Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell. Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au.
This post is an extract from the newsletter dated 25 April 2021. You can access the full version of the article HERE.
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FMG’s share price has cooled off from its January peak, but recent price action is telling us that it is ready to head higher again. Iron ore prices continue to strengthen and FMG remains the best exposure to that commodity because of its high margins and attractive dividend yield.
WSA is a nickel producer and their mines are known for their high quality. The price of nickel is expected to rise over the next few years and WSA is one of the top companies to benefit from this. In terms of the chart, we can see that the share price has shown very good buying support down at these levels and we expect it to now head higher.
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Construction stocks are expected to continue to do well through 2021 as they capture the recent increase in home building spending. JHX shares have recently emerged from a consolidation pattern and this means that they should resume their trend higher from here.
MIN is now a business with exposures to both iron ore and lithium, and we expect the prices both commodities to continue to head higher. MIN’s shares spent the first few months of the year trading sideways but a recent breakout to new highs should see the share price resume its uptrend.
Margins have been under pressure in their annuities division and a recent quarterly update from the company has disappointed the market. The shares have gapped under a strong support level on the chart and this means that the share price is likely to remain under pressure for the time being.
Cost pressures and government regulation make it hard for GEM to grow their earnings organically. The share price has also been on a slide in the last 6 months and this downwards trend appears to be gathering pace. Without a catalyst in sight to halt the slide, we expect the share price to continue falling back.
Michael Gable is managing director of Fairmont Equities.
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