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ASX Hot stocks: Mirabela, Silver Lake and Atlas Iron

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has ended a five-day losing streak, rising 0.2% to 4,970.7. The Australian dollar was steady against the US dollar, and may have contributed to the positive market, after sliding for several days. Looking to the sectors, Information technology was the best performer rising 1.4%, while the Gold index was the worst, losing 0.5%.

Here’s why these three stocks are hot right now.

Mirabela Nickel Limited (ASX: MBN) was up 25.8%, closing at 19.5 cents. Mirabela is currently trading at less than a third of its 52-week high of 60 cents, as nickel prices have slumped. The company’s main asset is the 100% owned Santa Rita nickel mine in Brazil, but production has been falling over the past three quarters, and the company is around 2,000 tonnes of nickel behind budget. With net debt of US$323 million at the end of March 2013, Mirabela looks like a risky play on nickel, and probably best left to traders.

Silver Lake Resources (ASX: SLR) rose 7.4%, finishing at 80 cents. Gold prices rose overnight, lending support to ASX listed gold miners. Silver Lake has been heavily sold off recently, losing 64% in the past three months, as investors fretted over the future of gold. Today’s rise may also have been influenced by company directors wading into the market and buying up shares. As the saying goes ‘directors sell shares for multiple reasons, but there’s generally only one reason why they buy’.

Atlas Iron Limited (ASX: AGO) was up 2.7% to 77.5 cents, despite the iron ore price falling to US$120.30 a tonne overnight. The company is in talks with Fortescue Metals Group (ASX: FMG) to use Fortescue’s rail infrastructure to get its ore to port. Should Atlas be unable to arrange an agreement, the company could be facing the prospect of spending billions in capital expenditure to build its own railway and associated infrastructure. While it could do so in conjunction with a partner, it would likely be a major setback for the company.

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Motley Fool writer/analyst Mike King owns shares in Silver Lake.

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