to roll out innovative equipment for use by patients that suffer from maladies such as sleep apnea, and it occupies a leading position in a market that will see sharp growth as emerging economies step up health care spending and more people become aware of potential treatments for breathing ailments.

The only problem with the stock right now is price, as it’s been on a long and sustained run.

AE Portfolio Conservative Holding Ramsay Health Care Ltd (ASX: RHC, OTC: RMSYF) has also posted a solid year to date, with a total return of 27.5 percent, while biopharmaceutical company and fellow Conservative Holding CSL Ltd (ASX: CSL, OTC: CMXHF, ADR: CMXHY) is 11.5 percent to the positive.

Ramay is expanding its operations in Greater Asia as well as in Europe and the UK, as it capitalizes on an aging global population. Trends for private hospitals are solid not only in Asia but in more mature markets as well, and Ramsay has demonstrated its ability to expand while implementing cost-control measures that preserve margins.

With a strong balance sheet and conservative financial practices Ramsay Health Care is well positioned to build wealth for investors for the long term.

Ramsay Health Care is a buy under USD38 on the ASX using the symbol RHC and on the US OTC market using the symbol RMSYF.

CSL, the world’s second-biggest maker of blood-derived therapies, has guided to 10 percent profit growth for fiscal 2014, while per-share earnings will increase more due to the repurchase of AUD869 million worth of stock.

The market responded negatively to CSL’s guidance, as it represents a slowdown from the 19 percent growth posted for fiscal 2014. We continue to be impressed by the double-digit rate and the double-digit rate of dividend growth.

CSL is a buy under USD58 on the ASX using the symbol CSL and on the US OTC market using the symbol CMXHF.

CSL also trades on the US OTC market as an ADR under the symbol CMXHY. CSL’s ADR, which represents 0.5 of an ordinary, ASX-listed share, is a buy under USD29.

Industrials

The Industrials group is exposed to several different pockets of global and domestic weakness, with mining and energy engineering services providers suffering due to the slowdown in capital spending in those sectors and building suppliers caught in the Australian housing market pause.

All told, the 18 disparate companies included in the Industrials group in the How They Rate coverage universe generated an average total return of negative 11.2 percent from Dec. 31, 2012, through Dec. 10, 2013.

Our top pick remains toll road owner/operator Transurban Group (ASX: TCL, OTC: TRAUF), which owns assets in high-traffic central business districts in Australia and in the Washington, DC, metropolitan area in the US.

Traffic and revenue numbers for the first quarter of fiscal 2014, ended Sept. 30, 2013, reflected the strongest quarterly toll revenue growth in percentage terms since the second quarter of fiscal 2011.

Transurban continues to add assets build wealth for shareholders, with management guiding to a fiscal 2014 distribution of AUD0.34 per security, which management expects will be 100 percent covered by free cash flow. This represents a 9.7 percent increase over the AUD0.31 paid for fiscal 2013.

Transurban Group is a buy below USD6.50.

Fellow Conservative Holding Cardno Ltd (ASX: CDD, OTC: COLDF) has struggled with the pullback in spending across the global energy and mining sectors, but recent mergers and acquisitions as well as the diversity of its professional engineering and consulting services have allowed the company to maintain its dividend.

Management has noted the continuing difficulties with the Australian market, but it is active on several oil and gas and housing projects. The uptick in US economic growth bodes well for the company, which has bolted on several niche engineering firms in North American in recent years.

Cardno remains a buy under USD8.05.

This month we’re adding Sydney Airport (ASX: SYD, OTC: SYDDF) to the Aggressive Holdings, which owns and operates what is quite literally the gateway to Australia for many travelers from around the world, including in increasing numbers members of China’s rapidly growing middle class.

Sydney Airport is a buy up to USD4 on the ASX using the symbol SYD and on the US OTC market using the symbol SYDDF.

For more on Sydney Airport see this Sector Spotlight.

