Elixinol Wellness Limited (ASX: EXL)

EXL is engaged in the manufacturing and distribution of industrial hemp-based nutraceutical, dietary supplements, and skincare products in the America, Europe, and Australia. It distributes hemp-derived cannabidiol products under the Elixinol brand. The company was incorporated in 2017 and is based in Sydney, Australia, with a current market capitalization is $36.23 million, and a current price of $0.110 per share.

Financial & Operational Highlights – On 17^th August 2021, the company released its 1HFY21 results stating the significant growth in EBITDA of 53% compared to 1HFY20, which is contrary to the declining group revenue by 39% to $4.8 million on the prior half-year period ending on 30^th June 2020 at $7.9 million.

As per the filings on 29^th June 2021, the company and the shareholders of the Cannacare Health GMBH mutually agreed to cancel the proposed acquisition by terminating the Share Purchase Agreement announced on 15^th March 2021, this helped in the committed cash release of $5.5 million. To further carry out the expansion plans and maintaining the day-to-day operation the cash balances stood at $19 million in its books. Across various geographies, the USA markets performed well by clocking an increase of 59% in EBITDA over 1HFY20 whereas the revenues from UK and Europe plunged by 70% to $0.3 million in 1HFY21 compared to 1H FY20.

Technical Analysis- The stock showed a substantial downtrend, forming lower highs and lower lows with few spikes and printing the recent lows of $0.10 and currently trading at those levels only. The relative strength index is at 40.788 which is drifting towards an oversold range, indicates that the carnage is not yet done with the stock prices, and bears are still in control. The 21 days simple moving average is hovering above the stock price at $0.119, which implies the further bearish trend continuation from current levels. For the prices to find stable grounds, the support of $0.10 should be well respected and held firmly, since it is at the multi-year low and a breach of this level, could further bring pain in the stock price. The stock prices tanked lately and might see profit booking, hence the resistance can be plotted at lower levels of $0.14.

Due to the declining operating revenues, declining cash balance and declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.11, down by ~4.348%, as of 25^th August 2021.

Daily Technical Chart – EXL

Source: REFINITIV

BlueBet Holdings Limited - (ASX: BBT)

BBT  provides online wagering services to customers in racing and sporting events in Australia. It offers wagering products on racing and a range of other sports through the internet using a computer, mobile phone, and other connecting devices. The company was incorporated in 2015 and is based in Sydney, Australia, with a current market capitalization is $530.29 million, and a current price of $2.86 per share.

Financial & Operational Highlights – As per the exchange announcement shared on 10^th August 2021, the company shared the progress made on the betting licence in Arizona under the partnership between BlueBet’s wholly-owned subsidiary, ‘BlueBet Arizona LLC’ and Colorado River Indian Tribes (CRIT) and BlueWater Resort & Casino to access the online betting market in Arizona.

On 30^th July 2021 company released its activities report for the quarter ended 30^th June 2021, stating the growth in active customers to 32,472 in FY21  by 45.7% YoY. For the Q4FY21 ended on 30^th June 2021, the turnover was increased by 39.8% YoY, and the net win increased by 20.9% YoY to 10.1 million. The unaudited net revenue for FY21 is estimated to be $32 million which is in line with the previous forecast of $31.4 million. To carry out the expansion plans and maintaining the operation smoothly, the company maintained a strong cash balance of $56.1 million as of 30^th June 2021.

Technical Analysis- The stock showed a gradual uptrend and it was recently listed, hence the data is not enough to conduct the detailed technical analysis to come up with concrete outcomes.

With improved revenues, strong cash balance, lack of previous financial results and minimal stock price data to guage the technical analysis trend, we give the stock the rating of ‘Avoid’ at the closing price of $2.86, up by 7.924% as of 25^th August 2021.

Daily Technical Chart – BBT

Source: REFINITIV

Abacus Property Group (ASX: ABP)

ABP is a diversified Australian REIT with an investment portfolio concentrated in the Office and Self-Storage sectors. It invests capital in real estate opportunities to deliver superior long term returns and maximise security holder value. The company is an asset-backed, annuity-style business model where capital is directed towards assets that provide the potential for enhanced income growth and ultimately create value. The market capitalization stood at $2.79 billion at $3.38 per share.

