2024: 2 ASX 200 Stocks Poised for 'Big Short' Surge

Investing in the stock market is a dynamic journey, with some shares weathering tough times but eventually revealing green shoots of a turnaround. In the realm of the S&P/ASX 200 Index (ASX: XJO), catching positive momentum early can be a rewarding strategy. This article explores the insights of Fairmont Equities managing director Michael Gable, who identifies two ASX 200 stocks, Resmed CDI (ASX: RMD) and BHP Group Ltd (ASX: BHP), as potential buys.

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Resmed CDI (ASX: RMD) - Navigating Challenges


The narrative surrounding Resmed CDI shares has been challenging this year. The emergence of new GLP-1 weight loss drugs, such as Ozempic, has created concerns among investors. The fear is that a reduction in obesity could lead to fewer opportunities for a sleep apnea device maker like ResMed. Consequently, the ASX 200 stock experienced a 26.5% decline since early August. However, there's a glimmer of hope with a 15.5% revival over the past seven weeks.


Gable, optimistic about ResMed's future, anticipates a recovery fueled by short covering. He points out that ResMed's revenue rose by an impressive 16% in the first quarter of fiscal year 2024 compared to the prior corresponding period. This positive momentum is mirrored by CMC Invest, with 18 out of 24 analysts rating ResMed as a buy.


BHP Group Ltd (ASX: BHP) - Overcoming Global Economic Challenges


The weak global economy in the current year has posed challenges for commodity producers like BHP Group Ltd. The mining shares faced a 4.5% decline since mid-January due to stalled demand for resources in both western countries and China. Despite these hurdles, recent weeks have witnessed a promising 10% rally since October 20.


Gable notes that the global miner's share price is gaining momentum, signaling a potential higher share price moving forward. His team holds a bullish view on resources, specifically citing a significant 11% increase in copper production in the first quarter of fiscal year 2024. BHP's production guidance for fiscal year 2024 remains unchanged, further adding to the positive outlook.


Strategies for Investors


For investors eyeing turnaround opportunities, the key lies in strategic decision-making. Purchasing shares during a downturn not only means acquiring them at a reasonably low price but also positions investors to benefit from the subsequent recovery. Gable's insights emphasize the potential for long-term wealth accumulation for those who recognize and act on positive momentum early.


Conclusion


In the ever-evolving landscape of the stock market, identifying shares poised for a turnaround is both a skill and an opportunity. Resmed CDI and BHP Group Ltd, despite facing challenges, exhibit signs of recovery. Investors navigating these green shoots may find themselves in a favorable position for long-term wealth growth.

FAQs

1. Q: How did ResMed's revenue perform in the first quarter of fiscal year 2024?

ResMed's revenue rose by an impressive 16% compared to the prior corresponding period.

2. Q: What is the analyst consensus on ResMed (ASX: RMD)?

CMC Invest shows 18 out of 24 analysts rating ResMed as a buy.

3. Q: What challenges did BHP Group Ltd face in the weak global economy?\

Commodity producers, including BHP, faced a 4.5% decline in shares due to stalled demand for resources.
Location: Australia

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