Pharmaust Limited (ASX: PAA)

PAA is an Australia based clinical-stage company, targeting cancer therapeutics for humans and animals. The company is engaged in the development of drugs for the treatment of various cancers, and viral and neurological diseases. Its key product is Monepantel (MPL), a small molecule drug for the treatment of cancer. The company was incorporated in 2000 and is based in Bentley, Australia. The current market capitalization is $26.93 million, and the current price is $0.086 per share.

Financial & Operational Updates – as per the exchange announcement of 31^st August 2021, the company has paid its debt liability of ~$1.2 million, without any delays for a major laboratory expansion in Technology Park, Western Australia. Further, the company updated on 3^rd August 2021, through its subsidiaries, it has completed constructing its benchtop Oxidative Hydrothermal Dissolution (OHD) Flow Reactor to research and develop an innovative waste to fuels technology. Recently, the company announced its financial year results ended 30 June 2021, stating the slight decline in the revenues for FY21 by 11% YoY to $3.67 million. The net loss after tax was better off by 2% YoY to $1.34 million in FY21. For the 4Q FY21, the cash receipts from customers were recorded at $403k and the cash balance was $3.07 million.

Technical Analysis: The stock showed volatile moves from the breakout around $0.075 levels, before printing the highs of $0.275 and called off from there, entering into a narrow range-bound pattern since then. The relative strength index is at 44.80, which is in the middle zone, implying a lack of linear price movement from current levels. The 21 days simple moving average is hovering close to the stock price and placed above $0.088, indicating a more bearing trend left for the prices from these levels. Since the stock is less volatile, hence the support is placed near the current prices around $0.075 and similarly the resistance is placed at $0.094 levels.

Declining revenues and accumulating losses, along with the sinking stock prices in a narrow trading band, such factors are not pointing out the right grounds to invest at current levels. 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 $0.086, up by ~1.176%, as of 6^th September 2021.

Daily Technical Chart – PAA

Source: REFINITIV

SelfWealth Limited (ASX: SWF)

SWF operates as an online share trading service provider in Australia and the United States. It also provides online investor community portal services. The company was incorporated in 2011 and is based in Surrey Hills, Australia. The current market capitalization is $80.25 million, and the current price is $0.350 per share.

Financial & Operational Highlights – On 2^nd September 2021, the company announced the inclusion of Cath Whitaker to the Board from 6^th September 2021 as an Executive Director. On the operation front, the company attainted a total of 100,000 active trader milestone, becoming the fourth larger player in the online broking industry. Recently, the company announced its financial year results ended on 30 June 2021, stating the significant growth in revenues of 136% to $18.4 million in FY21 as compared to the $7.8 million in FY20. The cash flows saw a positive turnaround to $1.1 million in FY21 from the cash outflow of $147k in FY20 which were driven by strong revenue growth and cost optimization methods across all the segments. The gross margins have increased from 33.4% in FY20 to 41.4% in FY21, empowered by the lowered operating expenses by 41% on the revenue growth of 136%.

Technical Analysis- The stock entered a downtrend forming lower highs and lower lows and hovering at those levels currently. The relative strength index is at 50.677 which is revolving in the middle zone of the range, an indication of not a linear movement in the prices from current levels. The 21 days simple moving average is placed around the stock price of $0.34, implying no clear trend formation or the trend continuation from these levels. For the prices to prevent from drowning further, the support is placed at $0.265. the resistance is placed at $0.435, around which the selling pressure can be expected to keep the prices suppressed.

Though the revenues have increased, profits and cash flows have improved, but the stock prices have seen a massive decline. Hence we suggest the investors to adopt a ‘Watch and Watch’ stance. Investors should look for the industry to witness some green shoots for any reversal of the long-term trend while a slight short term pull back may be witnessed. The rating was made at the closing price of $0.350, up by ~2.941%, as of 6^th September 2021.