Non-Portfolio favorites include paint maker DuluxGroup Ltd (ASX: DLX, OTC: DULUF), which has posted double-digit revenue and earnings growth on recent acquisitions. DuluxGroup is a buy under USD5.

Toll Holdings Ltd (ASX: TOL, OTC: THKUF, ADR: THKUY), meanwhile, is Australia’s largest transport company, offering logistics services to several domestic sectors, including mining and government and defense, as well as customers throughout the Asia-Pacific region, freight-forwarding and advanced supply-chain management services, express freight operations for the region and in Australia and specialized freight services.

Toll has experienced some difficulties related to domestic, regional and global economic uncertainty of late, but management expects fiscal 2014 earnings to improve over fiscal 2013. And the first quarter of the fiscal year supported management’s guidance.

Toll Holdings is a buy under USD6.50 on the ASX using the symbol TOL and on the US OTC market using the symbol TKHUF.

Toll also trades on the US OTC market as an ADR under the symbol THKUY. Toll’s ADR, which represents two ordinary, ASX-listed shares, is a buy under USD13.

More aggressive investors should focus on Bradken Ltd (ASX: BKN, OTC: BRKNF) as a high-yield play on a turnaround for mining services firms.

Oil and Gas

Australia’s anticipated liquefied natural gas (LNG) boom is in question due to rising project costs, project delays and the twin competitive threat represented by the US shale gas boom, the vast reserves available in Canada and the desire of North American producers to satisfy Asian demand.

Aggressive Holding Woodside Petroleum Ltd (ASX: WPL, OTC: WOPEF, ADR: WOPEY) is already enjoying the benefits of its Pluto LNG project, which has driven solid output and earnings growth for fiscal 2013 as well as a stepped-up dividend policy.

Woodside also has a mix of other potential expansion projects within its portfolio, is expanding its international footprint to diversify away from growing costs at home and has the balance sheet to support its ambitions.

Woodside reported net profit after tax (NPAT) of USD873 million for the first half of 2013, up 7.5 percent compared to the first half of 2012. Management declared an interim dividend of USD0.83 per share, up 27.7 percent compared to the 2012 interim dividend.

Woodside Petroleum is a buy under USD42 on the ASX using the symbol WPL and on the US OTC market using the symbol WOPEF.

Woodside also trades as an ADR on the US OTC market under the symbol WOPEY. Woodside’s ADR is also a buy under USD42.

Another top pick in the LNG space is Oil Search Ltd (ASX: OSH, OTC: OISHF, ADR: OISHY), which owns 29 percent of the key Papua New Guinea LNG project.

When PNG LNG comes online, Oil Search’s output will quadruple to 25.6 million barrels of oil equivalent in 2015 from 6.4 million in 2013. And production may reach 35.6 million barrels by 2020. Oil Search owns 29 percent of PNG LNG.

Revenue is projected to rise 234 percent to USD2.42 billion by 2015, from USD725 million in 2012, faster growth than any of the 33 other exploration and production companies with a market value of over USD10 billion for which estimates are available, according to data compiled by Bloomberg. The overall group is projected for average sales growth of 49 percent.

And Oil Search’s estimates, courtesy of Goldman Sachs, don’t include the potential for expansion to a third and fourth train.

The project is on track to post first LNG sales in 2014 and to come in within the USD19 billion budget established in November 2012.

Oil Search is a buy under USD8 on the ASX using the symbol OSH and on the US OTC market using the symbol OISHF.

Oil Search also trades as an ADR on the US OTC market under the symbol OISHY. Oil Search’s ADR represents 10 underlying shares traded on the ASX and is a buy under USD80.

Technology

Changes in spending habits have been the driving factor behind financial and operating and share-price performance for the Technology group.

For some declining fortunes are explained by broader trends at the corporate and government level in Australia. One company has been hit hard by gold’s first yearly decline in more than a decade. And another is still sorting through the consequences of bad business practices in a key US market.

