Stocks’ Details

Fiducian Group Limited

FID Outperformed All Ordinaries Index by 610%: Fiducian Group Limited (ASX: FID) provides specialist financial services to financial advisers and retail and wholesale clients in Australia. The market capitalisation of the company stood at ~$193.37 million as on 6^th January 2021. The company operates a profit-generating sustainable business model. With respect to funds management business, the company operates 15 Managed Funds, comprising 4 Diversified Funds, 4 Sector Funds, 7 Specialist Funds.  For the quarter ended 30^th September 2020, the company’s cash flow was in-line with expectations. Receipts from the customer for the period stood at $14.2 million, and net operating cash flow after expenses and tax stood at $2.4 million.

During FY20, the company was focused on business growth even in uncertain economic conditions posed by COVID-19. The company recorded a statutory NPAT of $10.5 million in FY20, reflecting a rise of 1% over pcp. During 2H FY20, the company declared a final dividend of 11.50 cents per share. Since June 2012, the company has outperformed All Ordinaries Accumulation Index by 610% (including dividend).

FID vs All Ords Growth (Source: Company Reports)

Outlook: With respect to funds management business, the company is likely to leverage the Manage-The-Manager model and expand in new markets. The company would continue to attract high-quality planners and expand through value accretive acquisitions with respect to the financial planning business.

Stock Recommendation: The company closed the September 2020 quarter with a cash balance of $12.1 million. In the last six and nine months, the stock of FID has moved up by 23.09% and 39.95%, respectively. As a result, the stock is trading towards its 52-week high of $6.270. On TTM basis, the stock is trading at a P/E multiple of 18.2x as compared to the industry median (Financials) of 13.8x. We have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$5.13 and a resistance level of ~$6.14. Considering the price movement in the past few months, higher valuation, current trading level and RSI level, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $6.010 per share, down by 2.277% on 6^th January 2021.

Orthocell Limited

Australian Market Approval for CelGro®:  Orthocell Limited (ASX: OCC) is involved in the development and commercialisation of cell therapies and biological medical devices. The market capitalisation of the company stood at ~$90.54 million as on 6^th January 2021. Recently, the company notified the market that it has received Australian Market Approval to supply CelGro® in dental bone and tissue regeneration procedures. This approval validates the CelGro® platform technology with a respected regulator and places the company in a decent position to attain further approvals for the manufacture and supply of CelGro® in nerve and tendon repair. During the September 2020 quarter, the company has continued to work with Greenleaf Health, which is a US-based specialist regulatory consulting firm with expertise in cell and gene therapy product development and US FDA regulatory submissions and interactions. The net operating cash outflow for the period stood at $1.5 million, with most of the expenditure incurred for commercial and R&D related activities. For the year ended 30^th June 2020, the company recorded total revenues from continuing operations of $918,848 as compared to $1,239,371 in FY19. Loss for the year amounted to $6,151,029 against $5,852,214 in FY19.

Cash Flow (Source: Company Reports)

Outlook: The company seems to be well-placed for attaining US-FDA approval, which is targeted in CY2021. OCC continues to progress discussions with potential global partners for managing the distribution and marketing of CelGro®. In addition, the company is well-positioned to execute its partnering strategy as well as to drive revenue.

Stock Recommendation: As on 30^th September 2020, the cash balance of the company stood at $18.9 million. On a TTM basis, OCC has an EV/Sales multiple of 84.5x as compared to the industry median (Biotechnology & Medical Research) of 31.5x. The stock of OCC has moved up by 43.93% in the last nine months. In addition, we have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$0.377 and a resistance level of ~$0.488. Considering the price movement in the past few months, higher valuation, and RSI level, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $0.475 per share, down by 3.062% on 6^th January 2021.

Lepidico Ltd

Repayment of Convertible Notes: Lepidico Ltd (ASX: LPD) is engaged in the exploration and development of minerals. The market capitalisation of the company stood at ~$82.97 million as on 6^th January 2021. Recently, the company announced that it is engaged in confidential discussions with up to 6 lithium hydroxide consumers and 3 caesium/rubidium consumers. The company added that the offtake discussions for the high-value lithium, caesium and rubidium products to be produced from its Phase 1 Project are likely to gain momentum in January 2021. In another update, the company stated that it has repaid C$5 million convertible notes held by AIP Global Macro Fund L.P. The repayment was financed through proceeds received from the recently announced strategic collaboration and technology licence agreement with Cornish Lithium Ltd, and its 2020 R&D tax credit.

September 2020 Quarter Highlights: During September 2020 quarter, the company has commenced Engineering, Procurement and Construction Management (EPCM) tender process for the Karibib concentrator and Abu Dhabi chemical plant. LPD has received an offer for the supply of 4.5MVa power at 66kV to the Karibib Project. Net cash outflow from operating and investing activities stood at $485k and $253k, respectively.

Cash Flow (Source: Company Reports)

Outlook: Looking forward, the company is planning to continue to execute its strategy to become a vertically integrated lithium chemical company. This is likely to be supported by the commercialisation of its proprietary technologies including L-Max®, S-Max® and LOH-Max® and the ongoing growth, exploration and development of its portfolio of lithium interests.

Stock Recommendation: As a result of the C$5 million convertible notes repayment, the company had a cash balance of $3.2 million and nil debt. The stock of LPD has surged 100% and 125% in the last one and three months, respectively. As a result, the stock is trading towards its 52-week high of $0.020. In addition, we have considered 14-day RSI, and it was observed that the stock is currently in the overbought zone and may witness some correction, going forward. On a technical analysis front, the stock has a support level of ~$0.011 and a resistance level of ~$0.022. Considering the price movement in the past few months, higher valuation, and RSI level, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $0.019 per share, up by 18.749% on 6^th January 2021.

Comparative Price 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.