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ASX races higher – Are these 3 stocks about to join the party?

It was a huge finish to trading on Friday last week with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) surging 2.3% to close at levels last seen in May 2008. While Monday’s trading was more tepid, the index still managed to add 0.2% and help rack up another day of gains.

Friday’s rally was helped along by investors piling into Rio Tinto Limited (ASX: RIO) after a favourable reaction to the mining giant’s profit result. Rio has now rallied 18% in the past month. Its peer has also been doing its share of the heavy lifting with BHP Billiton Limited (ASX: BHP) recording a gain of 20% over the past month.

Others joining the ASX bull market party recently are Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) which have both hit fresh all-time highs.

It’s been a similar scenario on US markets, with the S&P 500 ending Friday at another new record closing high thanks to a rebound in the oil price, a ceasefire between Ukraine and Russia, and a reduction in fears over Greece’s economic predicament.

All-in-all, markets seem in a particularly buoyant mood which could be a good reason to be cautious, but it could also be a good reason to seek out stocks which might be late to the party…

  1. Santos Ltd (ASX: STO) has bounced off its recent low thanks to a turnaround in the price of oil, however, the group is still down 44% over the past six months and could be set to climb much higher if the oil price continues to head north.
  2. Mint Payments Ltd (ASX: MNW) has sunk to a new low of 5.7 cents, having been as high as 35 cents in the past year. The group operates in the mobile payments and transactions processing space which is expected to grow extensively. If Mint is ultimately successful at capturing a significant share of this sector its share price could head much higher too.
  3. Royal Wolf Holdings Ltd (ASX: RWH) reported its interim results last week which failed to enthuse investors with the stock trading down to a new 52-week low. While the group does have some exposure to the resource sector, Royal’s revenue base is much broader and average utilisation across the group was 83.2% during the half year to December. It’s possible the stock has been lumped in with the mining services sector, but if the company can prove otherwise, the share price could also improve.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned.

 

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