SMS Management & Technology Ltd (ASX: SMX, OTC: SMSUF, ADR: SMSUY) management guided for a decline of 20 percent to 25 percent for fiscal 2014 first-half net income versus the second half of fiscal 2013 due to one-time charges for redundancies and acquisition costs as well as its withdrawal from a contract.

SMS continues to suffer amid a pullback in spending among corporations and governments in Australia. Management expressed confidence in a stronger second half on the contribution of recent acquisitions contribution and a better utilization rate.

SMS remains a buy up our reduced target of USD4.50 on the ASX using the symbol SMX and on the US OTC market using the symbol SMSUF.

SMS also trades as an ADR on the US OTC market. SMS’ ADR, which is worth two ordinary shares, is a buy under USD9.

Codan Ltd’s (ASX: CDA, OTC: CODAF) strong run has been snuffed out by the sharp decline in the price of gold and a subsequent slide in sales of its primary metal detector product in its key African markets. Hold.

Iress Ltd (ASX: IRE, OTC: None) has managed a solid 8.5 percent total return in 2013, as results make clear that even as corporations keep a tight lid on spending its financial markets and wealth management software and systems have helped it establish a durable niche. Buy under USD9.

The sordid dealings of former employees with officials of the City of Chicago continue to loom over vehicle monitoring and enforcement services outfit Redflex Holdings Ltd (ASX: RDF, OTC: RFLXF).

Winning new red-light and speeding camera business has been difficult amid the ongoing investigation of bribery allegations, as opposition to such surveillance among the public has also risen. And there is still no definitive word on what the Chicago investigation will cost, not to mention the knock-on impact on company finances due to the hit to its reputation. Sell.

Telecommunications

Telecoms have been solid performers in local as well as US terms, posting an average total return of 15.5 percent.

The still-ravenous hunger for constant connectivity and data on the consumer side and the rising demand for network-hosted solutions on the business side will continue to drive growth for this group in 2014.

We’ve boosted buy-under targets for two companies under How They Rate coverage, Amcom Telecommunications Ltd (ASX: AMM, OTC: ATMUF) and Singapore Telecommunications Ltd (Singapore: ST, ASX: SGT, OTC: SNGNF, ADR: SGAPY).

Amcom is now a buy under USD1.80 based on its record of double-digit revenue and earnings growth.

SingTel is a buy under USD2.90, or USD29 using the ADR, to bring our target in line with our target in AE’s sister advisory Utility Forecaster.

We’ve also raised Telecom Corp of New Zealand (New Zealand: TEL, ASX: TEL, OTC: NZTCF, ADR: NZTCY) from sell to hold due to the fact that it’s finally unloaded its stake in Australia-based telecommunications infrastructure company AAPT and its 11,000 kilometers of fiber, agreeing to sell the unit to TPG Telecom Ltd (ASX: TPM, OTC: None) for AUD450 million.

Our tip picks among the group remain Conservative Holdings Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY), widely regarded as the AT&T/Verizon of Australia, and M2 Telecommunications Group Ltd (ASX: MTU, OTC: MTCZF), a smaller company that’s grown rapidly in recent years via mergers and acquisitions.

Telstra continues to extend its wireless advantage through unmatchable network investment.

The dominant wireless services provider Down Under has a stable and growing customer base, which is devouring more and more data via Telstra’s high-quality infrastructure.

Network Applications and Services, Telstra’s fastest-growing unit, is focused on expanding into international markets, particularly in Asia. Management is currently negotiating the establishment of delivery centers in conjunction with industry partners that will enable the delivery of “cloud” computing services in India.

Telstra continues to implement its agreements related to the National Broadband Network and “will continue to work constructively in the best interests of shareholders and seek to maximize the value of those agreements as the project progresses.”

Telstra is a buy on dips to USD4.60 on the ASX using the symbol TLS and on the US OTC market using the symbol TTRAF.

