BOD Australia Limited (ASX: BDA)

BDA operates as cannabidiol and medical cannabis healthcare company in Australia, the United Kingdom, the European Union, and the United States. The company operates through three segments: Medical, Over The Counter (OTC) Cannabidiol/Hemp, and OTC Herbals. It engages in the development and manufacture of cannabidiol and hemp products for consumers; and the development, manufacture, and distribution of therapeutics medicinal cannabis products for medical markets. The company was incorporated in 2014 and is based in Double Bay, Australia, with a current market capitalization is $33.86 million, and a current price of $0.30 per share.

Financial & Operational Updates – As per the exchange update on 17^th June 2021, the company stated it further expanded its operations in the UK via collaborating with two online retailers post-launch of new CBD based products sold under the CBII brand. Off late the company announced its financial year results ending on June 2021, stating the increase in medical cannabis product units sold for FY21 by 212% to 12k from 3k in FY20.  At micro aspect, the company locked an increase of 17% in  4Q June 2021 of 4,441 medical cannabis products units sold as compared with 3,805 in 3Q March 2021.  For FY21, BDA clocked an increase in revenue by 25% to $7.52 million as compared to $6 million in FY20. The losses declined by 12% to $4.2 million in FY21 as compared to the FY20 losses.

Technical Analysis: The stock entered the downside after reaching the recent highs of $0.74, forming the lower highs and lower lows. The relative strength index is at 45.845, which is in the middle zone of the heading towards an oversold zone, implying more correction from current levels. The 21 days simple moving average is hovering close to the stock price and placed above at $0.308, giving some more bearish signal to the stock price. The stock price is crawling towards the multi-year lows; hence the support levels are placed lower at $0.023. For the prices to further resume the uptrend, the resistance of $0.039 needs to be taken off with strong volumes.

Though revenues showed strong growth, BDA continue to operate in losses. And the continuous sell-off across the stock prices pulled the investor's confidence lower. Considering the above factors into considerations, we give the stock the rating of ‘Avoid’ at the closing price of $0.300, down by ~6.251% as of 1^st September 2021.

Daily Technical Chart – BDA

Source: REFINITIV

Oventus Medical Limited (ASX: OVN)

OVN is a medical device company, engaged in the development and commercialization of oral appliances for the treatment of obstructive sleep apnoea (OSA) and snoring in Australia, Canada, and the United States. The company offers O2Vent Optima, a customized 3D-printed nylon oral appliance for OSA patients; and ExVent, an alternative for CPAP-intolerant individuals. It also develops O2Vent. The company was incorporated in 2015 and is based in Indooroopilly, Australia. The current market capitalization is $24.17 million, and the current price is $0.105 per share.

Financial & Operational Highlights – On 30^th July 2021, the company released its quarterly business review for the fourth quarter ended on 30^th June 2021, stating the cost of the customer acquisitions dipped by 34% post introduction of the efficient cost optimization models and framework that were introduced in the virtual channel. On the operational front, the Telehealth bookings continued to march towards the Northward direction as a leading indicator for its device sales with 507 consultations scheduled in 4Q FY21, up  635% YoY and further noted 25% increases on QoQ basis. On the financial front, the company reported the revenue which was comprised of devices sales, consumables, and service fee of $223k up 214% YoY ($71k in 4Q FY20)while slipped by 30% QoQ ($317k in 3Q FY21). On a large picture, the growth is tremendous, up by 260% in FY21 vs FY20.

Further taking the micro picture of the financials, the cash receipts of $321k from customers were up by 177% YoY . The cash balance stood at $9.16 million for the quarter ending on 30^th June 2021.  

Technical Analysis- The stock was in a volatile trading zone earlier and portrayed a declining mode after touching the recent highs of $0.91. The relative strength index is at 58.188 which is in the middle zone, an indication of not a linear movement in the prices from current levels. The 21 days simple moving average is placed below the stock price of $0.098, implying further upside left with the stock price. For the prices to find stable grounds, the support of $0.085 should be well respected and held firmly, since the prices are declining and heading towards the multi-year lows and a breach of this level, could further bring pain to the stock price. The stock prices tanked lately and might see profit booking; hence the resistance can be plotted at lower levels of $0.125.

