Mosaic Brands Limited (ASX: MOZ)

Incorporated in 1987, MOZ is a fashion retailing company involved in women’s apparel and accessories in Australian and New Zealand. Its market capitalization stood at AUD 60.41 million as of 17^th November 2021.

Financial and Operational Updates: As per the Quarterly Update on 29^th October 2021, it recorded ~21% increase in online sales revenue (PcP) in 1QFY22 and cash outflow from operating activities lead to ~14 million. Debt due at the end of September was ~AUD 31.5 million. In the same month it had completed capital raising of AUD 32 million though issue of convertible notes. Further, the company is working on turning around its acquired Ezibuy which posted 17% topline growth. As per the Annual Report released on 31^st August 2021, its revenue was reported as ~AUD 0.67 million in FY21 versus ~AUD 0.71 million in FY20. MOZ converted its net losses after tax of ~AUD 170.48 million in FY20 to the net profitability of ~AUD 2.72 million for FY21. It reduced its finance cost and recorded ~AUD 48 million as EBITDA in FY21 with 4QFY21 being the second highest in six years. The cash balance was reported as ~AUD 57.83 million at the end of 30^th June 2021 versus ~AUD 86.92 million at the end of 30^th June 2020.

Technical Analysis: After making a recent low of AUD 0.38 in September 2021, MOZ's prices reversed from the lower levels and currently trading above 21-period SMA, indicating an upside direction. The RSI (14-period) is also recovered from the lower end and currently trading above the mid-point at ~55.823, further supporting a positive bias. Immediate support levels are AUD 0.61 and AUD 0.55 while resistance levels are AUD 0.755 and AUD 0.810.

Considering the acquisition of EziBuy, financial performance for FY21 and its possible upside movement, it is prudent to suggest the investors with a high-risk appetite a ‘Speculative Buy’ stance along with incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the current market price of AUD 0.660 per share, as of 17th November 2021, 11:48 AM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high in view of the gap between the actual and expected synergy from the acquisition.

Weekly Technical Chart – MOZ

Source: REFINITIV

Marley Spoon AG (ASX: MMM)

MMM is a German-based food company offering a subscription-based weekly meal kit services covering Australia, United States and Europe (Austria, Belgium, Germany and the Netherlands). Its market capitalization stood at AUD 232.92 million as of 17^th November 2021.

Financial and Operational Updates: On 17^th November 2021, Perennial Value Management Limited increased its substantial shareholding from 6.15% to 7.74% and BlackRock Group raised to reach 6.55% of voting rights. As per the Quarterly Update on 28^th October 2021, it recorded ~14% increase in net revenue (PcP) in 3QFY21 with a 2-year CAGR of ~55% reaching at € 79.2 million. The Contribution Margin rose by ~1.5 pts to 28% (PcP) and full year (FY21) net revenue is expected to grow by ~26-28% as against previous guidance of ~30-35% owing to changing consumer behaviour. Its sales receipts for 3QFY21 were recorded as ~€80.69 million and had closed the quarter with a cash balance of ~€ 33.04 million at the end of 30^th September 2021 versus ~€ 21.76 million at the end of 30^th June 2021. As per the Half Yearly Report released on 31^st August 2021, net revenue increased by ~36% Y-o-Y and was reported as ~€ 158.04 million in 1HFY21 versus ~€ 116.15 million in 1HFY20. It had reduced its net losses after tax by ~69% Y-o-Y from ~€ 67.49 million in 1HFY20 to ~€ 21.11 million for 1HFY21.

Technical Analysis: MMM, stock prices are trading above the horizontal trend line support zone at AUD 0.81 on the daily chart and taking the support of the same. Moreover, the momentum oscillator RSI (14-period) is trading in an oversold zone at ~25.22 levels, which indicates the possibility of rebound in the stock. However, prices are trading below 21-period SMA and 50-period which may act as a crucial resistance level for the stock. An important support level for the stock, is placed at AUD 0.72 while the key resistance level is placed at AUD 0.967.

Considering the increase in revenue, improving contribution margin and its current RSI levels, it is prudent to suggest the investors with a high-risk appetite a ‘Speculative Buy’ stance along with incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the current market price of AUD 0.835 per share, as of 17th November 2021, 10:32 AM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high in view of the volatile consumer preferences and demand.

Daily Technical Chart – MMM

Source: REFINITIV

Winchester Energy Limited (ASX: WEL)

WEL was incorporated in 2014, it is an oil and gas exploration company with operations in USA and Australia. Its prospects include White Hat Ranch, Thomas Ranch, Thomas-US Energy, McLeod, McLeod-US Energy, Arledge, Arledge-US Energy, Bast and Whiteside in Nolan County, Texas. Its market capitalization stood at AUD 16.13 million as of 17th November 2021.

Financial and Operational Updates: As per the update on 14^th October 2021, a re-completion costing USD 0.10 million at White Hat 3902 is in cards. The production at White Hat 2106 has increased from 352 boepd to 375 boepd (October Average), without any pressure decline or significant water. As per the recent Quarterly Reports of 3QFY21 released on 28^th October 2021, its cash receipts from customers for 3QFY21 were reported as ~USD 359k. It reported an increase of ~58% Q-o-Q in production of oil, leading to average 206 barrels in September 2021 quarter and net revenue of USD 0.44 million. It had closed the quarter with a cash balance of ~USD 2.09 million at the end of 30^th September 2021 versus ~USD 2.33 million at the end of 30^th June 2021. As per the Half Yearly Report released on 10^th September 2021, revenue from operations were reported as ~USD 1.03 million in 1HFY21 versus ~USD 1.33 million in 1HFY20. It had converted its net profitability of ~USD 0.16 million in 1HFY20 to the net losses after tax to ~USD 0.65 million for 1HFY21.

Technical Analysis: On a weekly chart, WEL’s prices are struggling to surpass 21-period SMA and 50-period SMA and trading in a sideway pattern. The RSI is also trading in a mid-range at ~44.876 further indicating a directionless movement. The crucial support levels are AUD 0.015 and AUD 0.013 while immediate resistance levels are AUD 0.018 and AUD 0.019.

It is prudent to suggest the scrip as A ‘Watch’ stance after considering its sideways movement and Net Losses in H1FY21. The stock was analysed as per the closing price of AUD 0.016 per share, as of 17^th November 2021.

Weekly Technical Chart – WEL

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 Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Yellow colour line reflects the Trendline, which shows whether the direction of the scrip is upwards or downwards.

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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