Why these 4 ASX shares posted strong gains today

Unfortunately the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) hasn’t been able to build on yesterday’s gain and is down almost 1% to 5,906 points in afternoon trade.

Four shares that have defied the market and climbed higher today are listed below. Here’s why they posted strong gains today:

The BWX Ltd (ASX: BWX) share price has climbed 6% to $5.32. Today’s gain appears to be a delayed reaction to a positive broker note out of Goldman Sachs yesterday. Although the broker acknowledged that BWX’s first-half was weak, it remains confident that its original investment thesis is intact. As a result, it has a conviction buy rating and $8.25 price target on the company’s shares.

The Resolute Mining Limited (ASX: RSG) share price is up 3% to $1.21. The majority of Australia’s leading gold miners have pushed higher during trade on Wednesday after investors headed to safe-haven assets following the market’s sharp decline. At the time of writing the gold miners index is up just over 1%.

The Retail Food Group Limited (ASX: RFG) share price has rebounded from a series of heavy declines and is up 4.5% to $1.19. I suspect that today’s gain is either down to bargain hunters swooping in after the sell-off, or short sellers deciding to buy shares to close their positions. I think it is more likely to be the latter of the two.

The Wattle Health Australia Ltd (ASX: WHA) share price has also rebounded from a series of heavy declines and is up 4% to $2.32. The infant formula and baby food company’s shares have come under significant pressure since the release of its half-year results. Those results revealed little by way of revenue, leading many to question its lofty market capitalisation. Judging by today’s gain, though, some investors think this decline is a buying opportunity and the company will live up to its valuation.

While Wattle Health could potentially come good in the future, this investment opportunity could be many times more lucrative if you ask me.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BWX Limited and Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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