West African Resources Limited

WAF Details

Quarterly Performance: West African Resources Limited (ASX: WAF) is engaged in the exploration for gold in Burkina Faso. As on 30 October 2020, the market capitalization of the company stood at ~$876.10 million. During the quarter ended 30 September 2020, the company maintained continuous production and reported an increase of 40% in gold production to 45,719 ounces at an all-in sustaining cost of US$1,009/oz. In the same time span, WAF reported decent results from deep drilling beneath M1 South underground reserves, which included 15.5m at 20.5 g/t gold and 32m at 4.9 g/t gold. The company ended the quarter with a cash balance of $102 million and generated $39 million from operating activities. In the same time span, the company reported a decrease in notional net debt by US$20 million to US$124 million.

Gold Production (Source: Company Reports)

Outlook: The company is targeting to increase stopping ore tonnes and is likely to continue underground ramp-up in 4Q20. It will continue deep drilling at M1 South and will recommence Sanbrado regional exploration program. The company also plans an early repayment of its debt.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: As per ASX, the stock of WAF is trading above its 52-weeks’ average levels but retains the potential for further growth. The stock of WAF gave a return of 39.13% in the past six months but a negative return of 10.28% in the last one month. On a technical front, the stock has a support level of ~$0.895 and a resistance level of ~$1.071. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at an upside of lower double-digit (in percentage terms). For the said purposes, we have considered Panterra Gold Ltd (ASX: PGI), St Barbara Ltd (ASX: SBM) and Regis Resources Ltd (ASX: RRL) as peers. Considering the current trading levels, decent returns in the past six months, key investment risks, and modest outlook, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.960, down by 4.001% on 30 October 2020.

WAF Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Bigtincan Holdings Limited

BTH Details

Quarterly Performance: Bigtincan Holdings Limited (ASX: BTH) is a provider of enterprise mobility software. As on 30 October 2020, the market capitalization of the company stood at ~$501.67 million. During the first quarter ended 30 September 2020, the company reported customer cash receipts of $4.5 million and cash operating payments of $11.5 million. In the same time span, the company used cash of $6.5 million from operating activities and reported a cash balance of $63 million.

Quarterly Activities (Source: Company Reports)

New Contract Wins: BTH won competitive deals, including new wins with Atlantic Broadband and TBI Inc., and demonstrated a continued expansion in existing customers. The company also won a new contract with Red Bull GmbH for $1.8 million, wherein the software will be used by Red Bull employees and distributors globally to empower users for remote onboarding and training and to promote and sell Red Bull products in customer-facing scenarios on iOS devices and phones/tablets.

Valuation Multiple: EV/Sales Multiple Based Relative Valuation (Illustrative)

EV/Sales Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: Despite the global health pandemic, the company has demonstrated strength and retains an ability to address counter-cyclical market sectors. The company is likely to hold its AGM on 25 November 2020. As per ASX, the stock of BTH is inclined towards its 52-weeks’ high levels of $1.6 but retains the potential for further growth. The stock of BTH gave a return of 39.53% in the past three months but a negative return of 10.4% in the last one month. On a technical front, the stock of BTH has a support level of ~$1.147 and a resistance level of ~$1.384. We have valued the stock using the EV/Sales multiple based illustrative relative valuation and have arrived at a target upside of lower double-digit (in percentage terms). For the said purposes, we have considered LiveHire Ltd (ASX: LVH), Nearmap Ltd (ASX: NEA), iSignthis Ltd (ASX: ISX) etc., as peers. Considering the current trading levels, decent returns in the past three months, and new contract wins, we recommend a ‘Hold’ rating on the stock at the current market price of $1.200, down by 9.434% on 30 October 2020.

BTH Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.