This month is reporting season, so there will be some price movements, at least in individual ASX shares.
Armytage Private chair Lee IaFraté this month has his eyes on a pair of stocks that fit his "conservative" and "fundamental" investment approach.
"Avoid the noise," he told Reach Markets.
Share price already bounced, but this is just the start
Four-wheel drive accessories provider ARB Corporation Limited (ASX: ARB) has performed handsomely since the 1980s for long-term investors.
But after dropping 40% this year, IaFraté reckons there is excellent value there — with the challenges it has faced this year not really its own doing.
"It has a cult following worldwide," he said.
"Oil prices have gone up — that didn't help the story. Also, supply didn't help the story."
IaFraté sees upside for those willing to pick it up at a discount right now.
"This stock has been sold down… [but] it's one of our COVID-recovery stories, going into 2023," he said.
"It's had a nice little bounce so far, but this stock will continue to recover."
The market dominance is undeniable for IaFraté.
"It's effectively a monopoly. And we love monopolies.
"So if you think the world isn't going to end, and people might start travelling and spending again, this is our number one pick."
ARB is reporting its results on 16 August.
A 'sleeper' stock pick
IaFraté also loves wealth management software maker Praemium Ltd (ASX: PPS).
"There have been two attempts of takeover here," he said.
"Third time lucky — they've sold the international business, they've returned a five-cent dividend just recently."
Praemium is due to report its numbers on Monday, but IaFraté pointed out there is another important catalyst at the end of the month.
"The buyback starts at the end of August… They'll buy 10%, which is about 52-odd million shares," he said.
"We think that alone should start to see some price appreciation."
With the share price having dived 57% in 2022, IaFraté reckons even the cynics would have to admit there is value.
"So even the most sceptical, miserable person alive thinks, gee, there might be 10% or 15% in this one," he said.
"We suspect there will be — they're now back to solid profits, they're focused just purely on the Australian operation. They're run by a very, very excellent quality management team."
For IaFraté's team, Praemium is "a sleeper" for August.
"So if you've got some spare coin, that's not a bad one to have."
