Five ASX Stocks to Watch in June 2021
Here are five ASX stocks to watch in June 2021 including Adore Beauty (ABY), Diatreme Resources (DRX), Ecograf (EGR) and Wotso Property (WOT). We provide you with all the relevant information you need on these Australian stocks to watch.
Read more about Investing in Small Caps. Why we picked these ASX Small Cap gems and their outstanding performance.
Why did we choose these Australian stocks to watch?
Our analyst team selected these five ASX stocks to watch in June 2021 because of their huge growth potential. These ASX stocks to watch in June 2021 include an online beauty retailer, a mineral sands developer, a graphite developer, data technology and a diversified real estate trust. The stocks to watch operate in niche and diverse industries and have market caps between $2.6m and $330m. Making money over the long term is about being able to take advantage of short-term share price gyrations. Investors should create a watchlist of seven to ten ASX stocks so that you are always ready for buying opportunities.
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Stock to watch: Adore Beauty (ASX: ABY)
Online beauty retailer
Market Cap: $330.3m
Net Cash: $25.9m
Enterprise Value: $304.4m
Latest Price: $3.51
12-month High: $7.42
This first Australian stock to watch is Adore Beauty (ABY) and is Australia's first online cosmetic reailer.
Adore Beauty floated on the stock market in late October 2020, but the ASX stock has fallen substantially from its opening despite exceeding prospectus forecasts. Even though it was a recent float, its online business model has a twenty year history of outstanding growth in a very competitive market. It delivers 230 global and domestic brands and 11,000 products, some exclusive to Adore.
Those who bought the IPO at $6.75 per share must be hurting. An enterprise value to 2020 revenue of under four times at the float price is much lower now. We will look closer at this ASX stock to watch before the full year results.
Stock to watch: Diatreme Resources (ASX: DRX)
Mineral sands developer
Market Cap: $56.7m
Net Cash: $2.6m
Enterprise Value: $54.1m
Latest Price: $0.02
12-month High: $0.03
This company listed on the stock market is a high grade silca sand project in Quensland and a zirocon project in WA. The galara silica sand project has total resources 61.9mt @>98.5% SiO2. This is a stock to watch because of the 2019 scoping study projected $24m start up capital, production of 750ktpa, 79% recovery and a 15 year life. Diatreme Resources (DRX) main markets are in China, Japan, S Korea, Taiwan. This Australian stock to watch also includes solar PV glass market, electronics, contruction. Cyclone zircon project in Eucla Basin, WA - Total resource 211mt at 2.3% heavy minerals. Study in November 2018 projected capex of $135m, annual production of 147.7ktpa HM and mine life of 13.2 years.
Existing nearby Mitsubishi owned Cape Flattery silica mine adds credibility to this ASX stock to watch Garara silica sand project. The recent MOU offtake agreement shows progress but the project is still at a very early stage. At the Cyclone zircon project, HM grades may be too low for near term development.
Stock to watch: Ecograf (ASX: EGR)
Market Cap: $274.0m
Net Cash: $52.4m
Enterprise Value: $221.6m
Latest Price: $0.61
12-month High: $1.10
This Australian ASX stock is developing a vertically integrated high purity graphite business. The stock to watch state of the Art Battery Anode Facility planned at Kwinana, WA to produce spherical graphite products using the company's technology for sales to Asia, Europe and America. Initial capacity 5k tonnes a year with later expansion to 20k. A second plant in Europe could follow. Carbon to be sourced from recycled lithium batteries using EGR process, with possible plants in Australia, South Korea and Europe, or from its proposed Epanko grapite project in Tanzania. The recent $54.6m capital raising will fund the completion of the anode facility at the initial 5k rate. Major Project Status approved by AusGov.
Advanced EGR tech for battery anodes and lithium ion battery recycling create an edge. This ASX stock to watch has an ambitious program with multiple areas for funding and development. The first stage of the battery anode plant has been funded but is likely to be competitive.
Stock to watch: Linius Technologies (ASX: LNU)
Market Cap: $33.3m
Net Cash: $4.5m
Enterprise Value: $28.8m
Latest Price: $0.02
12-month High: $0.08
Linius Technologies is developing a media virtualisation engine which indexes, analyzes and tags each frame in a conventional video file and transforms it into a fully searchable Virtualized Video file. This allows users to create TV channels from multiple sources. It is being implemented in the Australian National Basketball League, which the company claims is a global first. Other use cases include education.
Essentially pre-revenue, but with an interesting product and a great showpiece client in Australian NBL making LNU a great ASX stock to watch. Very speculative, but worth a closer look.
Stock to watch: Wotso Property (ASX: WOT)
Diversified real estate trust
Market Cap: $213.3m
Net Cash: $2.7m
Enterprise Value: $216.0m
Latest Price: $1.31
12-month High: $1.41
Wotso Property has been formed from a three-way merger in February involving a reverse takeover of BWR Blackwall Property Trust. WOT provides flexible monthly or daily commercial office space. The company claims differentiation in its locations and branding and reports a strong recovery since June 2020. It currently operates at 71% of a capacity of over 5500 desks in now 18 locations through mainly Eastern Australia.
Since this is a newly listed combination, we are relatively cautious. In the serviced office sector, we have covered Servcorp (SRV) which has net cash, is profitable and pays a dividend.
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