Revasum, Inc. (ASX: RVS)

Revasum, Inc. is based out of the United States and is engaged in designing, developing, manufacturing, and marketing a portfolio of semiconductor processing equipment in Asia, North America, and Europe. The company provides equipment solutions to enable single-wafer Silicon carbide (SiC) substrate grinding and polishing. Its grinders are used for backside thinning of a broad range of semiconductor and compound materials, including silicon carbide, silicon, gallium arsenide, gallium nitride, sapphire, germanium, etc. The company was founded in 2016 and is headquartered in San Luis Obispo, California. The current market capitalization is $45.94 million, and the current price is $0.425 per share.

Financial & Operational Updates – The company recently released its results for the half-year ending on 4^th July 2021, stating the decline in the revenues from the ordinary activities to the US $4.61 million as compared to the US $6.52 million in 1H FY20 ending on 5^th July 2020. The gross profit witnessed considerable improvement to the US $2.23 million in 1H FY20 as compared to the US $852k in 1H FY20, also the operating losses reduced to the US $2.4 million in 1H FY21 from the US $8.16 million in 1H FY20.  Besides this, the company increased its Net Tangible Assets per share to US $0.12 in 1H FY21 and ended the books with no dividends for the same period.

As per the update on 3^rd August 2021, RVS has partnered with PowerAmerica Institute (PowerAmerica), a public-private research initiative dedicated to accelerating the adoption of high performing, next-generation silicon carbide (SiC) and gallium nitride (GaN) power electronics. The collaboration will help innovate next-generation silicon carbide and gallium nitride power electronics to markets faster, reducing cost and risk factors associated with new generation technologies.

Technical Analysis: The stock was in a downtrend till it touched the lifetime lows around $0.17 and then tried reversing all losses and moving gradually upside. The relative strength index is at 47.72, which is an overbought territory, implying some short-term correction anytime soon. The 21 days simple moving average is hovering close to the stock price at $0.425, indicating a range bound movement from current levels. The stock has moved gradually since Jan’2021 levels and is currently in a low volatile zone, hence the support is placed near the current prices around $0.365 and similarly, the resistance is placed at $0.485 levels. Breaking either side of the mentioned levels can give a clear direction for the prices to follow.

Investors can consider exiting from the stock if the Resistance levels mentioned as per the technical analysis have been achieved and are subject to the factors discussed above.

Though the revenues have decreased, gross profits and operating losses have improved, which is very well reflected across the stock price movement. On the technical aspect, the stock can be analysed around the support and resistance levels, to take any investment actions. Considering the above facts, investors with high- risk appetite might consider a ‘Speculative Buy’ position at the price of $0.405, down by ~6.9%, as of 1:38 pm AEST, 10th September 2021. However, the risk levels are extremely high in view of the technical support levels.

Daily Technical Chart – RVS

Source: REFINITIV

Newpeak Metals Limited (ASX: NPM)

NPM is an Australia-based mineral resource exploration company, primarily focused on discovering a multimillion-ounce gold deposit. The key projects are Tampere Gold, Finland; Las Openas Gold and Cachi Gold in Argentina. Tampere Gold Project is made up of seven permits, which cover a total area of 286 Hectares. Its Las Openas Gold Project is located in the north-western region of the mining-friendly province of San Juan, Argentina. The current market capitalization is $13.65 million, and the current price is $0.002 per share.

Financial & Operational Highlights – On 7^th September 2021, the company announced updates on its Las Openas Gold Project, stating the arrangements for the next phase of drilling post discovery of precious metals. As per the news shared on 19^th August 2021, the company completed the first diamond drillhole at its Satulinmaki Gold Prospect in Finland and further rounds of activities are well-prepared in advance for execution. Off late the company announced its quarterly activities report for the quarter ending June 30, 2021, stating there were no cash receipts from the customers for the past 12 months straight. The lack of cash receipts put a drain on the cash balances, reducing its cash balance to $566k as of 30^th June 30, 2021, as compared to the $1.80 million as on 31^st March 2021.

Technical Analysis- The stock was in a downtrend till it touched the lifetime lows of $0.001 and still hovering at those levels within a narrow range. The relative strength index is at 51.784 which is between an overbought and oversold range, pointing at the directionless movement of the stock prices from current levels. The 21 days simple moving average is placed around the stock price at $0.0019, implying a lack of clear trend formation or trend continuation from current levels. Since the prices are in a narrow range-bound movement, the support is at $0.001, and the resistance is placed at $0.003.

Missing cash receipts from its customers, volatile commodity prices and lifetime low stock prices, devoid the rationale of investing at these levels. Unless the financial improves and the prices approach the resistance, it is suggested to ‘Wait’ as per the risk and reward ratio at the closing price of $0.002, as of 10^th September 2021.

Daily Technical Chart – NPM

Source: REFINITIV

Michael Hill International Limited (ASX: MHJ)

MHJ is an Australia-based company engaged in the retail sale of jewellery and related services sector. The Company operates through three segments: Australia, New Zealand and Canada. The Company offers various products and services under the following categories: engagement and weddings, jewellery, gifts and collections. Its engagement and weddings category include engagement rings, promise rings, wedding bands and bridal sets. The current market capitalization is $322.27 million, and the current price is $0.830 per share.

Financial & Operational Updates – as per the exchange announcement of 23^rd August 2021, the company announced its financial results for the FY21, stating a decent increase in revenue by 13.1% to $556.5 million compared to the revenues of $492.1 million in FY20. The company posted Net Cash of $72.4 million in FY21, a good increase from last year stated as $0.5 million in FY20 along with zero debt. Store network reduced from 290 to 285 from FY20.

On the operational front for FY21, it reported an increase in Gross Profit by 17.0%, to $348.9 million as compared to the revenues of $298.2 million in FY20. Due to COVID-19, the company has already lost 3,458 trading days in Australia, which resulted in a decline of 2% in total sales, thereby having an impact on its earnings.

Technical Analysis: The stock showed an uptrend after touching the recent lows in 2020 of $0.22 and since then formed higher highs and higher lows, with few dips occasionally. The relative strength index is at 46.898, which is an overbought territory, implying some short-term correction anytime soon. The 21 days simple moving average is hovering close to the stock price at $0.834, indicating a ran bound movement from current levels. The stock has moved gradually upside and sold off after touching the recent highs of $0.935 and is currently in a narrow to downwards range, hence the support is placed very cautiously at $0.76 levels and then $0.715, below which further pain can be witnessed in the stock prices. The resistance is placed at $0.890 and near the recent highs around $0.94 levels. Breaking either side of the mentioned levels can give a clear direction for the prices to follow.

Though the revenues have improved along with the gross profits, the congestion in the stock prices is telling another story. Unless we see a breakout in the stock price across its support or resistance level, we prefer to play a cautious stance on the stock and hence suggests investors to ‘Watch’, till the prices reaches the actionable zone. The stock was reviewed at the closing price of $0.83., as of 10^th September 2021.

Daily Technical Chart – MHJ

Source: REFINITIV

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

Note 2: Investment decisions should be made depending on the investors’ appetite for 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 the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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