They note in their report published on 29 October that the S&P/ASX200 Resource Index (ASX: XJR) is down 17%, the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 12%, and the S&P/ASX 300 Resources Index (ASX: XKR) is down 19%.

And the broker has a theory as to why.

Shaw & Partners said:

In our view, the reasons for the sell-off are due to rising energy costs, higher inflation, rising bond yields and wobbles in the AI trade. However, the sell-off has been indiscriminate, and commodity prices are holding up (particularly copper) so stocks with positive catalysts before the end of year could quickly recover ground.

Disconnect between share prices and commodities

On the resources front, Shaw & Partners noted that resource stocks had gone backwards over the past two months, despite commodities except for iron ore being either flat or up.

They said it was an "unusual sell off" given the relative strength in commodity markets.

The broker added:

Copper is close to its record high, Newcastle coal is up roughly 40% this year and the term uranium price is at a record high. The sell off has been driven by rising yields and risk-off sentiment, not a commodity bust. It is going to be crucial to watch the copper market in coming weeks. If copper holds onto its gains, then we should expect resource equities to bounce.

Shaw & Partners surmised that copper stocks had been sold off along with AI stocks, as they were seen as a key supplier to data centre builders.

They said:

When the AI infrastructure trade wobbled, that momentum money left the resource sector too.

On the small-cap resources front, Shaw & Partners said these stocks were sold down because they were sensitive to funding risks and could struggle to raise capital, and with no cash flow, were sensitive to interest rate increases.

The broker said small caps were often sold off in a "risk off" market, and the retail squeeze from cost-of-living pressures was impacting many consumer-focused companies.

But Shaw & Partners argued that the sell-off may now be over, and it could be time to buy.

Firstly, we are now probably towards the end of the rate rise cycle. The RBA is hiking into rising unemployment, which historically signals peak rates are near. When yields roll over, the longest-duration assets rebound hardest, and that means small cap stocks. Secondly, the sell-off has disconnected equities from commodity prices – copper in particular remains strong, but gold is holding above US$4,000/oz despite rising yields, coal prices are heading higher, uranium is strengthening, and most base metals remain up ytd. Despite higher costs, the cash generation in the resource sector is strong, and if equity markets don't value assets, then it is likely that corporates will.

Shaw & Partners' 10 stock ideas

Benz Mining Corp (ASX: BNZ) – the company is "unusually" advanced on permitting and is expected to publish a maiden resource early next year.

COG Financial Services Ltd (ASX: COG) – COG is trading below its peers, while Shaw is predicting double-digit net profit growth for the next three years.

Elementos Ltd (ASX: ELT) – tight global tin supply supports the fundamentals of this company, which is expecting its final environmental approval for mining early next year.

Gentrack Group Ltd (ASX: GTK) – slower than expected contract wins have pushed the share price down, but Shaw says the fundamentals of the business are sound.

ikeGPS Group Ltd (ASX: IKE) – the company has three new products on track for launch this year, while Shaw sees potential for recurring revenue to exceed expectations.

IPD Group Ltd (ASX: IPG) – Shaw said the company is exposed to multiple tailwinds, including electrification, electric vehicle infrastructure, and data centres.

Metro Mining Ltd (ASX: MMI) – shares were heavily sold off after the company missed guidance, but Shaw said the company remains cash flow positive with a good balance sheet.

Paladin Energy Ltd (ASX: PDN) – Paladin is down 17% year-to-date despite a rising uranium price, progress at Patterson Lake South, strong performance from Langer Heinrich and a highly positive outlook for the uranium sector.

Sky Metals Ltd (ASX: SKY) – Shaw argues the market is underestimating the value of the company's Tallebung tin project in New South Wales.

Waratah Minerals Ltd (ASX: WTM) – this company is expected to publish a maiden gold resource early next year, and ongoing drilling could provide further upside.

The post 10 ASX small caps that could "bounce" by the end of the year: Shaw & Partners appeared first on The Motley Fool Australia.

The broker has just initiated coverage on the company with a buy rating, and a very bullish share price target, which I'll get to shortly.

Sky Metals a triple-threat

The Shaw team began covering the company because of its exposure to three critical minerals in tin, tungsten, and silver, and a positive prefeasibility study for its Tallebung project.

