Viewpoint: Bullish
PLS +8.13%: Came out of their trading halt today with an announcement around plans to build a lithium processing facility which sent the stock higher. Pilbara have teamed up with POSCO to build a downstream plant in South Korea. Pilbara will own 18% of the joint venture and supply 315ktpa of lithium spodumene that will be processed into…
Sydney based iron ore business CIA rallied 3.25% yesterday but it remains well below a number of broker valuations even assuming iron ore stabilises around $US80/MT over the next few years. We feel the risk / reward favours the next 20% being on the upside but no dividend detracts from CIA’s attraction considering the high yielding nature of its peers.
The pictures fairly similar across the “Big 3” in the iron ore space with RIO Tinto (RIO), Fortescue (FMG) or BHP Group (BHP) all significantly lower from their July high, arguably the main reason why the ASX200 is not challenging fresh all-time highs this morning. However as is often the case the stocks may have already bottomed even if iron ore feels capable of another 8-10% downside, hence we like the sector at current levels, and into another dip if it does occur.
The overnight surge in TSLA made Elon Musk’s company a $US trillion dollar business, very impressive on any matrix. The order by Hertz for 100,000 EV’s was only the 1st step by the rental car business to electrify its entire fleet, great publicity and I’m sure the likes of Avis & Europcar will follow suit sooner rather than later. This order will be delivered in 14-months…
Overnight US stocks saw a small recovery in the tech space which flags some reversion to the recent sector rotation from growth to value i.e. the markets accepting bond yields are going higher. We still see the US tech space testing fresh highs i.e. rallying another 3-5% into Christmas – some alarm bells might be ringing for nervous investors but MM remains happy…
Yesterday saw crude oil again surge to fresh multi-year highs but the oil stocks almost unfathomably cannot breach their June high, let alone get close to where they were when oil last set its sights on $US90/barrel. We understand that the trend towards ethical investing (ESG) precludes some funds from buying the likes of STO but the valuation gaps becoming very hard to ignore.
The ASX200 kicked off the last week of October in solid form rallying to new monthly highs in the morning before finally managing to close up 0.3% even as more stocks actually closed in negative territory. The resources names, led by the energy component, were the best on ground while the tech sector slipped lower but overall it was another quiet session…
TLS +2.14%: Announced today they have partnered with the Australian Government to acquire the Digicel business in the South Pacific region for US$1.6bn plus up to $250m earn-outs. In the scheme of TLS, this is a small deal but a positive one non-the-less and a use of capital than doing share buy-backs. We like the direction TLS are taking in terms…
SIQ -10.6%: The bid for the leasing + salary packaging business was essentially pulled today, with the private equity consortium reducing the bid price from $10.35 to $9.25 forcing SIQ’s board to walk away. The original bid was a 38.6% premium to the pre-bid price while the revised offer represents a 17.7% premium, which is completely inadequate for a change…
We mentioned earlier our bullish outlook for the NASDAQ into Christmas with our initial target around 5% higher, one of the biggest contributors looks likely to be Apple (AAPL US) which remains in a healthy uptrend targeting $US160 over the coming months.
