SkyCity, Trade Me and Telecom are the best investment opportunities on New Zealand's share market, according to Morningstar.
The research firm said the New Zealand market was looking fairly valued and investors should be cautious and stock selective.
But it also said there were still opportunities to be found in the telecommunications, gaming and consumer sectors.
Top of its list is casino operator Sky City Entertainment Group.
Analyst Nachi Moghe said Sky City's shares were trading at a healthy discount to its intrinsic value.
"The company has high returns on capital and generates copious free cash flow. We believe the expansion of Adelaide and Auckland will provide a platform for growth during the next several years and augment shareholder value."
Moghe also likes online auction business Trade Me Group for its strong brand equity, limited competition and ability to capture the move to trade online.
"... the firm has a powerful business model driven by the network effect - more buyers attract more sellers which attract more buyers and so on. As a result, Trade Me needs only modest investment to sustain exceptional returns, making it a compelling investment proposition at the right price."
Moghe said he saw strong growth opportunities, especially in classifieds and new goods business.
Morningstar has accumulate recommendations on both Sky City and Trade Me and a hold recommendation on Telecom.
Moghe said he believed Telecom was undervalued with management's turnaround strategy not factored in at the current price.
"Initial signs are promising with market share stabilising in fixed broadband and evidence of subscriber growth in mobile."
On a sector basis Moghe said electricity stocks appeared cheap with Mighty River Power his preferred pick of the bunch and the strong economy was buoying the property sector.
But he warned the market's love affair of healthcare stocks including Ryman Healthcare, Fisher & Paykel Healthcare and Ebos Group could turn sour if valuations fall.
"We believe the share prices of New Zealand health-care stocks are more than pricing in the growth prospects and valuations appear stretched at the moment.
"While we see no imminent catalysts for repricing, other than rich valuations, we believe investors should be cautious and wait for a decent pull-back before initiating positions."
• SkyCity Entertainment Group
• Trade Me Group