A miraculous bounce in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has seen the index claw back early falls. As we head into the close, the ASX 200 is down just 0.2%.
It seems bargain hunters have been waiting to pick up shares on the cheap, and a number of stocks have surged.
Here's our view on 5 of them.
Sundance Resources Limited (ASX: SDL) has climbed 14.3% to 3.2 cents. The iron ore explorer has seen its share price rocket up 73% since the end of 2014, thanks to iron ore prices stabilising. But Sundance still has some way to recoup its 63% fall over the past 12 months, and will be relying on further rises in the iron ore price.
Neuren Pharmaceuticals Ltd (ASX: NEU) soared 10.4% to 16 cents, adding to gains earlier this week. At the end of 2014, Neuren announced that it had submitted applications to the US Food and Drug Administration (FDA) for Orphan Drug designation for its treatment NNZ-2566 used to treat Rett syndrome. Orphan Drug designation is a special status the FDA can grant to treat rare diseases or conditions (such as Rett syndrome). A successful application could see Neuren rocket from here.
Arrium Ltd (ASX: ARI) gained 9.1% to 24 cents. Again, Arrium is heavily dependent on the iron ore price, and like Sundance, has gained 37% since the beginning of the year. Still, the steel maker-cum iron ore producer has seen its shares slide by 85% in the past year. We warned about the risks Arrium faced in July 2012, suggesting the company was 'jumping from the pan into the fire'.
Atlas Iron Limited (ASX: AGO) rose 8.6% to 27.7 cents, and the share price has almost doubled in just 7 days. Mind you, shares in the junior iron ore miner were trading as high as $1.19 in early 2014 before it was dragged down by the plummeting iron ore price. But a key concern still remains – and that is whether Atlas is making any money with the iron ore price around US$70 a tonne.
MACA Ltd (ASX: MLD) added 8.2% to 92 cents. The mining services, construction and engineering company has had a bumpy start to the year, despite no news. Maybe it was bargain hunters wading into the stock, with MACA shares plunging 63% over the past 12 months, but they may well see shares fall further from here. Resource investment is set to decline over the next few years, making life even more difficult for mining services companies.
