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My 2016 Melbourne Cup Trifecta

Today, I’m going to attempt to pick an unlikely trifecta of winners.

1) Whether the Reserve Bank of Australia (RBA) will move interest rates today.

2) A small-cap growth stock to out-perform the market over the next two years.

3) The winner of the 2016 Melbourne Cup.

The first bet is by far the easiest. The financial markets are overwhelmingly suggesting the RBA will leave interest rates on hold today.

When it comes to making bets, I’ll take the easy option all day long. For me, it’s the RBA to leave interest rates on hold.

Last year’s Melbourne cup day small-cap bet was Adacel Technologies Limited (ASX: ADA). Since then, the stock is up over 80%. A winner, for sure.

For this year’s small-cap bet, I turned to Motley Fool Hidden Gems Advisor Claude Walker.

No pressure, Claude…

The quest for growing profits (and growing market share) mean that thousands of online classifieds companies around the world are willing to pay to increase the number of end users arriving at their websites. That’s where Mitula Group  (ASX: MUA) comes in.

Now, you probably haven’t heard of Mitula because it isn’t a big player in Australia. In fact, Mitula is a Spanish company, and it has made significant progress in Europe, South America and Mexico. The good news is that while you may not have heard of Mitula, plenty of others have. Indeed, the company’s 79 websites received 190 million visits in the June quarter.

Those visitors then click on over 800 million links that lead to other websites, which have content featured on Mitula. These clicks are called “click outs” and they are Mitula’s product. The company sells them directly to other websites. It also monetises its traffic through Google’s AdSense.

Based on first half results, at around 90 cents, Mitula shares are trading around 20x earnings for this year. But in Chairman Simon Baker, you have quite the ‘jockey’. He was managing director and CEO of realestate.com.au as it grew from a tiny $8m company to a listed behemoth, with real estate classifieds dominance.

For the Melbourne Cup, as ever, I’ve enlisted the help of Lewy, the Fool’s resident horse racing pundit.

He was bang on the money in 2011 when he tipped Dunaden. In 2015 Protectionist was amongst his top three selections. Like most tipsters, he missed last year’s 100-1 winner in Prince of Penzance.

Shaken but not stirred, Lewy is back for another crack. As ever, I’ll be having $5 each way on all three nags. Wish me luck!

Tomorrow’s renewal of Australia’s greatest race once again brings with it more questions than answers.

Has an 8 length drubbing by our champion mare Winx dented race favourite Hartnell’s confidence?

Can Jameka complete the Caulfield/Melbourne Cup double and in the process set a weight carrying record for a four year old mare?

Can highly fancied import Oceanographer stomach his third tough run in 13 days to deliver another knockout punch?

Will race caller Greg Miles successfully navigate his way through a field where 10 of the 24 horses are wearing navy blue?!

My money is on Oceanographer ($8). Despite only qualifying for the Cup at the eleventh hour, Oceanographer looks poised to deliver Sheik Mohammed his maiden Melbourne Cup.

His win in the Lexus on Derby Day was nothing short of astonishing, flashing home late from last to win his way into the Cup.

Importantly, he has proven the tough Australian conditions hold no fear for him. Vintage Crop (’93) remains the only import to win the Cup without a local lead up run. He’ll be hard to hold out.

Despite being the sole Australian bred combatant, Jameka ($8) looks the principal danger. Her unfashionable local trainer Ciaron Maher has done a super job to get last year’s VRC Oaks winner to train on, and win the Caulfield Cup. She was completely dominant there.

She’s drawn to get a nice run just behind the speed and will probably look the winner shortly after they turn for home. In winning the Caulfield Cup, she earned a weight penalty which may ultimately work against her late, in tomorrow’s race.

Rounding out my Cup suggestions is Japanese outsider Curren Mirotic ($34). If this inconsistent veteran reproduces his previous 3,200m runs, he’s in the mix!

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Of the companies mentioned above, Bruce Jackson has an interest in Adacel Technologies.

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