MM purchased Aristocrat (ALL) less than 10-days ago for under $31, pleasingly we are already showing a ~10% paper profit, while our initial target remains at least 10% higher again. This rapid appreciation in stocks is happily prevalent across our portfolios but assuming our forecast for a volatile 2021 is on point when positions look their best investors should consider taking some $$ off the table. We will reassess our ALL position if / when it rallies to fresh post COVID highs.
In these bullish environments its common that stocks literally take it in turns to pop higher, and not just because we’re in the midst of reporting season, fund managers appear to be still sitting on cash and fearful of missing out on market gains hence a hunt for the next big thing is on. Today we have looked for 3 stocks MM believes could rapidly appreciate 20% and potentially be good vehicles to switch our monies from the likes of ALL.
MM remains bullish ALL short-term
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We don’t have to look too far including some of our best performers in the MM Growth Portfolio to see how quickly “hot” stocks can fall out of favour when fund managers decide enough is enough. Over recent weeks the following are just some of the pullbacks, some of which fortunately appear to be over – Xero (XRO) -18.5%, Beach Petroleum (BPT) -23%, Magellan (MFG) -29% and Lend Lease (LLC) -21%.
As we have said at MM 2021 will be characterised by stock & sector rotation plus underlying high market volatility. Hence we anticipate being fairly active this year with selling, which is often most investors largest weakness, necessary to add some real value / alpha to portfolios.
MM remains cautiously bullish Xero
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Today we have briefly looked at 3 ASX200 stocks which appear to have the correct blue print for a decent rally in the months ahead.
