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ASX Hot Stocks: Fairfax, Lynas and Fortescue

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has stormed higher, easily erasing yesterday’s fall to finish at 4,834, a rise of 2.6%.  In its strongest day in 18 months, all market sectors ended in the black, with just six companies in the ASX 200 ending down. It seems that the market has gotten over its recent bout of ‘lack of confidence’, and has forgotten about the US Federal Reserve threatening to ease off its quantitative easing, as well as any fears of China’s economy slowing down – until tomorrow perhaps.

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

Fairfax Media Holdings (ASX:FXJ) has risen 5.1% to close at 51.5 cents, after the media company launched its digital subscriptions for The Sydney Morning Herald and The Age mobile, website and tablet apps today. Users can still access free articles, but will be limited to viewing 30 articles a month, after which time they will be prompted to sign up. Subscribers will also get access to additional members-only content. Based on results from other media companies setting up paywalls, the chances are that Fairfax will see an increase in digital revenues, which should offset the declining print earnings.

Rare earths producer Lynas Corporation (ASX:LYC) added 9.3% to finish at 41 cents, continuing its yo-yo performance on the share market. Trading at current levels is heavily influenced by traders rather than investors, with the company yet to produce a profit or solid revenues. With the price of many rare earths minerals trading below the cost of production, that could be some time away, if at all. Lynas has acknowledged the issue, and has decided to stockpile material, rather than sell its rare earths products at a loss.

Fortescue Metals Group (ASX:FMG) surged 5.8% to end at $3.12, after getting close to its 52-week low of $2.81. The iron ore miner has benefitted from relatively consistent iron ore prices which have been trading roughly between US$110 and US$120 a tonne over the last month or so. The falling Australian dollar is also likely to give the miner a boost to revenues, after slumping below 92 US cents today. Unfortunately for Fortescue, its debts are denominated in US dollars, meaning in Australian dollar terms, it now owes around A$11 billion to its lenders.

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Motley Fool writer/analyst Mike King owns shares in Fairfax Media.

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