1. Kairos Minerals Limited (Recommendation: Speculative Buy, Market Cap: ~$53.64 million)

Kairos Minerals (ASX: KAI) is a diversified West Australian-based exploration company that is focused on exploration and development of its 100%-owned Pilbara Gold-Project and Roe Hills Project.

• Decent Exploration Results: KAI has received encouraging initial results from composite samples, particularly from the Caliburn prospect where it intersected wide zones of shallow gold mineralisation. In a recent exploration update, the company notified that it has discovered extensive new nickel-copper and gold targets at its 100%-owned Roe Hills Project.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash and cash equivalent of $10.45 million, up from cash balance of $2.58 million as at 30 June 2020. Further, the company had lease liabilities of $0.326 million. As a result of surge in exploration related expenses, cash balance declined to $8.3 million as of 30 June 2021. Current ratio for H1FY21 stood at 23.82x, higher than 3.42x in H1FY20.

Current Ratio Trend (Source: Analysis By Kalkine Group)

• Outlook: Looking ahead, the company is focused on interpreting the results from the Roe Hills geochemical sampling program. Further, the company is focused on conducting further RC drilling at the Caliburn prospect. The company has witnessed impressive broad zones of strong gold mineralisation in the initial assays from the Old Faithful prospect at the Mt York Project, and it expects to see a lot more coming in the coming period.

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has corrected by ~13.88% and is currently trading lower than the average 52-week price level band of $0.024 -$0.091.
• On a TTM basis, the stock is trading at a Price to Book multiple of 2.2x, lower than the industry median of 2.6x, implying undervaluation.
• Key Risks: Foreign Currency risks, Shortage of Skilled Labour, Exploration-Related Risks, etc.
• Considering the company’s ongoing exploration programs, positive explorations results, current trading level, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” rating on the stock at the current market price of $0.030, as on 10 September 2021, 3:30 PM (GMT+10), Sydney, Eastern Australia.

KAI Weekly Technical Chart, Data Source: REFINITIV

2. DataDot Technology Limited (Recommendation: Speculative Buy, Market Cap: ~$11.19 million)

DataDot Technology Limited (ASX: DDT) is involved in the manufacturing and distribution of asset identification and digital protection solutions.

• Improved FY21 Results: For the full year FY21, DDT reported a net profit of $1.23 million, up from $29,203 in FY20, driven by the significant reduction in the company’s cost base supported by improved revenue streams from a small number of international clients, largely in the automotive sector. The revenues from ordinary activities stood at $3.896 million in FY21, up 3.22% on the previous year.
• Cash and Debt Scenario: As at 30 June 2021, the company had cash balance of $2.32 million, up from $1.005 million as at 30 June 2020. Further, the company had nil debt in its balance sheet. Current ratio for FY21 stood at 5.07x, up from 3.6x in FY20.

Current Ratio Trend (Source: Analysis by Kalkine Group)

• Outlook: DDT is now working with its global partners and distributors to pursue new opportunities to grow its international customer base for the microdot and trace product lines. Further, the company is focused on leveraging its PropertyVAULT’s growing public profile and on-line traffic to grow its direct-to-consumer and wholesale product sales.
  

SWOT Analysis:

Stock Recommendation:

• The stock has provided a return of ~80% in the last three months and ~38.46% in the last six months period.
• The stock has 52-week high and low level of $0.011 and $0.005, respectively.
• Looking ahead, the company is focused on improving the technical performance and cost-effectiveness of its products and their application processes.
• On a TTM basis, the stock is trading at a price-to-book multiple of 3.5x, lower than the industry (technology) median of 10.8x, implying undervaluation.
• Considering the company’s improved financial performance in FY21, robust balance sheet, modest outlook, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” rating on the stock at the current market price of $0.0085, as on 10 September 2021.

DDT Daily Technical Chart, Data Source: REFINITIV

3. Kingfisher Mining Limited (Recommendation: Speculative Buy, Market Cap: ~$8.02 million)

Kingfisher Mining Limited (ASX: KFM) is a copper-gold development company focused on increasing shareholder wealth through the acquisition, exploration and development of mineral resource projects throughout Western Australia. 

• Positive Exploration Results: In a recent exploration update, the company confirmed that it has discovered new high-grade copper and associated gold mineralisation at the Green Hills Prospect. Further, the maiden diamond drilling program at Boolaloo Project has shown multiple zones of mineralisation at Copper Strike of up to 2.68% Cu and 0.49g/t Au.
• Cash and Debt Scenario: As at 31 December 2020, the company had cash of $5.58 million and nil debt in its portfolio. During the June 2021 quarter, the cash was reduced to $4.3 million.
• Outlook: The company is expected to continue its field work, including mapping and infill rock chip sampling at Boolaloo Project in the last quarter of 2021. The company will soon start RC drill campaign to complete first-pass drilling at Green Hills, Erny Bore and one of the bedrock conductor targets identified from the recent airborne electromagnetic survey.

Cash Balance Trend (Source: Analysis by Kalkine Group)

SWOT Analysis:

Stock Recommendation:

• Over the last three months, the stock has corrected by ~11.62% and is trading lower than the average 52-week price level band of $0.170 and $0.330, offering a decent opportunity of accumulation.
• On a TTM basis, the company is trading at a price-to-book multiple of 1.1x, lower than the industry (basic materials) median of 2.6, thus seems undervalued.
• Key Risks: Exploration-Related Risks, COVID-19 Pandemic Risks, Fluctuations in Gold Copper Prices, etc.
• Considering the company’s decent exploration results, ongoing exploration programmes, current trading level, valuation on TTM basis, and associated key risks, we give a “Speculative Buy” recommendation on the stock at the closing price of $0.190 as on 10 September 2021, 3:30 PM (GMT+10), Sydney, Eastern Australia.

KFM Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined:

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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