Two stocks for your watchlist | Australian Markets

The workforce at Wilson Asset Management have one thing to inform us.

“Reporting season has so far been stronger than expected,” they write, “with around one quarter of companies beating consensus earnings forecasts and 19% falling short.”

Often the best elements of August isn’t the outcome bulletins per se, however how the market reacts. I’m speaking about how the share price strikes as soon as the news hits the exchange.

Does it soar? Drop? Do nothing?

Already we’ve seen good outcomes from JB Hi Fi and others that have been met with promoting. The business delivered, however it wasn’t enough to keep the market bidding on the stock.

One company that pursuits me on this regard is oOh! Media [ASX:OML]. This is an ‘out of home’ promoting specialist. Think billboards, bus stop advertisements, and so forth).

I’ve seen a few fund managers bandy OML round as one of their most well-liked concepts.

Yesterday, Murray Dawes known as it “Oh Dear Media.”

The stock obtained clobbered 10%. It was even worse at one level.

To put that in some context, the stock had rallied 60% since February after being in a long downtrend since 2023.

You can see the latest rally, and massive swing down yesterday right here…

What did the company say?

They’d already introduced a new CEO lately. Revenue and EBITDA are growing.

OML expects single digit income growth within the second half. They copped a non-cash hit from a misplaced contract.

Either the market didn’t just like the impairment charge they introduced or the steerage for the yr forward underwhelmed. I don’t realize it properly enough to be sure.

Cue a $100 million in misplaced worth.

Here’s the attention-grabbing half. Big quantity got here in to buy the stock because it fell towards $1.50. it completed the day just below $1.60.

This is one to watch from right here. I think that fund managers and traders may be comfortable to look by means of this short-term weak point with an eye to the long term.

Certainly, the low it hit yesterday now turns into a helpful guidepost.

If the share price goes back under that then OML received’t be value bothering with. That can be a clear signal of weak point and promoting strain.

I don’t assume that may occur. You can actually make a buy case for OML.

They have a dominant presence of their area of interest and we are able to count on a cyclical restoration in promoting as shopper spending is bolstered from rate of interest cuts and home price appreciation.

OML isn’t actually a stock I’d go for as a self directed investor. It may be a sturdy little earner, typically talking, however it doesn’t have enough of a ‘fat tail’ ingredient – a large, juicy purpose for the stock to soar – to get me excited to carry it.

Case in level on that’s a firm like Weebit Nano [ASX:WBT]. This is a area of interest technology developer. It’s not similar to OML as a result of it doesn’t have income and earnings like OML does.

However, it’s tech is relevant to the semiconductor industry – essentially the most important sector within the world proper now.

Imagine how electrified the share price might turn into in the event that they introduced any type of deal with the Mag 7 or large abroad gamers in Taiwan.

WBT is a high risk proposition, however the upside may very well be large in the event that they pull it off. It’s one of these low probability, high impression potential concepts we love right here at Fat Tail.

Somebody else likes it too, as a result of the stock goes vertical.

Check it out…

Notice one other important distinction between OML and WBT. OML can solely grow ‘into’ the (and NZ) home markets. This places a restrict on their addressable market.

A stock like WBT can promote worldwide…if they’ll win the contracts. The share market will at all times want a larger gross sales pipeline to a smaller one.

I’m not telling you to buy WBT. It’s vulnerable to large rallies, then large promote offs.

But it has good potential to ship an outsized return.

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Source: Tradingview

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Former market darling, semiconductor company Intel Corporation [NASDAQ:INTL] has fallen on robust instances.

They missed the AI GPU chip boat, with Nvidia [NASDAQ:NVDA] swooping in and taking up the long run of computing.

Their funds are deteriorating, and so they need a lot of capital investment over the following few years to play catch up.

But Softbank [TSE:9984] simply invested $2bn and the US authorities is even contemplating taking a 10% stake which might ease funding pressures.

Intel is aggressively pivoting towards changing into a main U.S. foundry — generally known as “the U.S. TSMC.” This diversification can open new income streams, particularly amid hovering demand for home semiconductor capability.

After a enormous fall over the previous few years they’ve dropped into a main buy zone proven above.

They are positively not out of the woods but, and there isn’t a legitimate buy signal but.

Since they’ve such giant aggressive pressures and weak financials, I might be inclined to attend till a semi-annual buy pivot took form earlier than getting .

But as a former market chief you’ll be able to’t low cost the likelihood that they may rise from the ashes and be presenting a great shopping for alternative quickly.

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If you will have ever thought of trading offshore however determined towards it since you thought it might be a problem, the video sequence above shall be properly value watching as a result of it demystifies the entire course of.

All advice is common advice and has not taken under consideration your personal circumstances.

Please search impartial financial advice concerning your own state of affairs, or if unsure in regards to the suitability of an investment.