AusCann Group Holdings Ltd

AC8 Details

A Look at December 2018 Quarter: AusCann Group Holdings Limited (ASX: AC8) had highlighted the agreement with the PCI Pharma for the manufacturing of AusCann’s cannabinoid hard shell capsules. Moreover, the company had stated that it had expanded medical educational program so that the engagement with the medical practitioners in Australia can be driven. The company’s net cash used in the operating activities amounted to $1.10 million in the December 2018 quarter. The company had made payments amounting to $0.774 million towards the administration and corporate costs. The company had recently informed the market players that Chief Operating and Financial Officer named Mr. Quentin Megson is placed as the Joint Company Secretary of AusCann Group Holdings.

Net cash used in operating activities (Source: Company Reports)

The company’s net margin has witnessed an improvement in FY 2018 on the YoY basis which reflects the company’s capability to turn its top line into the bottom line. The company is also possessing a decent liquidity position placing it in a position to meet the short-term commitments. The company’s current ratio stood at 23.17x in FY 2018 reflecting an improvement of 19.4% on the YoY basis.

What to Expect from AC8: A key personnel of AusCann Group Holdings had stated that 2019 would be a crucial year for the company as the company launches solid hard shell capsules as well as move towards the commercialisation. Moreover, the company also plans to establish an R&D facility in Western Australia.

Additionally, there are expectations that the company might benefit from the strong liquidity position as reflected in its current ratio of FY 2018.

Stock Recommendation: On the daily chart of AC8, Moving Average Convergence Divergence or MACD has been applied and default values were used for the purposes. After careful observation, it was noticed that the MACD line has crossed the signal line and had trended in the downward direction. This signifies that the stock might witness bearish momentum moving forward.

However, the company might be supported by the strong liquidity standing moving forward. Also, the company’s net margins have improved in FY 2018 on a YoY basis.

Based on the backdrop of above-mentioned factors, we maintain a “Speculative Buy” rating on the company’s stock at the current market price of A$0.440 per share.


AC8 Daily Chart (Source: Thomson Reuters)
 
 

Liquefied Natural Gas Limited

LNG Details

A Look at December 2018 Quarter: Liquefied Natural Gas Limited (ASX: LNG) had earlier released the report for the December 2018 quarter. With regards to Bear Head LNG, the company stated that, in December 2018 quarter, Bear Head LNG had continued to market capacity largely to the major Western Canadian Sedimentary Basin producers. Bear Head LNG also continued to address gas path solution opportunities with the Canadian pipeline companies.


Net cash used in operating activities (Source: Company Reports)

With regards to the financial position, total cash balance of LNG as on December 31, 2018, stood at A$36.6 million as compared to A$46.4 million as on September 30, 2018 which implies the net decrease in reported cash of A$9.8 million. In the December 2018 quarter, the company’s net cash used in the operating activities amounted to A$10.48 million. In the same period, the company incurred payments amounting to $6.3 million towards the LNG project development.

What Is LNG’s Strategy: Asdemonstrated in LNG’s 2018 AGM presentation, Liquefied Natural Gas Limited strategy revolves around participating in the global LNG projects by owning, developing as well as operating greenfield LNG sites, by contributing OSMR technology solutions so that the equity ownership can be secured in new as well as existing third-party LNG projects and by licensing OSMR process technology to the third parties.

Stock Recommendation: On the daily chart of Liquefied Natural Gas Limited, Exponential Moving Average or EMA has been applied and default values were used for the purposes. After careful observation, it was noticed that the stock price has just crossed the EMA and had trended in the upward direction signifying the bullish momentum. However, in the previous one month, the company’s stock had delivered the return of -15.79%.

Based on the above-mentioned factors, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$0.495 per share (up 3.125% on 15 February 2019).   


LNG Daily Chart (Source: Thomson Reuters) 

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