I’ve long held the view that eventually the rally on the Magnificent Seven tech stocks (that has already been cut down to the Super Six after Tesla had a big pullback) would peter out and then other companies in the S&P500 would get more attention for two reasons. The first reason is lower interest rates that will help the bottom lines of over-borrowed businesses.
The second reason is artificial intelligence (AI) as it applies to lots of businesses that we might be surprised to learn will do well out of this new technology.
Rotations always happen in the stock market, so the next leg up for this rally will be good for mid-cap as well as smaller companies, and sectors other than tech might become popular again.
The Wells Fargo investment team in the US like materials, healthcare and energy going forward. These are likely beneficiaries of future rotation. By the way, Nvidia has lost about 10% over the past six days but it’s still up 199% over the past year! This pullback could be an early sign of profit-taking ahead of the upcoming US reporting season, but I did like the fact that last week the Dow Jones and ASX 200 indexes were up more than the Nasdaq and S&P500, which has been driven higher on tech stocks over the past year.
This could be an early sign that old-fashioned businesses have potential to drive overall stock markets higher in the year or so ahead.
With this in mind, I’ve looked at stocks that subscribers have been asking us about in our Boom, Doom, Zoom webinar, many of which are smaller cap or non-tech stocks. I’m going to show you what FNArena’s analysts think about these stocks and then I’ve recruited Fairmont Equities’ Michael Gable to give us his updated technical analysis of them. You’ll be able to see his calls on these stocks in tonight’s Switzer Investing TV, which means we’ll have two learned looks at stocks with upside potential.
So here are the seven stocks:
- Ai-Media Technologies Ltd (AIM)
Ai-Media (AIM) is an outside-the-square play. While I’m no ‘expert’ on the company, I did interview its CEO Tony Abrahams when his company did captioning for hearing-impaired for the Foxtel group of TV channels, when I used to host the Switzer program on the Sky Business channel. The consensus call for AIM is a whopping 81.4%! This is what individual analysts think:
- Telix (TLX)
While Telix (TLX) is often asked about in our Thursday session (that I hope you log into!), the consensus of two analysts only predicts a 3.9% gain. But its share price is up 56.44% over the past year!
TLX
I’m keen to see what Mike Gable sees with TLX because it has been on a roll.
- Boss Energy (BOE)
Boss Energy (BOE) plays in the uranium space, which has become a hot political and economic topic, with Opposition leader Peter Dutton pinning his election hopes on linking uranium to lower power bills.
Analysts tip an average rise of 30.4% and the table below shows four out of four experts like the company’s prospects.
- Audinate (AD8)
While Audinate (AD8) has been a good play for us for some time, since March its share price has fallen from over $23 to the current $16.91. But the analysts see this as a buying opportunity.
- Next stop: Light & Wonder Inc. (LNW)
The next stock is a Las Vegas-based company (once called Scientific Games Corporation) now listed as Light & Wonder Inc. (LNW). The analysts see a 7.3% rise in its share price, but one company watcher sees a 3% fall ahead. That said, its stock price is up 55% over the past year, so Gable’s ‘take’ on this company will be interesting.
- Nuix (NXL)
Nuix (NXL) has been a heartbreaker of a stock after listing around $8 and then just beating $11 before management’s questionable behaviour took the share price down to 55 cents! However, it’s up 247% over the past year, so is that an uptrend we need to jump on?
Well, right now, the consensus says ‘No’, with a 6.1% downside tipped for the stock. One analyst tips a 14.68% fall, while another goes for a 2.39% rise. So once again, Gable’s chart and technical calls on NXL will be a must see.
- EchoIQ (EIQ)
The final stock, EchoIQ (EIQ) is too small for FNArena to cover but it’s up 17.86% over the month and 312% over five years. The company says it uses AI to better detect heart disease, so it’s operating in the right space tech-wise and medical-wise but, to date, their results haven’t shot the lights out. Some more research is needed on this small company before you get too serious about investing in EIQ. Once again, Gable’s take on this company should be interesting.
Don’t forget to check out his views at https://switzerreport.com.au/switzertv-monday-24th-june-2024/
Important informati on: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
