Five Stocks on Our Radar For June 2024

In this article, we will explore five stocks we are considering to add to our growth portfolio for June. These include DroneShield Ltd (ASX: DRO), which has surged by 180% year-to-date, driven by its cutting-edge counter-drone technologies and recent high-value government contracts. Clarity Pharmaceuticals Ltd (ASX: CU6) stands out for its innovative radiopharmaceutical treatments, bolstered by strategic partnerships and promising clinical trials. Yancoal (ASX: YAL) demonstrates resilience and impressive growth in the coal mining sector, while Alumina Ltd (ASX: AWC) navigates a transformative acquisition, enhancing its position in the aluminum industry. Lastly, Pro Medicus Limited (ASX: PME) showcases robust performance in healthcare technology, fueled by lucrative contract wins and consistent profitability, making it an attractive prospect for portfolio expansion. DroneShield Ltd (ASX: DRO) - Up +180% year-to-date DroneShield (ASX: DRO) offers advanced AI-based platforms designed to counter threats from drones and autonomous systems. Their product range caters to various applications, including terrestrial, maritime, and airborne platforms. They serve a diverse clientele, including military and intelligence agencies, governments, law enforcement, critical infrastructure, and airports. Recently, DroneShield secured a significant repeat order worth $5.7 million from a U.S. Government customer for its Counter-Unmanned Systems (C-UxS) solutions. This contract highlights the increasing demand for advanced counter-drone technologies and reinforces the company's reputation in the defense sector. Delivery of these systems will be phased throughout the year. Financially, DroneShield is on solid ground. The company boasts a strong balance sheet with more cash than debt and has been profitable over the last twelve months, with further net income growth expected this year. Anticipated sales growth aligns well with the rising demand for counter-drone solutions. The company's impressive gross profit margins indicate operational efficiency, while its liquid assets comfortably exceed short-term obligations, ensuring financial stability. In terms of market performance, DroneShield has delivered significant returns over various periods. The stock has shown notable gains over the last week, month, and three months, reflecting strong recent performance. Additionally, long-term investors have seen substantial returns over the past year, five years, and even the last decade. The recent price uptick over the last six months further underscores positive market sentiment and investor confidence. Given its strategic market position, robust financial health, and consistent performance, DroneShield Limited represents a compelling investment opportunity. The recent U.S. Government contract strengthens its credibility and growth potential. We are considering adding DRO to our growth portfolio. Clarity Pharmaceuticals Ltd (ASX: CU6) - +121% year-to-date Clarity Pharmaceuticals Ltd (ASX: CU6) is a clinical-stage radiopharmaceutical company at the forefront of developing innovative treatments for serious diseases. Specializing in Targeted Copper Theranostics (TCTs) for cancer treatment, Clarity leverages its proprietary SAR Technology Platform to develop Cu-64 based products. Cu-64, with its 12.7-hour half-life, offers significant logistical advantages over traditional isotopes like Ga-68 and F-18, which have much shorter half-lives and pose supply challenges. This innovation is crucial for expanding access to positron emission tomography (PET) imaging, particularly for underserved populations, including African Americans and veterans who face higher incidences of prostate cancer. A significant development for Clarity is the partnership with SpectronRx, a private Cu-64 supplier in the United States. This strategic alliance addresses the supply constraints of traditional isotopes and enhances Clarity’s ability to provide a reliable, scalable, and logistically seamless supply chain. The partnership is expected to commence supply before the end of 2024, with an initial three-year agreement period. SpectronRx’s expertise in radiopharmaceutical development and manufacturing will be instrumental in reducing the time to market for new therapies, thus driving greater profitability. Clarity's commitment to advancing its clinical pipeline is evident with the ongoing Phase III trials for 64Cu-SAR-bisPSMA in prostate cancer. The first trial focuses on a pre-prostatectomy setting, while the second targets biochemically recurrent prostate cancer. These trials are pivotal for the commercial launch of 64Cu-SAR-bisPSMA, potentially establishing it as a best-in-class diagnostic and therapeutic agent. Financially, Clarity has shown robust performance, with high returns over the past year and strong liquidity. The stock has appreciated significantly over the last six months, reflecting investor confidence in its strategic direction and growth prospects. Clarity’s innovative approach and strategic partnerships position it well to lead the radiopharmaceutical industry. We are considering Clarity as a potential speculative hyper-growth trade. Yancoal (ASX: YAL) - Up +24% year-to-date Yancoal (ASX: YAL), a shining star in our mining portfolio, continues to outperform expectations, showcasing remarkable growth since the start of the year. With a staggering 25% increase in share price year-to-date and an impressive 31% surge since our initial "Buy" recommendation, Yancoal remains a hidden gem in the coal mining sector. In the first quarter of 2024, Yancoal demonstrated its resilience and strength, with notable achievements across various fronts. The company reported an average realized coal price of A$180/t, significantly surpassing