3 stocks that could still pop 20% as 7000 rapidly approaches

James Gerrish

Market Matters

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.

Aristocrat (ALL) Chart

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.

Xero (XRO) Chart

Today we have briefly looked at 3 ASX200 stocks which appear to have the correct blueprint for a decent rally in the months ahead.

1. BlueScope Streel (BSL) $17.42.

BSL has recently pleased the market with a profit upgrade but considering the stock's appreciation over the last 12-months, this clearly came as no major surprise. However the stock continues to rally with momentum as the market expects the steel manufacturer to benefit from the massive global monetary and fiscal stimulus which makes total sense to MM, we like BSL both fundamentally and technically looking for a test of the ~$20 area.

MM is bullish BSL looking for ~20% upside.

BlueScope Streel (BSL) Chart

2. Corporate Travel Management (CTD) $19.12.

CTD is not a new addition to the MM Morning Reports, it’s been on our watchlist most of this year. Any further worries around the COVID vaccine is likely to see further deteriorating sentiment towards the travel/tourism sector but we believe this is now in the rearview mirror and CTD is poised to rally strongly.

MM likes CTD for ~20% upside.

Corporate Travel Management (CTD) Chart

3. Elders Ltd (ELD) $11.20.

ELD is a new one for our 2021 reports but MM feels this rural services business currently represents good value around $11. The increased rainfall the country is experiencing is great news for crop yield which bodes well for diversified agri-business ELD.

MM likes ELD for 15-20% upside.

Elders Ltd (ELD) Chart

Conclusion

MM likes BSL, CTD and ELD for strong moves in the coming months

Make informed investment decisions

At Market Matters, we write a straight-talking, concise, twice daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them. Click here for your free trial.

........
Disclosure Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded. Disclaimer All figures contained from sources believed to be accurate. All prices stated are based on the last close price at the time of writing unless otherwise noted. Market Matters does not make any representation of warranty as to the accuracy of the figures or prices and disclaims any liability resulting from any inaccuracy. Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The Market Matters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position. The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product. The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports. Market Matters may publish content sourced from external content providers. If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.

James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.