Pilbara Minerals Limited

Expecting improvement in price movement: Pilbara Minerals Limited (ASX: PLS) has released its quarterly cashflow report as on October 16, 2018. Pilbara reported a negative cash flow of $29.33 mn for quarter ended 30 September 2018 and operating cash flow for the period was $2.43 mn. Cash in hand at the end of the quarter was $90.6 mn. During the Quarter, PLS sold a total of 205,766 tonnes of DSO product to Atlas Iron under the terms of a mine gate sale agreement between Atlas Iron and Pilbara Minerals. Increase in concentrate production is expected to continue with each month, reaching the designated plant tonnage throughput by the end of 2018. Technically, the scrip is trading in negative territory from September month end and is continuing with the trend with the formation of lower low on the chart. RSI at the current levels and Moving Average Convergence and Divergence (MACD) in sideways zone indicate that the price is consolidating and we expect some pull back. At current juncture, it looks better to hold and watch the move. The market cap of PLS was recorded at $1.34 bn, as on October 31, 2018. At current juncture, scrip is trading at the price levels of $O.785, and we maintain a “Hold” recommendation on the stock at the current price levels. The stock might also get a boost from change in sentiments on lithium demand and prices.
 

RCR Tomlinson Limited

Continues to face challenges in FY 19: RCR Tomlinson Limited’s (ASX: RCR) stock rose 4.60% on October 30, 2018 after the company in its Annual General Meeting for 2018 has announced the order book of $1.1 billion. The company has secured new contracts in water, rail, property services and resources. However, in FY19, RCR continues to face challenges, with some delays in contract awards and additional costs on some existing projects, which is offset by identified cost savings through overhead restructure. Cost savings are anticipated from November 2018. The company is also facing some delays and labor productivity issues in completion phases on some of the solar projects. As a result, RCR stock has fallen 23.85% in three months as on October 30, 2018. The stock is trading at the price of level $0.905 (down 0.55% on October 31, 2018), and has support at $0.86 and resistance at $1.82. Based on the foregoing, we have a wait and watch view on the stock at the current price of $ 0.905 and market capitalization of $ 241.73 mn.
 

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