Although the S&P/ASX 200 has lifted 2.6% in the past month, to its current level of 5200, many companies are now hovering in the middle ground between their highest, and lowest points all year.
While this can make it easier to find bargains, it also draws more attention to peaks and troughs at smaller stocks. With these three stocks the latest to hit their highest point all year, is there any value to be found?
Hub24 Ltd (ASX: HUB) – last traded at $2.70, up 173% for the year
Financial services platform Hub24 has experienced an explosive performance this year, rising another 30% since I wrote on it last month. The latest small rise was caused by a takeover offer from IOOF Holdings Limited (ASX: IFL) yesterday, which valued the company at $2.75.
Contango Asset Management – a significant shareholder in Hub24 – was quoted in Fairfax media as saying the offer undervalued the company, believing it to be worth closer to $3.10 per share. Given the high level of optimism built into the price (Hub24 is unprofitable), I believe that IOOF's offer is a fair one, although they may have to go higher to win over major shareholders.
With this in mind, shares in Hub24 could move higher in the near term.
Tassal Group Limited (ASX: TGR) – last traded at $4.26, up 21% for the year
Shares in salmon business Tassal Group Limited soared at the end of September after the company announced a favourable result to a regulatory inquiry. Its latest highs come off the back of that optimism as investors re-rate the stock's prospects upwards now that a major regulatory hurdle has been removed.
While it is still an aquacultural stock and prone to additional risks as a result, Tassal is modestly priced and has a number of favourable tailwinds. I expect the stock will continue to rise over the next 12 months.
EVOLUTION FPO (ASX: EVN) – last traded at $1.45, up 97% for the year
Gold miner Evolution has performed unusually well for a miner in the past 12 months, almost doubling its share price as a crashing US dollar boosted its profits. With All-In Costs (AIC) – cost of mining, plus exploration and expansion expenditure – ranging between A$529 and A$1,462 per ounce (average of A$1015/ounce) at its seven gold mines, Evolution is well placed to respond to ups and downs in the value of gold.
Unfortunately, it looks as though most of the easy gains have been made, although with US interest rates rising and uncertainty in China and emerging markets there is ample opportunity for gold prices to shift both up and down.
With that said I still feel that Evolution looks fully valued for the moment and I expect its price to remain in line with current levels for the time being.
