Paragon Care Limited

Robust Top line performance: Paragon Care Limited (ASX: PGC) is a leading distributor of high-quality medical equipment, devices and consumables.  The company has through a recent ASX release announced that it has issued 33,934,869 fully paid ordinary shares to Pioneer Pharma Pty Ltd which is a wholly owned subsidiary of the stock exchange of Hong Kong- listed china Pioneer pharma holdings limited via a private placement in accordance with its previous announcement dated 27 august 2018. These shares were issued at a price of $0.89 per share. Hence, following the completion of this Tranche 2 placement, Paragon has 337,126,739 shares on issue and thus china pioneer holds 14.95% of those shares.
 
The firm’s revenues for the FY 2018 were up by 17% and reached $136.7 Mn. This was majorly on account of the acquisition of “Total communications” which has aided in adding high-technology revenues to its existing revenues kitty.
 
The company stated that it is well-positioned to enter FY 2019. The management of the company also stated that it could witness growth momentum on the back of recent acquisitions.
 

PGC’s Financial KPI’s (Source: Company Reports)

Meanwhile, the share price has fallen by a modest 6.76% in the past 5 days as at November 22, 2018. However, the stock performance has remained quite volatile over the period of past 6 months.

Stock Analysis from Technical Standpoint: Relative Strength Index or RSI and MACD or Moving Average Convergence Divergence or MACD has been applied on the daily chart of PGC and default values have been considered. As per the observation, the MACD line has crossed the signal line and is moving downward reflecting bearish momentum. However, 14-day RSI is about to reach the oversold zone and after it reaches there, an uptrend is expected. Considering its strong top line growth and volatile stock performance, we maintain our “Speculative Buy” recommendation on the stock at the current market price of $0.675.
 
 

NAOS Emerging Opportunities Company Limited

Investment Portfolio Outperformed Benchmark: NAOS Emerging Opportunities Company Limited (ASX: NCC) has reported the monthly investment report for the month of October 2018. During the month, the portfolio managed the return of -6.09% which signifies that it had outperformed Benchmark Small Ordinaries Accumulation Index or XSOAI. The benchmark had witnessed the fall of -9.60%. If we do not consider the market volatility, the month of October 2018 was indeed a busy one as many of the portfolio companies gave their trading updates as well as conducted their Annual General Meetings or AGMs. Some of these companies were Saunders International (ASX: SND), Enero Group (ASX: EGG) as well as Big River Group (ASX: BRI). In the month’s last day, Wingara Ag (ASX: WNR) reported H1 FY2019 result.

 
Investment Portfolio Performance (Source: Company Reports)

How NCC Plans to Position the Portfolio in FY 2019: Naos Emerging Opportunities Company Limited plans to maintain its focus on the industries which have tailwinds and these tailwinds are not impacted by the global macro factors as well as volatility. For example, the opportunities in the non-bank finance space, launch of the NBN as well as 5G networks and higher levels of the international demand for the Australian agricultural products.  

Additionally, NCC believes it would be going for the companies which are having significantly low levels of the net debt. As of June 30, 2018, NCC had total nine portfolio holdings and it had managed to garner profits amounting to $4.1 million in the year.

Technical Analysis on NCC: Two technical indicators, MACD or Moving Average Convergence Divergence and Exponential Moving Average or EMA, have been applied on the daily chart of NCC. As per the observation, the MACD line has touched the signal line and might move downwards after the cross over. However, as per the EMA, the stock price might cross the EMA and it is expected that if the cross over occurs, it would witness the upward trend. Therefore, we maintain our “Speculative Buy” rating on the stock at the current market price of A$1.190 per share.  
 

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