MM’s views on ASX sectors and specific companies please

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Question asked 24/02/2024

MM’s views on ASX sectors and specific companies please

Hi James and team, Thank you for the informative reports which I look forward to reading everyday, especially the forward looking portfolio positioning segment. I would appreciate your views on sector strengths and weaknesses for the ASX over the course of 2024 (eg. resources/tech/domestic retailing), gold miners v. physical gold, and specific companies in CAR, REA, JBH, AX1. Also, do you have a view on the reason for the strength of SFR versus the general copper sector and FCX? I've been looking to add and hope there will be an opportunity over the course of the year. Thank you again for keeping us on track. Adel

Answer

Hi Adel,

Wow, a big question, almost worth 1-2 morning reports! I have answered with a few bullet points that hopefully dovetails with our recent morning reports.

Sandfire Resources (SFR) continues to outperform both copper and FCX, we touched on it on Friday, we like copper and aren’t keen to fight the trend at this stage, but it will be interesting to see how the stock trades over the coming sessions with a bit of selling about on Fridays report. Sub $7 seems good buying.
Gold miners continue to underperform the underlying precious metal, we believe they will play some catch up if the Fed eventually starts cutting rates and gold prices turn more bullish, miners will have an amplified move on the upside, especially if this coincides with improved operational performance which by in large, has disappointed. We like the sector through 2024/5 but it feels too early to go very overweight.
Sector rotation is often a focus at MM, we have been looking for the resources to play some catch up to tech through 2024 BUT for now its “business as usual”, especially after the knockout result from Nvidia (NVDA US).
Of the four stocks mentioned, CAR, REA, and JBH have all made fresh all-time highs this month and we must remain cautiously bullish at this stage even if the risk/reward isn’t overly exciting. As for AX1, we are neutral, its unchanged albeit trading in a volatile range over the last few years.

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Sandfire Resources (SFR) v Copper ($US)

LAST UPDATED 23/02/2024 14:21

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