{"id":5321,"date":"2024-02-03T07:30:34","date_gmt":"2024-02-03T07:30:34","guid":{"rendered":"https:\/\/economicherald.net\/?p=5321"},"modified":"2024-02-03T07:30:34","modified_gmt":"2024-02-03T07:30:34","slug":"sunday-roast-the-stocks-that-lit-a-fire-under-our-experts-this-week-13","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=5321","title":{"rendered":"SUNDAY ROAST: The stocks that lit a fire under our experts this week"},"content":{"rendered":"

Australian Ethical<\/h2>\n

Mark Williams, portfolio manager<\/strong><\/p>\n

While he\u2019s all set for another year of uncertainty on the markets, Williams is putting his eggs in the \u201cpathway downwards for interest rates\u201d basket.<\/p>\n

Specifically, potential growth in the healthcare and technology sectors.<\/p>\n

\u201cIt will be interesting to see if that plays out or not and if it does, there\u2019s potential for growth sectors of the market \u2013 which have seen challenging times in the last year or two \u2013 to outperform again,\u201d he says.<\/p>\n

\u201cOn the resources front, lithium is an interesting one \u2013 in the short term, the spot price very much dictates sentiment but we\u2019re pretty confident about the long-term demand thematic around the lithium batteries,\u201d he says.<\/p>\n

With that in mind, he reckons these three stocks are trading at attractive lows.<\/p>\n

Pilbara Minerals (ASX:PLS \u2013 $3.46, $10.43bn MC):<\/a> The Williams approach to the lithium market? Focus on companies that are in production.<\/p>\n

\u201cIt\u2019s an important aspect to consider if you think about the type of cycle markets are in at the moment,\u201d he says.<\/p>\n

\u201cPilbara Minerals have been in production for a couple of years, and they\u2019ve generated significant free cash flow, which means their balance sheet is strong as opposed to the likes of Liontown, for example, who are really struggling.<\/p>\n

\u201cWhen you\u2019ve got lithium markets and spot prices failing dramatically, those that are either not quite in production or just getting to that point find themselves in a difficult situation,\u201d he says.<\/p>\n

Sitting with $2.1b on the balance sheet also gives PLS a lot of flexibility to manage this type of downturn, William adds.<\/p>\n

\u201cThis is exactly what we saw in the last downturn in 2019 heading into early 2020 \u2013 just having that balance enabled them to get through and acquire the Altura business next door to them, which is now helping them build scale into the business,\u201d he says.<\/p>\n

ResMed (ASX:RMD \u2013 $29.10, $17.7bn MC):<\/a> CPAP specialist at the larger end of town but popping up on a lot of traders\u2019 radars after copping a brutal selldown last year in the wake of the weight-loss drug craze.<\/p>\n

\u201cThe theory with obesity drugs is that if they are wildly successful and obesity levels drop broadly for the population, then there\u2019ll be less sleep apnoea conditions in the market because sleep apnoea is quite often triggered by overweight or obesity,\u201d Williams says.<\/p>\n

\u201cWe\u2019ve concluded that the impact was overstated and so we saw it as a good opportunity to get an exposure to it.\u201d<\/p>\n

Williams reckons there\u2019s opportunity for a rebound as the market comes to appreciate that in the shorter term, these drugs aren\u2019t having any impact on ResMed\u2019s business.<\/p>\n

Gentrack (ASX:GTK \u2013 $6.12, $630m MC):<\/a> A $600m small cap utility billing software company providing processes for energy companies like Energy Australia.<\/p>\n

\u201cWe really like this stock, we\u2019ve been in Gentrack for a couple of years,\u201d Williams says. \u201cThey\u2019ve got a new management team that has shaken up the organisation and driven some pretty significant change through the business to the point where it\u2019s now growing very strongly.\u201d
\n\u00a0<\/p>\n

Barry FitzGerald<\/h2>\n

Finally, the uranium price has taken a breather, settling back at $US100\/lb from the recent peak of $US106\/lb.<\/p>\n

Was it all a bit overdone? We\u2019ll find out again soon, because the world\u2019s two biggest producers, Kazakhstan\u2019s Kazatomprom and Canadian giant Cameco, are ready to update their 2024 guidance.<\/p>\n

The pair control about 64% of global mine supply and if indications play out and production guidance comes in lower than expected, upward pressure could quickly return to the spot market.<\/p>\n

Longtime uranium watcher Shaw and Partners says price increases do not appear to be driven by panic buying and has upgraded its uranium price forecast to peak pricing of $US150\/lb in 2025\/26\/27.<\/p>\n

If you\u2019re looking to get in on the smaller market cap side of things, Garimpeiro\u2019s got a couple of names. <\/p>\n

Alligator (ASX:AGE \u2013 0.075c, $289m MC) <\/a>has its Samphire project in uranium friendly South Australia, where \u201cquality and scale of the resource continues to grow\u201d. It also has plenty of cash on hand to step things up in 2024.<\/p>\n

It\u2019s also recently put its foot valuable in-situ recovery (ISR) expertise by taking up a position in the unlisted EnviroCopper which has been working up two oxide copper ISR projects in SA.<\/p>\n

And ASX-listed Canadian uranium exploration specialist 92 Energy (ASX:92E \u2013 57c, $61m MC)<\/a> was a 36c stock in December when it announced its involvement in a three-way merger with Canadian companies ATHA and Latitude, with ATHA taking charge of the enlarged group.<\/p>\n

It\u2019s now around 57c. Of interest to Garimpeiro is the ATHA scrip which has been performing well in response to the merger news. So much so that a big arbitrage has opened up between 92E\u2019s share price and the imputed value of the ATHA scrip offer.
\nThe views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.<\/p>\n

<\/span><\/p>\n

The post SUNDAY ROAST: The stocks that lit a fire under our experts this week<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Australian Ethical Mark Williams, portfolio manager While he\u2019s all set for another year of uncertainty on the markets, Williams is putting his eggs in the [more…]<\/a><\/p>\n","protected":false},"author":0,"featured_media":319,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-5321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nSUNDAY ROAST: The stocks that lit a fire under our experts this week - Economic Herald<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/economicherald.net\/?p=5321\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SUNDAY ROAST: The stocks that lit a fire under our experts this week - 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