Absolute Equity Performance Fund Limited- (ASX: AEG)

AEG is an Australia-based investment company, providing investors with the opportunity to invest in a diversified portfolio of Australian listed equities, to achieve positive returns, through an equity market neutral style of investing. The Company’s objective is to deliver absolute returns through capital growth and income by minimizing the risks associated with the overall market performance and correlations, beating the benchmark indices. Bennelong Long Short Equity Management Pty Limited is the Company's investment manager. The current market capitalization is $103.14 million, and a current price of $1.12 per share.

Financial & Operational Updates – on 30^th August 2021, the company announced its financial year results ended on 30 June 2021, stating the significant decline in the revenues for FY21 by 69.92% YoY to $14.62 million. The net profit after tax declined by 93.95% YoY to $1.44 million in FY21. For the shareholders, the company failed to impress the shareholders as the dividend declared also declined to 2.6 cents in FY21. The cash and cash equivalents declined slightly to $102.10 million in FY21 from the balances of $118.09 million in FY20. On the operational front the company’s portfolio of investments, able to deliver a modest return of 0.7% for the 12 months ended 30^th June 2021.

Technical Analysis: The relative strength index is at 49.91, which is in the middle zone, 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 below $1.126, implying directionless price movement from current levels, indicating some more bullish signal to the stock price. Since the stock is volatile, hence the support is placed at a distant level from the current prices to give enough room for the price to revolve around $1.0 and similarly the resistance is placed at $1.25 levels.

Declining revenues and profits, along with the volatile stock prices refrain from investors getting invested during the dismal financials. Hence, we suggest adopting a wait and watch stance unless the financials improve for the company, so we give an ‘Avoid’ rating to the stock at the closing price of $1.12, as of 2^nd September 2021.

Daily Technical Chart – AEG

Source: REFINITIV

Dubber Corporation Limited (ASX: DUB)

DUB operates a unified call recording platform in North America, Europe, and the Asia-Pacific. Its product offerings include the Dubber platform, a secure and scalable call recording solution; and Dubber AI, which transcribes content to facilitating keyword search, as well as gives sentiment ratings based on the language used during the call. Further, it also provides an OpenAPI solution that provides an intelligent call analytics service, which monitors statistics, such as call duration, wait time, talk time, etc and allows users to record meetings from their phone and store them securely in the cloud, as well as compliant features and services to service providers. The company was incorporated in 1999 and is based in Melbourne, Australia. The current market capitalization is $1.12 billion, and the current price is $3.88 per share.

Financial & Operational Highlights – On 31^st August 2021, the company released its preliminary final report, stating the tremendous increase in revenues from ordinary activities by 97% YoY to $23.34 million in FY21. The losses piled up to $30.68 million in FY21, up 70% YoY..  As per the exchange filing on 27^th July 2021, the company successfully raised $110 million through the Institutional Placement for the growth and expansionary plans including organic and inorganic ways.

Further, the revenues were decreased by 12% QoQ to $7.4 million in 4Q FY21. On the operational front, the subscriber number increased to 420,000+ marks, related to its standard offerings. The cash balance at the bank stood at $32.04 million for the period ending on 30^th June 2021.

Technical Analysis- The stock gave a breakout from the lows of $0.38 and continued in its uptrend rally till it printed the recent highs of $4.04 and hovering those levels. The relative strength index is at 66.235 which is heading towards the overbought zone and 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 $3.643, implying further upside for the stock. For the prices to sustain the higher levels, the support is placed at $3.20. Since the prices are at life high, the resistance is not feasible to be plotted on the charts.

Though the revenues have increased, the losses are massive, and the stock prices are at a lifetime high, which doesn’t give the safety margin for the investor to invest.  Taking the above factors into considerations, we give the stock the rating of ‘Avoid’ at the closing price of $3.88, up by 0.258%, as of 2^nd September 2021.

Daily Technical Chart – DUB

Source: REFINITIV

Alkane Resources Limited - (ASX: ALK)

ALK is an Australian based multi-commodity exploration and development entity, exploring gold, copper, zinc, titanium, nickel, cobalt, and rare earth elements. The key projects are the Tomingley Gold project that consists of four gold deposits; and the Northern Molong Porphyry Project, located in the Central West of New South Wales. Its exploration projects comprise Boda and Kaiser, Cudal, Peak Hill, Wellington, Elsienora, Rockley, and other projects. The company was incorporated in 1969 and is based in West Perth, Australia. The current market capitalization is $583.48 million, and the current price is $0.955 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 gold revenues by 76.0% to $127.8 million for FY21 as compared to FY20. The profit increased by 152% to $33.57 million. The cash and cash equivalents have declined to $19 million in FY21 from close to $48 million in FY20.

On the operational front, the company reported on 16^th August 2021, the updates on its Boda Prospect in Central New South Wales revealed positive outcomes along with its Northern Molong Porphyry project for the discovery of gold mineralization in that area.

Technical Analysis- The stock gave a breakout around $0.185 and showed a gradual uptrend with wide dips giving the extra volatility edge to the stock price. The relative strength index is at 39.112, 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 and placed above at $1.007, which implies a more bearish trend to the prices from current levels. Since the prices are declining the support is a very crucial level around $0.875, if held, can prevent the prices from spilling down further and the resistance is at $1.185. Breaking either side of the range will give a clear picture of the trend formation.

Though the financials have improved, but the extremely volatile nature of the stock and the indicators pointing further downside, we give the stock the rating of ‘Avoid’ at the closing price of $0.955, down by ~2.55%, as of 2^nd September 2021.

Daily Technical Chart – ALK

Source: REFINITIV

Alterity Therapeutics Limited (ASX: ATH)

ATH is engaged in the research and development of therapeutic drugs for the treatment of Parkinsonian’s disease and other neurodegenerative diseases in Australia. The company’s lead drug candidate is ATH434 that has completed a Phase I clinical trial for the treatment of Parkinson’s disease. It is also developing PBT2 for use as an antimicrobial agent. The company was incorporated in 1997 and is based in Melbourne, Australia. The market capitalization stood at $77.01 million at $0.033 per share.

Financial & Operational Update – On 4^th August 2021, the company announced it was awarded the US Patent to expand its portfolio of Compounds for Neurodegenerative Diseases including Alzheimer’s and Parkinson’s. as per its quarterly business activity updates, the company failed to receive any cash receipts from its customers for the past 12 months ending on 30^th June 2021.  The cash outflows from the operations for FY21 increased to $17.50 million from $9.43 million in FY20. Hence, cash balance dropped to $28.12 million (vs. $32.76 million as of March 31, 2021). It is worth to mention the losses have mounted to $15.31 million in FY21 as against loss of $13.46 million in PcP.

Technical Analysis- The stock is in a very low volatile trading zone and discounting all the developments happening related to the stock price, showing a little side of the movement. The relative strength index is at 51.087, which is in the middle range of the zone, implying a lack of clear trend formation or continuation from current levels. The 21 days simple moving average is placed very close to the stock price at $0.033, implying the directionless movement from the prevailing levels. Since the prices are in a low volatile, hence the support is placed at $0.030 and resistance at $0.0385. Breaking either side of the range will give a clear picture of the trend formation. 

Due to missing cash receipts from its customers, accumulating losses, 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 $0.033, up by ~3.13%, as of 2^nd September 2021.

Daily Technical Chart – ATH

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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