operating costs and reinforcing its robust cash inflows. With a cash balance of $1.66 billion as of March 31st and no interest-bearing loans, Yancoal stands on solid financial ground, poised for future growth opportunities. Despite facing challenges such as a decline in saleable production volumes compared to the previous quarter and a slight dip in realized coal prices, Yancoal's strategic positioning and operational efficiency shine through. The company's Total Recordable Injury Frequency Rate remains impressively low, underscoring its unwavering commitment to prioritizing the safety of its workforce. In navigating the complex coal market landscape, Yancoal continues to exhibit adaptability and resilience. Despite facing headwinds such as weak demand in thermal coal markets due to a mild winter in the northern hemisphere and soft global economic conditions, Yancoal's large-scale, low-cost production profile positions it favorably amidst market fluctuations. Furthermore, the company's metallurgical coal segment, while impacted by cyclone activity and economic downturns in key regions, maintains stability and resilience in the face of challenges. Looking ahead, Yancoal remains steadfast in its commitment to delivering value to shareholders. With production guidance for 2024 remaining unchanged and a focus on optimizing operational efficiencies, the company is well-positioned to capitalize on future opportunities and sustain its growth trajectory. Alumina Ltd (ASX: AWC) - Up +103% year-to-date Alumina (ASX: AWC) is a key player in the global aluminum industry, primarily engaged in bauxite mining and alumina refining through its 40% stake in Alcoa World Alumina and Chemicals (AWAC), with Alcoa Corporation (Alcoa) holding the remaining 60%. This strategic partnership positions Alumina Limited as a significant entity within the aluminum supply chain, benefitting from Alcoa's extensive operational expertise. On March 12, 2024, Alumina Limited announced a pivotal development: a Scheme Implementation Deed (SID) with Alcoa Corporation. Under this agreement, Alcoa proposes to acquire 100% of Alumina Limited’s fully paid ordinary shares via a scheme of arrangement. An Amending Deed has been executed to address specific considerations for CITIC Group, Alumina’s second-largest shareholder, and the Depositary and/or Custodian of Alumina’s American Depositary Receipt Program (ADR program). This adjustment ensures compliance with the US Bank Holding Company Act of 1956, which restricts CITIC's voting interest in U.S. public companies to 5%. The transaction has advanced significantly, with Alcoa lodging a preliminary proxy statement with the US Securities and Exchange Commission on May 20, 2024. This statement sets the stage for an Alcoa stockholder meeting to approve the issuance of Alcoa common stock and New Alcoa Preferred Shares. Concurrently, Alumina Limited has submitted a draft scheme booklet to the Australian Securities and Investments Commission, detailing the transaction, financial information, and an independent expert’s report. Regulatory approvals, including those from the Australian Foreign Investment Review Board and Brazil's antitrust regulator, are still pending. Financially, we anticipate net income growth for Alumina this year, coupled with operations at a moderate debt level. The company has showcased robust performance, yielding significant returns over the past three months and experiencing a notable price increase over the last six months. Considering these factors alongside the potential advantages from the proposed transaction, we are contemplating adding AWC to our growth portfolio. This acquisition by Alcoa Corporation not only offers a premium for shareholders but also aligns Alumina with a leading industry player, thereby enhancing future growth prospects. Pro Medicus Limited - Up +25% year-to-date Pro Medicus Limited (ASX: PME) has established itself as a leader in the development and supply of healthcare imaging software, specializing in Radiology Information System (RIS) software and services. Operating across Australia, North America, and Europe, PME serves a wide array of clients including hospitals, diagnostic imaging groups, and related health entities. Pro Medicus recently secured five new contracts totaling a minimum value of $45.0 million marks a significant milestone for the company. The contracts signed by PME's U.S. subsidiary, Visage Imaging, Inc., demonstrate the company's broad market appeal and diversified customer base. Ranging from multi-year agreements with private radiology groups to partnerships with prestigious pediatric hospitals and cancer centers, these contracts showcase the versatility and reliability of PME's offerings. Moreover, with a total contract value (TCV) for the current financial year now standing at $245 million, PME has further solidified its revenue stream and market position. Financially, PME exhibits strong performance indicators, including a track record of dividend increases for eight consecutive years. Despite trading at a relatively high P/E ratio compared to near-term earnings growth, the stock demonstrates low price volatility and has delivered substantial returns over various time frames. With liquid assets exceeding short-term obligations and operating with a moderate level of debt, PME maintains a solid financial footing. We project profitability for the current fiscal year, aligning with PME's consistent profitability over the past twelve months. These factors, coupled with the company's impressive return history and recent contract wins, position PME as an attractive investment opportunity in the healthcare technology sector. While the stock may trade at a premium relative to earnings in the short term, its potential for continued expansion and profitability.