Harris Technology Group Limited (ASX: HT8)

HT8 is an online-based retailing company providing Information Technology/Consumer Electronics (IT/EC) to small and medium-sized businesses through its site, Amazon, ebay, and Kogan and Catch. The current market capitalization as of 20^th September 2021 stood at $35.73 million, trading at a stock price of $0.115 per share.

Financial & Operational Updates –As per the release of investor presentations on 7^th September 2021, revenue was up by ~206% Y-o-Y to $41.8 million in FY21 as well as NPAT grew ~73.7% Y-o-Y to $1.75 million in FY21. The company managed to be profitable despite COVID-19 circumstances. Net Debt reduced to $2.44 million in FY 21 as compared to $5.83 million in FY20, a fall of ~58% Y-o-Y. On the asset side, Cash at the end of FY21 was reported at $3.26 million versus $1.17 million at the end of FY20.

Technical Analysis: HT8's prices sustaining above a downward sloping trend line breakout for the past 2 months, indicating the possibility of an upside direction. Prices are also sustaining above the major psychological support level AUD 0.100, further supporting a positive bias. The momentum oscillator RSI (14-period) is placed at the mid-range, at ~45.258 levels. However, the CMP is hovering around the 21-period SMA and unable to provide any clear indication about the short-term trend.

With a substantial increase in revenue and net profit in FY21, the company is indicating a growing future. On the technical front, considering CMP touching almost the support and the RSI level, investors with a high-risk appetite might consider a ‘Speculative Buy’ position, incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the closing price of $0.115, as of 20^th September 2021, down by ~4.167%. However, the risk levels are extremely high in view of the increasing competition from traditional retailers. 

Daily Technical Chart – HT8

Source: REFINITIV

Uniti Group Limited (ASX: UWL)

Incorporated in 2017, UWL provides telecommunication services in three segments: Wholesale & Infrastructure (W&I), Communications Platform-as-a-Service (CPaaS), and Consumer & Business Enablement (CBE). The current market capitalization as of 20^th September 2021 stood at $2.77 billion, at a stock price of $3.95 per share.

Financial & Operational Updates – As per the announcement on 14^th September 2021, an allegation was made on one of the company’s directors, Mr. Vaughan Bowen, regarding his trading of shares in Vocus Group limited in June 2019. Full-year report for 2021 was published on 24^th August 2021, where the revenue was up by 175% Y-o-Y to ~$159.9 million in FY21 versus ~$58.2 million in FY20, followed by a jump in EBITDA by 254% Y-o-Y to ~$93.7 million in FY21 versus ~26.5 million in FY20. Further, Operating Cash Flow surged by ~325% Y-o-Y to $91.7 million. the company Meanwhile, net debt fell by ~19% to ~$208 million in the six-month ended 30 June 2021. While on the assets side, cash at the end of FY21 was reported at ~$57.33 million versus ~$189.15 million at the end of FY20.

Technical Analysis: On the daily chart, UWL has witnessed significant upward movement from the start of the year 2021 as prices made all-time high levels, but after making a new 52-week high at $4.39 in August 2021, the price started to move below 21-day simple moving average (SMA) at $4.105 and got stuck in the middle of the 21-period SMA and 50-period SMA that further indicates indecision in the market. The RSI (14-period) is trading at ~48.158 level is moving in a mid-range territory. it will be prudent to say that stock can witness a downward trend if it doesn’t give a breakout from the resistance level placed at $4.10, hence keeping UWL to a testing phase.

After considering the company’s financial performance for the FY21, support and resistance levels, and the RSI level, investing in this stock at such elevated prices reduces the margin of safety, hence it is suggested to ‘Watch’ and re-evaluate the stock near the support levels. The stock was analyzed as per the closing price of $3.95 per share, down by ~2.228%, as of 20^th September 2021.

Daily Technical Chart – UWL

Source: REFINITIV

L1 Long Short Fund Limited (ASX: LSF)

Incorporated in 2017, LSF is an investment company whose objective to provide positive returns to the investors while maintaining their capital over the long-term. The fund comprises of Long and Short Positions with exposure to Australia and New Zealand markets. As of September 20^th, 2021, Market capitalization stood at $1.57 billion, at a stock price of $2.57 per share.

Financial & Operational Updates – As per the announcement on 20^th September 2021, Net Tangible Assets backing after tax came at $2.75 per share as of 15^th September 2021 Vs $2.73 per share as of 31^st August 2021. As per the monthly report published on 7^th September 2021, LSF posted monthly returns of 5.1% in its long-short portfolio, beating the index returns of 2.5%. Number of total international positions in its portfolio decreased from 33 in July to 30 in August 2021. Its portfolio has provided a return of ~71% (net of fees) over the last 12 months vis-à-vis to a return of ~28.1% by the S&P ASX 200 Index.

Technical Analysis:  Technical Analysis: LSF's prices are trading in a long-term ascending channel pattern formation and currently getting support from the lower band of the pattern. On the weekly chart, the momentum indicator RSI (14-period) is trading in positive territory at ~57.00 levels. The prices are sustaining above 21-period SMA that acts as the support level for the stock. Now an immediate support level for the stock appears at $2.39 while resistance is at $2.75 level.

After looking at its annual and monthly returns vis-à-vis ASX200, the fund seems to be beating its benchmark. While on the technical front, considering the support & resistance and the price hovering near 52-week high, a ‘Watch’ stance is suggested on this stock. The stock was analysed as per the closing price of $2.570, down by ~1.154%, on 20th September 2021.

Daily Technical Chart – LSF

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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