Viewpoint: Bullish
The ASX200 experienced a mixed week as we exited April with things looking good on Friday but after the latest sharp drop by US indices, local resilience will yet again be tested this morning. At this stage, MM is not panicking into cash even as we enter May but we are constantly reminding ourselves of our mantra for 2022 and its investors who are prepared to sell that we believe will see the best relative performance come the end of the year:
NTO +19.7%: the 1st quarter trading update provided the catalyst for a strong bounce in signature and document productivity business Nitro today. Annualized Recurring Revenue (ARR) came in ahead of guidance, up 61% YoY compared to previous guidance of 39-47%. Cash receipts were also up 42% YoY which helped reduce the cash burn to $3.6m, down from $4.5m in the previous period. With performance metrics…
US NASDAQ futures followed through on their late trading strength yesterday with the tech-based NASDAQ finally closing +3.5% higher, of the major names only Tesla (TSLA US) caught my attention in the loser’s corner and that has no flow through into the ASX. If we are correct and the tech stocks are going to trade in a 13,000 – 15,000 trading range we should see more than 10% upside over the coming weeks.
Iron ore producer FMG rallied over 8% yesterday after delivering an excellent 3rd quarter update plus a shipments guidance upgrade – shipments were up 10% to 46.5 million tonnes, average revenue was up 34% to $US99.52 per tonne while costs were up only 3% quarter on quarter to $US15.78 per tonne i.e. that’s one nice gap of profitability! We now believe the risk/rewards…
Leading supermarket retailer WOW has bounced 18% from its 2022 low as defensive names increasingly catch investors attention plus it doesn’t hurt that they are likely to be beneficiaries of rising inflation. It may be a fairly slow and boring journey but we can see “Woollies” posting fresh all-time highs over the next 12-months with its best weeks likely to be when the broader index gets the wobbles.
The ASX200 bounced almost +1.3% overnight as the mining stocks enjoyed a strong rebound which helped the Materials Sector rally over +3.5%. The local market yet again finds itself only 3% below its all-time high although most subscribers would agree it doesn’t feel that strong but we cannot argue with the numbers, at MM we still believe “the path of most pain” for underweight…
AD8 +6.21%: the audio-visual technology company provided a positive surprise in their quarterly update aftermarket yesterday. Revenue for the seasonally weak 3Q was $US6.5m, now strongly placed to beat FY estimates. They noted chip supply issues had started to ease after peaking early in the quarter, gross margins had been maintained above 75% and they have managed to push through price rises…
PDN -6.67%: Out with their quarterly activity report this morning however more importantly for the sector was news overnight from Sprott Asset Management that the SEC has rejected its US listing application for the Sprott Physical Uranium Trust (TSX: U.UN). This follows the news earlier in the week the company had closed its acquisition of the Sprott Uranium Miners ETF (NYSE: URNM), which was previously known as the North Shore Global Uranium…
US NASDAQ futures have rallied +1.2% in late trading this morning after FB’s result, in our opinion we should see follow through buying in the out of favour sector with MM’s target over 15% higher. Strategically if they cannot gain some upside momentum after finally receiving some glimmers of positive news it will be a worrying red flag that growth stocks are set to fall further and faster than we have been expecting.
After market this morning we saw Facebook, as its still largely referred to, rally +12% following its first quarter report, the catalyst was the return to user growth which wasn’t anticipated by the market as users flock to younger sites like TikTok. Revenue also jumped 6.6% to $US27.9bn for the Facebook parent which has seen its stock more than halve this year – we expect a sharp countertrend…
