Feeling brave? It\u2019s come to Garimpeiro\u2019s attention that nickel stocks are now trading at give-away prices \u2013 explorers, developers and producers alike.<\/p>\n
No surprise really, given half the global industry is making a loss at current prices. <\/p>\n
Blame that on a flood of Chinese-backed Indonesian upgraded nickel from laterite sources (Twiggy would say \u201cdirty\u201d) on to the Chinese-owned London Metal Exchange platforms.<\/p>\n
Suddenly it seemed the world was awash with nickel suitable for use in the high-growth battery market. Even BHP is thinking about shuttering its 80,000tpa Nickel West operation.<\/p>\n
Garimpeiro, ever the optimist (it\u2019s all a Bombers fans has to hang onto), believes it\u2019s always darkest before the dawn. And here we are, with the nickel price picking itself up to climb 13% higher since its February low.<\/p>\n
BHP\u2019s view is the nickel market could be over-supplied to the end of the decade. But it also agrees with Twiggy, saying the LME has to lift its game if its Responsible Sourcing of LME-Listed Brands policy is to be taken seriously.<\/p>\n
So this is a conversation about \u201cclean\u201d battery metals, and surely nickel is one such with an unchallenged growth in demand profile.<\/p>\n
\u201c\u2019Clean\u2019 nickel\u201d, Garimperio says, is not in a positionl to command a premium \u2013 yet. \u201cBut there is a real chance that governments in Europe and North America will seek to protect their nickel miners through tariffs and the like, in the name of good ESG policy of course.\u201d<\/p>\n
He prefers the view of Macquarie\u2019s veteran nickel watcher Jim Lennon who\u2019s revised surplus estimate actually points to a supply deficit in 2024.<\/p>\n
\u201cA major change from our recent forecasts,\u2019\u2019 Lennon said.<\/p>\n
Garimpeiro prefers the Macquarie take. Surely the only way is up? (How long can an AFL team go between flags?)<\/p>\n
These four ASX juniors that \u201call have big nickel resources under their belt and will be called on eventually to get in to production\u201d. <\/p>\n
A couple have even moved nicely higher since their early February lows. <\/p>\n
Centaurus (ASX:CTM):<\/a> Trading mid-week at 26.5c for a market cap of $133m. Was a 28c stock at the start of February and is long way off its 52-week high of 98c.<\/p>\n Alliance (ASX:AXN):<\/a> Trading mid-week at 3.7c for a market cap of $25m. Has come up from 3.2c at the start of February but remains well short of is 52-week high of 15c. <\/p>\n Ardea (ASX:ARL):<\/a> Trading mid-week at 51.5c for a market cap of $97.5m. Has come up from 37c at the start of February. Still, it is down from a 12-month high of 75c last August.<\/p>\n Aston (ASX:ASO):<\/a> Trading mid-week at 1.6c for a market cap of $20m. It is steady on its market price at the start of February and remains well short of its 52-week high of 14c. Chief analyst, Wealth Within<\/em><\/p>\n \u201cWhether you do or don\u2019t like or use artificial intelligence technology, we can all agree that it\u2019s here to stay.\u201d<\/p>\n Dale Gillham is bullish on all things AI. Well, three things at least \u2013 Appen, NextDC and BrainChip. We\u2019ll get to them in a minute.<\/p>\n First of all\u2026 why, Dale?<\/p>\n \u201cAccording to projections, AI spending in Australia is expected to reach US6.4 billion by 2026, contributing to an estimated AU$22.7 trillion boost to the global economy by 2030.<\/p>\n \u201cFrom an investment viewpoint, if this sector can perform in Australia even remotely close to its American neighbour, then we might well be staring at a future goldmine for early investors.\u201d<\/p>\n Okay, our ears are on Dale. Who\u2019s on your radar?<\/p>\n Appen (ASX:APX \u2013 63c, $140m MC):<\/a> APX provides data tools and services to global market players to aid with such things as workflow management, data organisation, performance analysis and A\/B testing.<\/p>\n FY23 wasn\u2019t great, with revenue falling to $US273, while new markets revenue of US$81.5 million was down 7.8% which the company put down to a $46.5m drop from global product.<\/p>\n New CEO and managing director Ryan Kolln prefers to see 2023 as \u201ctransitional\u201d.<\/p>\n \u201cThe mainstream availability of generative AI created huge interest for our customers but also resulted in many reevaluating their AI investments,\u201d he says.<\/p>\n However, Kolln says FY24 is looking up for APX with \u201cnew products \u2026 focused on generative AI applications\u201d.<\/p>\n Gillham admits it\u2019s \u201cjust too early right now to invest\u201d in APX, but if you\u2019re confident in Kolln\u2019s belief that revenue will \u201cstabilise\u201d in 2024, you\u2019ll pick APX up at an all-time low.<\/p>\n \u201cThe potential upside for investors in this stock is astronomical if Appen can get things right,\u201d Gillham says.<\/p>\n NextDC (ASX:NXT \u2013 $16.85, $8.6bn MC):<\/a> Rack spaces, private cages, private suites and remote hands \u2013 who said data wasn\u2019t sexy?<\/p>\n NXT is Australia\u2019s leading data centre company, with 13 centres across several countries and a partnership with Microsoft.<\/p>\n Its H1 FY24 saw total revenue increase by 31% to $209.1m. Underlying EBITDA was up by 5% to $102m.<\/p>\n The company says it remains well capitalised to take advantage of its strong forward sales pipeline, as well as to continue to build its forward sales and earnings outlook.<\/p>\n With a share price currently trading at an all-time high, this is another AI stock Gillham\u2019s not ready to jump into right now, but \u201cwill be watching it like a hawk, waiting for the next opportunity\u201d.<\/p>\n BrainChip Holdings (ASX:BRN):<\/a> Gillham says BRN is at the forefront of AI reasoning and analysis and most notably, is known for its Akida Neuromorphic Processor.<\/p>\n Tthe company is forecasting it will be operating in a market worth over US$1 trillion by 2030.<\/p>\n \u201cTo add further good news, it has posted one of its best months in recent history, up over 150% for the month of February.<\/p>\n \u201cUnlike NXT, however, which is trading at its all-time high, I believe BRN has plenty more upside potential in the short to medium term; therefore, this is one to watch very closely.\u201d <\/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":"
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\n<\/strong><\/p>\nDale Gillham<\/h2>\n
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\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.<\/em><\/p>\n