This week we saw Greta Thunberg’s resources pick, some ridiculously unloved biotechs, and a chance to get in for the long haul on some of the world’s most successful companies.

Jess Amir

Market strategist, Saxo Markets

The general sense is the Federal Government’s revised 2022-23 Budget has some nice, fiscally responsible measures. Jess Amir told Stockhead overall the budget forecast is for slower GPD growth and only $10 billion of net new spending and savings of around $29 billion to fund a significant new agenda.

Still, something is better than nothing, and Amir has broken down some areas where spending points to potential growth for your favourite small caps.

The $20bn ‘green transformation’ to net zero: Focus on lithium, rare earths, hydrogen, with companies like Pilbara Minerals (ASX:PLS), Lynas (ASX:LYS) and Iluka (ASX:ILU) on watch.

Building, construction, infrastructure and mining: Focus on stocks like Transurban (ASX:TCL), Abbri (ASX:ABC), and banks that could benefit from housing policies.

Health and aged care, including $2.5b to improve facilities and staffing: Focus on health care businesses like Ramsay Health (ASX:RHC), Sonic Health Care (ASX:SHL), ResMed (ASX:RHC), Healius (ASX:HLS) and Australian Clinical Labs (ASX:HCL).
 

Guy Le Page

Director, RM Corporate Finance

Guy hit the ASX Connect conference in Busselton, where his eye was wateringly focused this week on uranium stocks because a) uranium was up 4.5% as government policy gains momentum; and b) Greta “Yellow Cake” Thunberg is now a true believer in uranium.

What times we live in!

Le Page reckons the uranium price is building a new base before a breakout well above US$65/lb, the magic figure that gets producers back online. In a small pool, one standout at ASX Connect was 92e (ASX:92e) with five projects in Canada’s Athabasca Basin. Its last campaign saw over 80% of drillholes hit paydirt, and the winter program should only expand the resource.

With over $10 million in cash and an enterprise value of around $40 million, Le Page says this is “definitely one to put on the watch list”.
 

Tony Locantro

Investment manager, Alto Capital

It’s not been a good year for ASX biotech stocks – with higher interest rates comes lower tech valuations. And as long as inflation remains front and centre, Locantro says expect even more poor performance.

Not great if you’re trying to get a new drug to market, but as an investor, Locantro reckons right about now is like buying beachside property in the early ’90s – i.e “an extreme value proposition with multiple upside potential”.

“It is that unloved, it’s ridiculous.”

Here’s Tony’s three most undeservingly unloved stocks right now.

Radiopharm Theranostics (ASX:RAD) – Between 20 to 40 per cent of patients with cancer end up developing metastatic cancer to the brain. It’s a huge market and RAD is ready to enter Phase 1 trials in prostate, pancreatic, breast and gastric cancer. It’s trading at 0.12c after peaking at 0.24c in July but Locantro puts that down to a recent rights issue.

Proteomics (ASX:PIQ) – Has a blood test called ‘Promarker D’ which detects kidney function decline in type 2 diabetics up to four years before it takes place. It’s the only available test capable of predicting the onset of the disease in patients with diabetes and no existing DKD.

PIQ has a letter of intent signed with Sonic Healthcare in the US to assist with distribution, which Locantro says is “the gold standard of detection in diabetic kidney disease.”

It’s trading at 89c off a yearly high of $1.34.

And Exopharm (ASX:EX1) has two lead programs in the pipeline in the area of genetic medicine, focused on treating cystic fibrosis using exosome-based additive gene therapy and elastin deficiency.

“The share price is at 10.5c – an all-time low, and again, like Radiopharm, the market is massive,” Locantro says.
 

Anthony Doyle

Head of investment strategy, Firetrail Investments

Misunderstood, unloved or unrecognised – it doesn’t sound particularly “investible”.

But Anthony Doyle says Firetrail’s new S3 Global Opportunities Fund isn’t about instant cash rewards. It focuses on long-term exposure to a “high conviction, concentrated portfolio of global equities”. This is a five-year proposition, and a solid portfolio core component while you wait for a positive change cycle.

You’ll get exposure to some big global names trading at discounts such as industrial gases company Air Liquide (EPA:AI), global agriculture leader Archer Daniels Midland (NYSE:ADM), multinational heating, ventilation and air conditioning company Carrier Global (NYSE: CARR), and semiconductor specialist Micron Technology (NASDAQ: MU).

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

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