Viewpoint: Bullish

RMS has rallied in a similar manner to high beta gold plays EVN and NST, it’s not our preferred pick of the 3 but it still looks well-placed over the coming years.

NST has rallied to a similar degree as EVN, both putting NCM to shame in the process. If we see a drop of ~$US100/oz by gold courtesy of a bounce in the $US we believe it will provide an excellent opportunity to enter this gold play.

EVN has soared almost 90% from its October low, a great appreciation in just 3 months. We really like our 3% position in this WA-operating gold miner and could increase our position into pullbacks.

The ASX’s main gold play is ~$20bn Newcrest Mining (NCM) which has been a serial disappointment in many local investors’ portfolios over the years, even after its recent bounce MM is still well behind on our investment in this particular miner. This has undoubtedly been a frustrating holding for us but we can still see a test of the $28-29 area over the coming 12-18 months.

MQG impressively shrugged off overnight weakness in US investment bank Goldman Sachs (GS US), the longer that MQG can keep knocking on the $180 resistance door the more likely it is to rapidly pop to $190, and above e.g. written calls around the $180-185 level are likely to cover/roll on mass leading to a short, sharp squeeze on the upside.

RMD has rallied sharply this week following upgrades from JP Morgan, they raised the stock to a buy with a price target of ~$35, around 7% above yesterday’s close. In line with our short-term positive outlook towards growth/tech stocks healthcare should perform well and our ideal target for RMD is in excess of $36, above its 2022 high.

This ETF holds the likes of KGHM Polska Miedz SA, Antofagasta, Freeport-McMoRan and BHP Group which contains a great basket of companies to represent MM’s medium term view towards commodities hence while it would be easy to grab our profits and run this is one position we can see ourselves holding over a few years as opposed to weeks/months.

This diversified resources goliath now has a market cap of GBP70bn and employs well over 80,000 people, post COVID the stocks more than tripled providing an excellent “paper profit” for MM in the process. The stocks paid a 5.57% yield over the last 12 months which makes giving the position some room far easier even if we do see a decent dip short-term.

We bought BCB in the Emerging Companies Portfolio late last year, with the stock down ~5% since, and down around 20% from recent highs set last week. Coal has been under pressure recently and we are largely neutral on the commodity, however, we see upside in the met coal name as they start to ramp up production across their assets. Wet weather…