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It’s the end of quarterly reporting season for explorers and small caps — and analysts at independent research house Equity Story have been crunching the numbers to nut out their top picks for February.

Here are their three favourite ASX small/mid caps (in no particular order):

Valmec Limited (ASX:VMX)

Sector: Energy
Profile: Provider of project engineered equipment, construction and commissioning solutions to the energy and resources sectors

Why we like it:

Fundamentals… Poised for strong growth on the back of a growing order book and improving margins in a market that’s on the up. Their latest announcements point to a very good 1H18 and a steady stream of contract wins augurs well for the year ahead.

The company recently raised $5.1 million and is well-funded for growth.

Technicals…VMX has not broken its short term (20x day) moving average since August 2017. While not a super-aggressive trend, it continues to elegantly swing its way to higher highs.

As the momentum traders would say “why wouldn’t you buy that?Kogan (ASX:KGN)

Sector: Retail
Profile: A portfolio of online retail and services businesses that includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Broadband, Kogan Insurance and Kogan Travel.

Why we like it:

Fundamentals…Should deliver strong half year results in February after updating the market recently on strong growth in the Dec Q. While the share price has run hard recently we can see further gains on the back of extraordinary growth from a company that is Australia’s own mini Amazon. Hard to go against momentum and a company that keeps over delivering.

Technicals… KGN has been in a powerful uptrend since Nov 2017. It has since predictably bounced off an aggressive short-term (20x day) moving average on a daily chart. Very bullish!

Looks like the perfect storm of: Fundamentals + Technicals + Sentiment + Sector!

Pioneer Credit Limited (ASX: PNC)

Sector: Diversified Financials
Profile: An Australian financial services provider, specialising in acquiring and servicing unsecured retail debt portfolios, the sale of non-core portfolios, brokering and introducing credit products.

Why we like it:

Fundamentals… The company has flagged of very strong growth, circa 50% in FY18 and current market conditions are conducive to further excellent growth prospects for the company in FY18 and beyond. The current low interest environment and fairly steady economy plays into the hands of PNC and we expect a possible outperformance at the half year results.

Technicals… PNC is forming a base around 3 dollars ready for the next swing higher. Looking really solid on a weekly chart, consistently bouncing of trend lines going back to December 2017. More recently the trend has strengthened further by moving away from its 20x day moving average.

“The Trend is your friend”

 

For the past five years the investment team at Equity Story has provided independent online trading advice to thousands of investors, providing them with direct buy and sell recommendations. To date, clients have received 400+ closed recommendations.

They are also the research team behind boutique wholesale fund manager – Edison Capital.

 

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.

If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a Product Disclosure Statement (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.