The broker said:

SKY's Tallebung tin-tungsten-silver project offers direct exposure to three of the world's most strategically important critical minerals at a time of acute supply concern. The project's prefeasibility economics are robust even on conservative commodity price assumptions, yet the SKY valuation ascribes limited value to significant leverage to current tungsten prices, resource growth and exploration upside. Permitting is advancing, financing requirements are modest, and SKY has a clear pathway to becoming a meaningful non-Chinese tin-tungsten producer.

Shaw said there was strong demand for all three of the minerals at the Tallebung project, with tin one of their favoured industrial metals.

They added:

Pricing has been very strong this year on AI infrastructure, EV and 5G demand, against a fragile supply base where most primary output comes from high-risk jurisdictions. Tungsten is tighter still, with China controlling around 80% of primary production.

Shaw said Sky's Tallebung project was capital-light and fast to build, estimated to cost just $138.8 million and take only seven months to build.

The company has estimated the project's payback at under 17 months at the assumed metals prices, and less than seven months at actual spot prices.

A key milestone for the company moving forward will be environmental approvals, with Shaw saying the company was expecting to lodge its environmental impact statement by May next year.

This would be followed by development approval targeted for late 2027 and first production in mid-2028.

Sky currently has a 150-plus hole resource drilling program under way, and in late September returned more high-grade results.

Sky Managing Director Oliver Davies said:

These latest results provide further evidence of the significant growth potential we see at Tallebung, with another broad, shallow and high-grade tin intercept adding to the growing inventory of significant mineralisation identified since the cut-off for our recent Mineral Resource Estimate update.

Sky Metals shares looking cheap

Shaw & Partners has a price target of 36 cents on Sky shares compared to 16.25 cents currently.

If achieved, this would constitute a 121.5% return.

The company is valued at $173.9 million.

The post This ASX critical minerals share could more than double: Broker appeared first on The Motley Fool Australia.

With global headwinds impacting the ASX 200 this year, it could be an ideal time to allocate capital towards high upside stocks. 

The team at Bell Potter have identified two in particular that fit this criteria. 

Let's see what the broker is projecting. 

Orthocell Ltd (ASX: OCC)

Orthocell is an Australian-based, commercial-stage regenerative medicine company developing and commercialising collagen-based medical devices and autologous cell therapies for the repair and regeneration of bone and soft tissue.

The company leverages their proprietary collagen processing and manufacturing platform to produce implantable biomaterials designed to support tissue regeneration and functional recovery.

As is commonplace with small-cap shares, it has experienced some volatility in 2026. 

However, Bell Potter has a speculative buy rating on this ASX small-cap, suggesting it could rise by 40% in the next year. 

In a note released yesterday, Bell Potter said June-quarter revenue increased 19% QoQ to a record $3.8m (+36% pcp), reflecting continued strength across the established market.

The broker said the US rollout of Remplir is making good progress. 

The product is now available to around half of the US population through expanded distributor coverage. 

Hospital access is also growing, with approvals in 151 hospitals and more applications still under review. 

In simple terms, more hospitals are buying the company's nerve repair product Remplir, and more surgeons have started using it. 

However, sales growth has trailed hospital access growth, suggesting many surgeons are still trialling the product and are yet to commit.

Based on this guidance, Bell Potter has a 12-month price target of $1.19 on this ASX small-cap, indicating a 40% upside from current levels. 

Sky Metals Ltd (ASX: SKY)

Another ASX small-cap drawing a speculative buy rating is Sky Metals. 

Sky Metals engages in the acquisition, exploration, and development of mineral resources.

Its share price has rocketed 183% higher year to date, and Bell Potter believes the growth can continue. 

Bell Potter noted that Sky Metals has significantly increased the estimated size of its Tallebung project in New South Wales. 

The updated resource now contains much more tin and tungsten than previously estimated. The company has also identified its first silver resource. 

Much of the resource is now classified with higher confidence, making it more likely to be converted into mineable reserves.

Based on this guidance, the broker has placed a 12-month price target of $0.350 on this ASX small-cap, indicating 37% upside from current levels. 

The post 2 ASX small-caps with 40% upside appeared first on The Motley Fool Australia.

Positive news

The company last week released an update on the Tallebung project to the ASX, saying the key step of submitting a scoping report to the New South Wales Government had been ticked off.

