On another down day for the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) there are several stocks soaring higher for a variety of reasons, with a couple of them having potentially more mini-gains ahead of them yet. Let's take a look at what's causing the buyer support and assess the chances of these stocks climbing higher.
ResMed Inc. (CHESS) (ASX: RMD) is a manufacturer and retailer of sleep treatment and respiratory support products that are primarily sold into the US market. The company has recently brought several market-leading new products to market and is enjoying a sales upswing as a result.
The other powerful tailwind the business is enjoying is the strengthening US dollar as Australian investors of the chess depositary instruments are in effect purchasing a 1/10th interest in the NYSE-listed shares. The stock has climbed 1.8% to a record high of $9.04 today and may kick on this week if the US Fed hints at a revised monetary policy in its policy statement this Wednesday.
Martin Aircraft Company Ltd (ASX: MJP) is from New Zealand, the home of adrenaline-inducing activities and this company's jetpacks for humans fit nicely into that tradition. The stock has been on a bumpy ride since listing and climbed 9.35% to 76 cents today, although it released no specific news to the market.
The company claims the jetpack is set to act as a disruptive technology much like the helicopter did when first developed. Apparently pilot qualifications are easy to obtain and with a flight speed of around 74km/h at maximum altitudes of 3,000ft prospective investors could try before they buy.
The company announced that on March 12 it hosted US congressional staff members at its production facilities in Christchurch, New Zealand. No doubt the ambitious Kiwis were keen to impress their US powerful visitors with the flying machines.
iiNet Limited (ASX: IIN) has jumped 4% to $8.84 today despite being the recent subject of a takeover bid from TPG Telecom Ltd (ASX: TPM) that effectively valued the company at $8.60 per share, excluding the rights to a 10.5 cent dividend iiNet shareholders are entitled to.
Now the stock has gone without the rights to that dividend the 24-cent premium to the takeover offer price suggests investors are speculating that a better offer will materialise for the company. The most likely candidate is the owner of Optus, Singapore Telecommunications Ltd (CHESS) (ASX: SGT), which may see the combined TPG/iiNet entity as a serious threat to its competitive position.
It seems a risky strategy for investors to bid over the takeover price and those doing so must have a degree of confidence in another company coming in with a better offer.
Investors are best off watching this story from the sidelines as the risk / reward profile does not seem good, especially when there are other stocks heading towards the middle of a growth sweet spot to consider right now.
