The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has slumped by 0.7% to close at 4,809.5 after weak Australian job ad numbers suggested unemployment is set to rise, and create a further drag on an economy attempting to deal with a slowing resources boom. Further falls in the gold price also saw our gold miners smashed, with the sector as a whole falling around 7.5%.
Here’s why these three stocks are hot right now.
Billabong International (ASX:BBG) shares rose another 2.5 cents or 9.6% to 28.5 cents, more than double its recent low of 12 cents. The struggling surf wear maker appears to be at the mercy of hedge funds who have bought up the company’s debt from the original lenders. In what appears to be an opportunistic move, the funds may be angling for a debt/equity swap which could see existing shareholders severely diluted. Unfortunately that may be the only option for the company to stay afloat.
Atlas Iron Limited (ASX:AGO) saw its shares smashed down 5.6% to 79.5 cents, after the miner announced that it was pushing ahead with the development of its fifth iron ore mine, Mt Webber. The project is expected to cost Atlas $146 million, which will be fully funded from the company’s existing cash. Shareholders may be worried that now is probably not the best time to be investing in iron ore expansion, given the massive ramp up by the larger miners, which could see a glut of iron ore supply and lead to lower prices.
RHG Limited (ASX:RHG) climbed 15% to 46 cents, after the company recommended shareholders accept a $144 million takeover from Resimac. RHG shareholders will receive 44.1 cents per share in cash, as well as a 3 cent fully franked dividend. That will end an eventful life for RHG. After listing for $2.50 a share in late 2007, the GFC basically killed the company’s business model of securitising mortgages when credit markets closed, and shares fell to around 5 cents a share. Notably, John Kinghorn, the founder of the company pocketed around $600 million from the float, which was ranked by the New York Times as the “world’s worst float of the decade”.
In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
- Online retail tipped to soar
- Woolworths: Not as ‘cheap’ as Coles
- 3 bargain blue chips
- Petrol prices set to soar
Motley Fool writer/analyst Mike King owns shares in Billabong.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm