Macquarie Group Limited (ASX: MQG)

MQG is an Australia based company providing diversified financial services across various geographies such as Australia, the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Macquarie Asset Management (MAM), Banking and Financial Services (BFS), Commodities and Global Markets (CGM), and Macquarie Capital. The company was incorporated in 1969 and headquartered in Sydne, Australia. The market capitalization stood at $57.54 billion at the current $155.61 per share price.

Financial & Operational Highlights - On 29^th July 2021, the company provided an update for its 1Q FY22 performance in which its Asset Under Management grew 23% to $693.2 billion for the quarter ending 30^th June 2021. This was as a result of the acquisition of Waddell & Reed. The board updated its annual dividend payout in the range of 50%- 70%. For 2HFY21, MQG posted a 31.45% increase in Net operating income to reach $7.26 billion as compared to $5.52 million in pcp. Profit grew more than doubled to $2.03 billion from $0.99 billion in 1H FY21. For the full-year FY21, net profit surged 10% to $3.01 billion over the last year. Shareholders were rewarded with a dividend of $4.70 in FY21, which is 9% higher than FY20.

Technical Analysis- The stock showed an uptrend and reached the lifetime highs of $162.06 and hovering at near those levels currently. The Relative Strength Index is showing a reading of 45.995, which is at the middle zone of the range, lacking the trend confirmation from the current levels. The 21 Day Simple Moving Average is currently hovering close to the stock price at $156.040, indicating further trend continuation in either direction from current levels. Keeping the volatility of the stock into consideration, the support is placed at $148.37 and the resistance at $162.06 levels. Breaking either side of the range will give a clear picture of the trend formation.

Lifetime high stock prices give the expensive at current levels. We suggest investors to 'Avoid’ the stock at the closing price of $155.61 per share, down by ~0.29%, as of 4^th August 2021.

Daily Technical Chart – MQG

Source: REFINITIV

Metalicity Limited (ASX: MCT)

MCT is engaged in the exploration and development of gold and zine deposits across Australia and Canada. The company’s flagship project is the Kookynie Gold project located in the Eastern Goldfields of Western Australia. The company was incorporated in 1999 and headquartered in Perth, Australia. The current market capitalization stood at $21.43 million at the current $0.011 per share price.

Financial & Operational Highlights - On 30^th July 2021, the company released its quarterly activities report, stating its 51% controlling interest in both the Kookynie & Yundamindra Gold Projects, for unearthing the strong probability of the presence of gold mineralization from those properties. On 22^nd June 2021, the company successfully raised $3 million through the placement option which was oversubscribed by new and existing professional and sophisticated investors. On the financial front, the company did not receive any cash receipts for the past year ending on 30^th June 2021. The cash outflows from operations decreased to $0.26 million in 4Q FY21 as compared to the outflow of $0.49 million in 3Q FY21 ending on 31^st March 2021. Further, the cash balance was increased to $4.04 million as of 30^th June 2020 as compared to $1.80 million in the preceding quarter.

Technical Analysis- The stock showed a strong uptrend to print a near term high of $0.045 and since then the prices corrected and continued to move towards the South eventually forming lower highs and lower lows. The relative strength index at 48.295, which is in the middle range of the zone, points for directionless movement, which can eventually lead to a breakout on either side. The 21 days simple moving average is hovering close to the stock price at $0.012, indicating no strong trend formation from current levels. For the prices to prohibit from diving into the bear territory, the support of $0.022 should be held firmly. Similarly, for the prices to regain the uptrend, a resistance of $0.034 needs to be taken off with strong volumes.

Lack of operating revenues, volatile commodity prices, and downward stock prices give the level of discomfort to the investors to get into the stock, hence we suggest investors to ‘Avoid’ the stock at the closing price of $0.011 per share, up by 10%, as of 4^th August 2021.

Daily Technical Chart – MCT

Source: REFINITIV

MMJ Group Holdings Limited (ASX: MMJ)

MMJ is an Australia-based company engaged in cannabis investment globally. It owns a portfolio of cannabis sector investments. The company was formerly known as MMJ PhytoTech Limited. The company was incorporated in 2014 and headquartered in Sydney, Australia, with a current market capitalization of $18.62 million at the current $0.080 per share price.

Financial & Operational Highlights – As per the company’s recent investment portfolio update, the Net Tangible Asset Value per share before taxes for the period ending on 30^th June 2021 stood at $0.1885. It had a total portfolio of $44 million with a negative annualized investment returns of 13% since its inception. For the period ending 30^th June 2021, a few of the key investments held were  Harvest One Cannabis Inc., Southem Cannabis Holdings, Embark Health and the losses from these material investments were $4.01 million whereas the book value was reported at $35.06 million. MMJ posted loss after tax of $2.19 million for the 1H FY21 ending on 31^st December 2020.

Technical Analysis- The stock is in a continuous selling spree, forming lower highs and lower lows and approaching the near term lows. The Relative Strength Index is currently showing a reading of 46.66, which is in the middle range of the zone, indicative of no strong trend formation from current levels. The 21 Days Simple Move Average is placed above the stock price at $0.082, implying a more bearish trend continuation for the stock. For the trend to remain intact, the prices should not dip below the support of $0.072, and the resistance is placed at $0.095.

Accumulating losses with declining stock prices makes the stock fall in the category of ‘Avoid’rating at the closing price of $0.080, down by ~1.23%, as of 4^th August 2021.

Daily Technical Chart – MMJ

Source: REFINITIV

eSense-Lab Limited - (ASX: ESE)

ESE is an Israel-based lifesciences company engaagged in providing evidence-based terpene product development for medicinal and wellness uses. The company is based in Twin Waters, Australia, having a market capitalization is $8.97 million, at the current price of $0.018 per share.

Financial & Operational Highlights - As per the quarterly activities report, released on 30^th July 2021, the joint research with the Israeli Ministry of Health Central Virology Lab shared development on HCov-OC43, TRP-ENV & TRP-BIO, intending to develop a superior, organic, dominant sanitiser product that provides added protection against bacteria and viruses, while reducing its ethanol content. Further, the company entered into Loan Agreement with various professional and sophisticated investors to raise A$349,000 to meet its operating expenses and working capital requirements. The company did not record any cash receipts from its customer for the quarter ending 30^th June 2021 and posted the cash outflows from operating activities of US$0.20 million for the same period. The cash balance as of 30^th June 21, was increased to US$141k as compared to the previous quarter ending on 31^st March 21 of US$76k. It's worth mentioning that the company made all formal arrangements and submitted the proposal to delist its stock from ASX. The company was finding it tough to raise funds even as a listed entity, which is becoming a hindrance in carrying out its working capital and expansionary plans, hence it proposed to delist from the exchange. Further, it announced, that the delisting won't impact negatively to the minority shareholders interest, whereas the other common shareholders do not have any benefit in the liquidity of its shares. On the timeliness, ESE proposed to the delist the stock effective August 10, 2021. 

Technical Analysis- The stock showed a continuous downtrend with a spike as odd intervals, only to cool off eventually by witnessing sell-off. The stock is in a congestion zone which at a later stage can breakout in either direction. The Relative Strength Index is currently showing he reading of 50.122, which is in the middle range of the zone, implying no clear trend formation at these levels. Another trend confirmation indicator, the 21 Days Simple Moving Average is placed close to the stock prices at $0.018,  lacking any trend bias from current levels. The support for the current trend is at $0.0145 and the resistance is at $0.024. Breaking either side of the range will give a clear picture of the trend formation.

Lack of substantial operating revenues, proposal for delisting of shares and stock prices heading towards the south, makes the stock less attractive from an investment perspective. Hence, we suggest investors to 'Avoid’ the stock at the closing price of $0.018 per share, as of 4^th August 2021.

Daily Technical Chart – ESE

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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