Wealth Within senior analyst Filip Tortevski has been eyeing some big gun miners whose stock has been falling for a while now, contemplating the historic value of blue chips which tend to rebound spectacularly when the market improves.
None of these household names, however, are Wealth Within’s Hot Stock Tip for this week.
While Tortevski finds Telix Pharma (ASX:TLX) “interesting” with healthcare being a “defensive kind of industry that you often see doing well when the market is falling, or at least sideways in the past couple of weeks”, he says: “What’s hot right now is EML Payments (ASX:EML).
This is a stock that benefits from rising interest rates and as the company holds about $2 billion in cash, even an interest rate increase of 1% will increase revenue by $20million.
“When this stock runs, it can run hard and in the short to medium term this is one for the watchlist,” Tortevski says.
EML Payments has been trading around 92 cents.
The Proceed With Caution stock is Data#3LTD (ASX:DTL), a cloud solutions company which has been producing steeper momentum lines, indicating that buying is “getting more serious, but at some point is going to run out of steam”. This stock is an Australian leader in the tech sector that will return 26% profit if it returns to its all-time high.
Data#3Ltd was last priced at $7.81.
The ‘Not Hot’ pick this week is broadband New Zealand internet and mobile phone services company Spark Limited (ASX:SPK) and Tortevski says you “don’t have to be a scientist to clearly see that it doesn’t look healthy”.
Having fallen heavily in March this year, April gave Spark some respite and although some traders might have been tempted by bargain at basement lows, those who did might have experienced a bit of a washout.
“You don’t want to be catching falling knives and these are alarming times for Spark New Zealand.”
Spark Limited was trading at $3.83.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au
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