Finally, BHP is taking out one of the ASX’s biggest copper miners. That raises two scenarios – a) you should take copper seriously, because BHP is; and b) there’s now an OZ Minerals-sized hole in copper stocks on the ASX.
Barry Fitzgerald
Before you rush into whoever’s going to service that investor need for copper stocks-… oh wait, you’ve already jumped into Sandfire and 29Metals…
Okay, for the laggards, here are some of Garimpeiro’s favourite copper stocks, and by “favourite” we mean “junior”, because that’s where the real price action will be between now and 2025.
Rex Minerals (ASX:RXM): Trading at 23c mid-week for a market cap of $142m. Close to BHP’s Olympic Dam and OZ’s Carrapateena operations. One of Goldman Sachs’ Top 50 global copper projects.
Hammer Metals (ASX:HMX): Trading at 6.3c for a market cap of $50m. Hot Mt Isa tenement. Struck a high-grade discovery at its South Hope prospect, with follow-up exploration now planned.
Caravel Minerals (ASX:CVV): Trading at 22c for a market cap of $96m. Has a 2.84 million tonne copper resource in WA’s central wheatbelt. Just a US50c increase in the copper price would add $1 billion to that project’s net present value.
Coda (ASX:COD): Trading at 25c for a market cap of $36 million. Copper-cobalt project close enough to Olympic Dam and Carrapateena. Well-funded and recent study found it a “technically viable” 17-year project.
Red Leaf Securities
Director Jonathon Howe
Around 70% of Aussie homes now own at least one dog or cat and pet owners are spending up. You can thank Covid for that boom, along with the associated “humanisation of pets” trend.
Aussies pet owners spent more than $30 billion on their animals the last financial year. So who’s going to cash in on this fur baby boom? These stocks:
Mad Paws (ASX:MPA): Red Leaf is extremely bullish on MPA, which Howe described as a one stop shop for pet care. It boasts 300K unique customers and a handy referral partner in Qantas, which owns a 3% share of the business.
Blackmores (ASX:BKL): Yes, pet vitamins are a thing, and BKL has a range of pet healthcare products via PAW. That covers skin and coat health, joint health, digestive health, ear care and, of course, mental health and wellbeing.
Toys ‘R’ Us (ASX:TOY): Your pets need play time too. Toy ‘R’ Us has a wide range of pet products, from toys to feeding equipment, toilet training boards and pet pampering products. And it’s just cut a deal with UK-based WH Smith High Street – those are some highly pampered pooches.
Tamim Asset Management
Head of Australian equity strategies Ron Shamgar
For Shamgar it’s all about ASX tech stocks, which have had a rough 2022. While the ASX tech sector is down ~39% over a one-year period, in a positive sign the sector has rebounded ~4% in the past month.
“There’s been a lot of M&A activity in the technology sector in the last couple of months,” Shamgar said. So today’s theme is tech takeover targets.
Readytech (ASX:RDY): ReadyTech is a provider of education, workforce and government software and has been cashflow positive since it listed three years ago. And it’s confirmed a proposal from Australian private equity firm Pacific Equity Partners to acquire it at an offer price of $4.50 per share (~$500 million).
That’s about 15% upside to its current price. And Shamgar reckons PEP “could probably offer a little bit more” as RDY nicely complements another software management company it owns called Citadel.
Nitro Software (ASX:NTO): Nitro is a software provider operating in the digital document and signature sector and competes against the likes of Adobe and DocuSign. That’s brave.
It’s just entered into an agreement with Cascade Parent Limited to acquire 100% of Nitro at $2/share, and there are a couple of competitors hovering. Shamgar says Potentia Capital Management is “happy to pay $2 or even more if they’re able to access due diligence”.
“We think this will end up around $2.20 or $2.40 potentially.”
Tyro (ASX:TYR): There’s also some heat around potential bidding for this provider of EFTPOS terminals and small business loans. Westpac and NAB have expressed interest, as well as the aforementioned Potentia.
With 68,000 EFTPOS terminals, Tyro processes more than $40 billion of transactions per annum and is forecast to make $40 million of EBITDA this year.
Mike Cannon-Brookes’ Grok Ventures owns about 12.5% of Tyro and has accepted a Potentia bid on the grounds it is $1.50/share.
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