Why this analyst is picking ARM as his Hot Stock

In a recent interview on CNBC Africa, Wessel Joubert, Investment Associate at Cannon Asset Managers, shared insights on why he has chosen African Rainbow Minerals (ARM) as his 'Hot Stock' pick. Joubert highlighted that ARM presents an interesting investment opportunity as the company has not fully capitalized on the surge in iron ore prices when compared to its peers in the mining sector. He pointed out that ARM has a more South African-focused risk profile and may have been overlooked by mainstream analysts, allowing it to potentially emerge as a hidden gem in the market. Despite the potential for lag in performance compared to other iron ore miners, Joubert emphasized the importance of evaluating companies within the context of their operating industries to make informed investment decisions. The significant increase in iron ore prices, currently above $100 per ton, has been driving the stock prices of mining companies like ARM. However, Joubert cautioned that an unwinding of iron ore prices could lead to a sudden collapse in the sector, potentially impacting ARM's share price. While discounts in stock prices may not always resolve quickly, Joubert remains optimistic about the investment potential of ARM in the current market landscape.