Financial & Operational Update – On 18^th August 2021, the company announced its result for the full year ending on 30^th June 2021, stating the magnificent uptick of 336% YoY statutory profit of $369.40 million. On the operational efficiency, the Funds from Operations were up by 9.5% YoY to $136.40 million in FY21. Meanwhile, the full-year distribution per security was down by 5.4% to 17.5 cents as compared to the prior corresponding period. Since the company is a strong asset-backed entity, hence the Net Tangible Assets per stapled security is keenly observed, which was up by another 3.3% to $3.43 in FY21 from $3.32 in FY20. Out of its various acquisitions, the notable was the under the Sydney Self Storage- a portfolio of five assets located in the premium inner Sydney Significant Urban Area for the total consideration of $160 million.

Technical Analysis : The stock showed an overall uptrend forming higher highs and higher lows, with few dips in between and printed the recent highs of $3.47. The relative strength index is at 63.314, which is heading towards an overbought zone. The 21 days simple moving average is hovering close to the stock price and placed below at $3.260, giving some more bullish signal to the stock price. The stock price is inching upward towards the multi-year highs; hence the support levels are elevated at $3.10. For the prices to further continue the uptrend, a resistance of $3.65 needs to be taken off with strong volumes.

Increasing revenues, improving profitability and increased dividend pay-out, gives the strong rationale towards investing along with the acquisitions made in FY21.

However, considering the elevated stock prices heading towards the multi-year high, it seems prudent to wait for a better entry level and comfortable valuations, hence, we suggest ‘Watch’ stance as at the closing price of $3.38, down by ~1.17%, as of 25^th August 2021.

Daily Technical Chart – ABP

Source: REFINITIV

Nuix Limited (ASX: NXL)

NXL is an Australia based company providing investigative analytics and intelligence software solutions in Australia and internationally. The company offers Nuix Workstation, a solution for processing file formats and source types into meaningful information by capturing the content, metadata, and context of each item. The company also provides Nuix Adaptive Security, a solution that monitors, detects, and responds to threats of enterprises. The company was incorporated in 2000 and is based in Sydney, Australia. The market capitalization stood at $859.92 million at $2.88 per share.

Financial & Operational Updates – As per the exchange update on 10^th August 2021, the company stated that it has not received any formal notification of an investigation from ASIC and the company is confident that it had adhered to all the accounting and disclosure obligations.

On 15^th June 2021, the Chief Executive Officer, Rod Vawdrey, has shared his intentions to retire from the current services he is undertaking.  The group was included in the S&P/ASX Indices on 12^th March 2021, which will enable the investors and various funds to track and invest in the stock as per the stated mandate.

On 26^th February 2021, the company released its half-year results ended on 31^st December 2020, stating the successful listing on the ASX on 4^th December 2020, and the increase of 17% in terms of business terms compared to 1H FY20, including 49 addition of new customer and rise in dollar value of SaaS deals. The revenues were down by 4% YoY to $85.3 million and 44% of FY21 guidance.. The net loss after tax stood at $16.6 million or $0.06 on an EPS basis.

Technical Analysis- The stock showed a gradual downtrend with few spikes, which eventually sold off and entered the low volatile trading zone. The relative strength index is at 63.461, which is crawling towards an overbought levels, indicating some more upside remaining from the current levels and the stock could be prone to severe correction the closer it reached an overbought territory. The 21 days simple moving average is hovering below the stock price at $2.601, which implies the uptrend continuation from current levels. Since the prices are in a very narrow range, hence the support is placed at $2.42 and resistance at $3.20. Breaking either side of the range will give a clear picture of the trend formation. 

Due to declining operating revenues, accompanied by accumulating losses and 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 $2.88, up by 6.273%, as of 25^th August 2021.

Daily Technical Chart – NXL

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.