Though the financials have improved, but the stock prices are reflecting a contrary picture, hammering the confidence of the investors against the price action. Taking the above factors into considerations, we give the stock the rating of ‘Avoid’ at the closing price of $0.105, up by 4.999%,  as of 1^st September 2021.

Daily Technical Chart – OVN

Source: REFINITIV

Rent.com.au Limited - (ASX: RNT)

RNT operates real estate websites with focus on the rental property market in Australia. It accepts rental property listings from agents, landlords, renters, and advertisers. The company was incorporated in 2007 and is based in Burswood, Australia. The current market capitalization is $39.02 million, and the current price is $0.10 per share.

Financial & Operational Highlights – on 27^th August 2021 the company released its financial year-end results for the period ended 30^th June 2021, stated the tremendous growth in revenue from ordinary activities by 26.20% to $3.09 million for FY21 as compared to $2.45 million in FY20. The net losses decreased by 23.20% to $1.27 million in FY21 as compared to $1.66 million in FY20. The Net tangible assets per share increased more than ten-fold to 0.62 cents per share as of 30^th June 2021 as compared to 0.06 cents per share as of 30^th June 2020.

At micro-level analysis: the revenues grew by 31% YoY to $810k in Q4FY21 and Core rent.com.au reported positive EBITDA of $59k straight 4^th consecutive positive quarter. The cash received from its customers increased to $857k for the quarter ending on 30^th June 2021.

Technical Analysis- The stock gave a breakout around $0.045 and spiked to the highs of $0.395 and gave up all the gains and entered a downtrend forming lower lows and lower highs. The relative strength index is at 40.687, which is crawling towards an oversold level, indicating some more downside remaining from the current levels and the stock could be prone to short pull back for a short time frame. The 21 days simple moving average is hovering closer to the stock price at $0.102, which implies a lack of trend formation or continuation from current levels. Since the prices are declining the support is a very crucial level around $0.085, if held, can prevent the prices from spilling down further and the resistance is at $0.135. Breaking either side of the range will give a clear picture of the trend formation.

Though the cash receipts from customers have improved, but the losses persist, and the continuous sell-off across the stock prices pulled the investor's confidence lower. Considering the above factors into considerations, we give the stock the rating of ‘Avoid’ at the closing price of $0.10, up by 2.04%, as of 1^st September 2021.

Daily Technical Chart – RNT

Source: REFINITIV

Los Cerros Limited (ASX: LCL)

LCL is engaged in mineral exploration in South America. The company explores gold, copper, and other base metals and key projects are Quinchia gold project located in central west Colombia; and Andes gold project located on the Western Cordillera of the Andes Mountains. The company was incorporated in 2020 and is based in West Perth, Australia. The market capitalization stood at $90.72 million at $0.140 per share.

Financial & Operational Update – On 9^th August 2021, the company announced its assay results on its Tesorito South property stating a high probability of gold mineralization in that surface area. As per the exchange release on 16^th July 2021, the company raised $20 million through private placement to the professional and sophisticated investors and the funds will be utilized to carry out various exploration activities across its Los Cerros Quinchia and Andes Gold Projects, Colombia.

On 27^th July 2021, the company released its quarterly revenues for the period ending on 30^th June 2021, stating the updates on its drilling activities commenced at its Celibal Porphyry where the probability of the gold mineralization is evident. On the financial front, the company did not receive any cash receipts from customers for the past two quarters ending on 30^th June 2021. Because of a lack of cash receipts and growing expenses, the cash balances declined to $5.08 million in June 2021 as compared to $6.12 million on 31^st March 2021.

Technical Analysis- The stock showed a gradual uptrend with few spikes, which eventually entering the low volatile trading zone. The relative strength index is at 39.900, which is crawling towards an oversold level, indicating some more downside remaining from the current levels and the stock could be prone to severe pullback, lasting short term, the closer it reaches overbought territory. The 21 days simple moving average is hovering above the stock price at $0.148, which implies the bearish trend continuation from current levels. Since the prices are in a low volatile, hence the support is placed at $0.115 and resistance at $0.185. Breaking either side of the range will give a clear picture of the trend formation. 

Due to missing cash receipts from its customers, accompanied by declining stock prices, the stock entered the low volatile zone, which is prone to a sudden breakout, hence we give the stock the rating of ‘Avoid’ at the closing price of $0.140, down by ~3.449%, as of 1^st September 2021.

Daily Technical Chart – LCL

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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