Daily Technical Chart – SWF

Source: REFINITIV

Bardoc Gold Limited (ASX: BDC)

BDC is engaged in the exploration and development of mineral properties in Australia. The company primarily explores for gold and manganese deposits. Its key project is the Bardoc Gold Project located in the Eastern Goldfields of Western Australia. The company was incorporated in 2007 and is based in North Fremantle, Australia. The current market capitalization is $116.26 million, and the current price is $0.066 per share.

Financial & Operational Highlights – The company released an update on 2^nd September 2021 regarding the cashflow optimization study stating the mining of cornerstone Aphrodite deposit will increase the production by 80,000 oz in the initial 5 years, the company see growing to 150,000 ozpa in next three years. As of 10^th August 2021, the company appointed GR Engineering Services (ASX: GNG) as the preferred tender for the engineering, procurement and construction contract for the processing facility and associated infrastructure at Bardoc Gold Project. Recently the company announced its Quarterly trading and business activities update for the 4Q FY21 ending on 30^th Jue 2021, stating no cash receipts for the past 12 months straight, ending on 30 June 2021. The cash balances for the 4Q FY21 was reported at $12.89 million.

Technical Analysis- The stock gave a breakout around $0.044 and showed a gradual uptrend with wide dips giving the extra volatility edge to the stock price and eventually turning downwards after showing the highs of $0.13. The relative strength index is at 48.679, which is between the overbought and oversold range, pointing at the directionless movement of the stock prices from current levels. The 21 days simple moving average is hovering closer to the stock price and placed in proximity at $0.067, which implies a lack of concrete rend formation or continuation at current levels. Since the prices are declining the support is a very crucial level around $0.057, if held, can prevent the prices from spilling down further and the resistance is at $0.075. Breaking either side of the range will give a clear picture of the trend formation.

Missing cash receipts from its customers, volatile commodity prices and declining stock prices, devoids the rationale of investing at these levels. Unless the financial improves and technical points some buying indication till then we give the stock the rating of ‘Avoid’ at the closing price of $0.066, down by ~1.493%, as of 6^th September 2021.

Daily Technical Chart – BDC

Source: REFINITIV

New Century Resources Limited (ASX: NCZ)

NCZ is into base metal development and production across Australia and the United States. The company explores for zinc, lead, and coking coal deposits. Its key projects are Century mine located in Queensland, Australia; and the Kodiak project located in Alabama. The company was incorporated in 2010 and is based in Melbourne, Australia. The market capitalization stood at $202.66 million at $0.170 per share.

Financial & Operational Update – On 2^nd September 2021, the company announced the update on the Silver King and Maiden Inferred Mineral Resources at Watson’s Lodo project, stating the positive outcome from those projects and seeking to carry forwards the next level of activities. Recently the company released the Quarterly activities for the period ending on 30 June 2021, stating the QoQ increase in zinc metal production with net sales receipts touching $97.3 million, up by 46% over the preceding quarter. There is a massive improvement in cash flow from its operations to $26 million in 4Q FY21 vs $3.2 million in 3Q FY21. To fund its operational activities and execute its expansion strategy the company increased its cash balances to $35.7 million for the period 4Q FY21 as compared to $21.18 million in 3Q FY21.

Technical Analysis- The stock was sold off massively and experienced an erosion of almost 90% in its value from its lifetime high of $1.625 levels to the current levels. The relative strength index is at 41.813, 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 above the stock price at $0.173, implying the more bearish trend remaining to the stock prices. Since the prices are in a low volatile, hence the support is placed at $0.13 and resistance at $0.245. Breaking either side of the range will give a clear picture of the trend formation. 

Though the revenues and cash balances have improved, but the prices fail to reflect any improving fundamentals, refraining from the fresh actions from the investors. Hence we give a rating of ‘Avoid’, till we see the prices coming above the resistance levels or technical indicators showing some changes in the trend. The recommendation was given at the closing price of $0.170, up by ~1.492%, as of 6^th September 2021.

Daily Technical Chart – NCZ

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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