Telstra also trades on the US OTC market as an ADR under the symbol TLSYY. Telstra’s ADR, which is worth five ordinary, ASX-listed shares, is a buy under USD23.

M2 provides telecom services to residential and business in Australia and New Zealand via its Retail and Wholesale units, targeted particularly to small and medium-sized enterprises as well as Australian households.

M2 offers fixed line voice services, including line rental services, mobile voice and data services, terrestrial dial-up and high-speed broadband Internet services as well as mobile telephone hardware. The Wholesale unit offers the same suite of services and product to the reseller market at wholesale rates.

M2 is on track to grow revenue by 47 percent, EBITDA by 48 percent and underlying NPAT by 54 percent in fiscal 2014 compared to fiscal 2013. In recent years the company has consistently boosted its annual dividend at double-digit rates.

M2 is a solid buy for long-term growth and income under USD5.85.

Utilities

Power demand Down Under has slackened, and competitive pressures have also dragged on earnings and guidance for Portfolio Holdings AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY) and Origin Energy Ltd (ASX: ORG, OTC: OGFGF, ADR: OGFGY), Australia’s top two electricity providers.

Longer-term prospects for both companies remain bright. Australia is still tightly tied to the fastest-growing region in the world, emerging Asia, which will continue to have positive effects for the domestic economy for decades to come.

AGL and Origin are well placed to benefit from an improvement over time in Australian retail gas and electricity markets through the process of ongoing deregulation and tightening in wholesale generation markets later in the decade.

AGL has developed a balanced portfolio of generation assets to provide competitive sources of energy, not only to its substantial commercial and industrial customer base but also to its retail customers that now total some 3.85 million accounts.

In addition to the largest portfolio of renewable electricity generators in Australia AGL is also positioned to profit from a strong portfolio of gas contracts and gas storage facilities.

Origin, meanwhile, will soon reap the benefits of its 37.5 percent stake in the Australia Pacific LNG project. The project recently reached an agreement to share feedstock gas with the nearby Gorgon LNG project, a closer collaboration among coal-seam-gas-to-LNG companies that reduces risk profiles and will keep costs down.

AP LNG remains on track to come in at the current AUD24.7 billion budget and deliver first gas in mid-2015.

Origin has diverse operations spanning the energy supply chain, from oil and gas exploration and production to power generation and energy retailing. The company’s retail transformation and cost reduction programs are set to contribute improved operating performance in the Energy Markets business over the coming years.

Market conditions for energy retailers are slowly improving. Though conditions will remain tough in fiscal 2014, recovery should take hold in fiscal 2015 and accelerate in fiscal 2016.

Now’s a good time to establish positions at deep value and collect dividends that are still backed by significant and stable cash flows.

AGL Energy is a buy up to USD17.25 on the ASX using the symbol AGK and on the US OTC market using the symbol AGLNF.

AGL Energy also trades on the US OTC market as an ADR under the symbol AGLNY. AGL’s ADR, which is worth one ordinary, ASX-listed share, is also a buy under USD17.25.

Origin Energy is a buy up to USD15 on the ASX using the symbol ORG and on the US OTC market using the symbol OGFGF. Origin Energy also trades on the US OTC market as an ADR under the symbol OGFGY. Origin’s ADR, which is worth one ordinary, ASX-listed share, is also a buy under USD15.

APA Group’s (ASX: APA, OTC: APAJF) effort to acquire the 67 percent of Envestra Ltd (ASX: ENV, OTC: EVSRF) it doesn’t already own seems to have stalled, as management has wisely refused to up its initial bid.

It’s this type of prudence that’s allowed APA–the largest owner/operator of natural gas infrastructure in Australia–to grow its asset base while generating solid returns for investors.

Envestra is expected to see profit growth of 66 percent over the next couple years, which will benefit APA whether it gets to 100 percent ownership or not. And its existing portfolio is set for significant long-term growth as well.

APA Group is a buy under USD6.50 on the ASX using the symbol APA and on the US OTC market using the symbol APAJF.