ASX Hot Stocks: Wesfarmers, Seek and Coffey

ASX loses 0.5%, dragged down by miners

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published May 16, 2013 5:01 pm AEST

The S&P / ASX 200 Index (Index: ^AXJO) (ASX: XJO) has closed lower, losing 0.5% to 5,165.7 pulled down by miners, after most commodities fell overnight. That's despite the Dow Jones rising 0.4% and the S&P 500 adding 0.5% overnight.

Here's why these three stocks are hot right now.

Wesfarmers Limited (ASX: WES), the owner of Coles, Bunnings, Kmart and Officeworks as well as coal and insurance businesses, saw its shares rise 3.3% to $44.20. Perhaps it was a sign of investors looking for diversified, defensive businesses, and switching out of resources stocks. Still, at current prices, Wesfarmers looks expensive on a P/E ratio of 23 and paying a dividend yield of less than 4%.

Seek Limited (ASX: SEK) saw its shares climb 8.7% to $11.10, after the company was named as a new member of the MSCI Australia Index. Index funds, and some fund managers that are benchmarked against that index, will likely be forced to buy shares in the company following its addition. Seek's shares have risen 59% since the start of the year, as the company looks offshore to continue its stellar Australian growth.

Coffey International (ASX: COF) jumped 29.2% to 15.5 cents, recovering some of its recent falls. Despite the recovery, Coffey is still 50% below its 1 month high. Coffey saw its shares fall more than 40% on Monday this week, after the mining services company announced that it had seen 54 contracted projects delayed or cancelled. While its fairly common knowledge resources projects are being canned, surprisingly a number of projects in the oil & gas sector were also being cancelled.

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