With the S&P/ASX 200 Index (ASX: XJO) bouncing back 8.8% over the past 50 days, the hottest question for investors right now is whether we are past the bottom.
However, experts have always warned that trying to time the market is a mug's game. Not even professionals can do it successfully.
It's a different matter for individual ASX shares though.
When you focus on just one stock, one can estimate whether there has been a turnaround after assessing the company's financials, external drivers, and investor behaviour.
Keeping this in mind, Fairmont Equities managing director Michael Gable named three ASX shares this week that he thinks are on the way up:
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Rocketing upwards even as the market was tanking in June
Digital audio networking provider Audinate Group Ltd (ASX: AD8) has seen its share price climb a spectacular 73% since its 11 May trough.
This is a great sign for Gable.
"It bottomed in May. The market bottomed in June," he told Switzer TV Investing.
"If you see a stock that's bottomed and heading higher well before the rest of the market… you're better off buying something like this because it's already outperforming the market."
It seems everyone is loving Audinate right now.
According to CMC Markets, all four analysts that cover it rate the stock as a strong buy.
Last week, The Motley Fool reported Morgan Stanley had a buy rating for Audinate with a price target of $9, which has already been met.
The company is due to release its financials on 22 August.
Great result, recovery well underway
After losing 44% for the year until 17 June, REA Group Limited (ASX: REA) shares have since rallied to boost the company's value by a third in just a few weeks.
The stock is sensitive to interest rate fears, not just as a member of the technology sector, but because of its exposure to real estate.
Gable now feels like the turnaround is in place.
"Mid-June, everyone was pricing in silly interest rates. What they're pricing now isn't so silly," he said.
"It's starting to make sense that we should get a bit of a recovery here."
Another positive is that REA shares have shown decent resilience during a tough time for growth shares, according to Gable.
"The good thing is it hasn't dropped as much as some other tech stocks."
Goldman Sachs, The Motley Fool reported, is a fan of REA's financials this week and also rated the stock as a buy.
"Overall we thought the REA result, commentary and cash performance was positive."
'BHP has bottomed out'
Mining giant BHP Group Ltd (ASX: BHP) is one that the Fairmont team has recently bought into.
The share price has gained about 7.8% since a 17 July trough.
"I think BHP has bottomed out. It's really moving along quite nicely."
The company this week proposed to acquire OZ Minerals Limited (ASX: OZL). Although the offer was promptly declined, Morgans doesn't think that's the end of the story.
"If nothing else, this development should reduce any concern that BHP might have been considering a larger, more transformative acquisition," stated its analysts.
"There has been a consistent fear from some that history would repeat itself and BHP eventually [becomes] attracted to a +$100 billion acquisition/merger at a high point in the cycle. Instead, BHP has remained on-strategy and focused."