Sky Managing Director Oliver Davies said regarding the milestone:

This marks a significant step forward for SKY, with Tallebung advancing on both the approvals and technical fronts. The initiation of the NSW State Significant Development (SSD) process is a key milestone as we position the project for near-term development. At the same time, ongoing drilling continues to deliver shallow, high-grade tin-tungsten-silver results, highlighting the strength, continuity and scale of the Tallebung system. With more than 500 drill holes completed and further results imminent, we are well positioned for the upcoming updated Mineral Resource Estimate and Pre-Feasibility Study in the first half of 2026. SKY is well-funded and focused on accelerating Tallebung toward development as a near‑term, strategic source of tin and tungsten.

Recent drilling at the project has delivered results including 8m of 1.24% tin and 13.2 grams per tonne of silver from a depth of 68m, and 16m at 0.38% tin and 37.4 grams per tonne of silver from 46m.

The submission of the scoping report, the company said, "allows key environmental, technical and permitting workstreams to progress in parallel, advancing the project towards near-term development''.

The company added:

The recent appointment of environmental consultants and an Environmental Manager at SKY is driving the SSD process, baseline studies and ongoing stakeholder engagement. These activities are aligned and continue to exceed the Company's planned development schedule, underpinning its strategy to advance Tallebung as a near‑term tin, tungsten and silver development opportunity.  

Shares looking cheap

Morgans said the progression of the Tallebung project was positive, and added:

We rate SKY a speculative buy with a target price of 35 cents per share, offering leveraged exposure to tin, a strategically important critical metal supported by electronics-led demand and a structurally tight, disruption-prone supply base. Tallebung provides investors access to an ASX-listed tin development opportunity, complemented by an established resource base and strong ore sorting amenability, which underpins a capital-efficient development pathway and project economics.

Morgans said Sky had a proven management team, and the spot tin price was currently sitting above its bull case assumptions.

Sky shares are currently changing hands for 19 cents. The company is valued at $187.8 million.

The post As approvals progress, Morgans says this ASX tin company is a buy appeared first on The Motley Fool Australia.

That's not to say there isn't robust demand, and like any mining project, if you can sell the stuff for more than it costs to produce, you're in clover.

This is the thesis behind a new research report from Morgans on Sky Metals Ltd (ASX: SKY), which forecasts significant share price upside.

Development plans

So firstly, what is the company up to?

Sky is the 100% owner of the Tallebung tin project in New South Wales, a historic tin mining region where the company to date has a mineral resource of 15.6 million tonnes at 0.15% tin, for 23,200 tonnes of contained minerals.

The company just this week announced to the ASX that extension drilling had hit prospective quartz vein structures beneath an extensive soil anomaly, "confirming the potential for repetitions of the Tallebung mineralisation to the south‑east''.

The company said its exploration efforts, "provide further strong evidence that the Tallebung system remains open in all directions, with significant potential for continued growth beyond the current resource footprint''.

The company is expecting to publish an updated mineral resource estimate in the first half of the year, incorporating what is expected to be more than 400 drill holes, up from just 115, which make up the current resource.

Sky Managing Director Oliver Davies said the recent exploration results were encouraging.

He said:

The combination of recent surface sampling, the discovery of new cassiterite‑bearing rock chips and successful extensional drilling continues to define new tin mineralisation well beyond the margins of the current Resource. This expanding footprint highlights the growing scale of the system and the opportunity for further high‑grade discoveries.

Shares looking cheap

Morgans has done its own modelling and calculated that, at a tin price of US$31,816 per tonne, the project, once brought into production, will generate $60 million per year.

At US$45,000 per tonne, that lifts to $113 million, and Morgans said the actual tin spot price was currently around US$55,000, "highlighting further unmodelled upside''.

The Morgans team has a speculative buy rating on Sky Metals shares, and a target price of 32 cents, compared with the current price of 17 cents.

The shares have already more than quadrupled from lows of 3.8 cents over the past year.

Morgans went on to say:

Tallebung provides investors access to a ASX-listed tin development opportunity, complemented by an established resource base and strong ore sorting amenability, which underpins a capital-efficient development pathway and project economics. Lead by a proven management team and spot tin prices sitting above both our base and bull case assumptions, we see Sky as well positioned to benefit from sustained tin price strength and supply-driven volatility.

Sky Metals was valued at $150.4 million at the close of trade on Monday.

The post Tin time? Let's have a look at this four-bagger appeared first on The Motley Fool Australia.