Frontier Digital Ventures Limited (ASX: FDV)

FDV is a financial services firm, specializing in investing and developing online classifieds business in emerging markets. Further, it invests in the property and automotive verticals and general classifieds/marketplace websites. The company was incorporated in 2014 and Kuala Lumpur, Malaysia with an additional office in Melbourne, Australia. The market capitalization stood at $560.80 million at $1.63 per share.

Financial & Operational Update – on 15^th July 2021, the company announced that it has agreed to acquire a further 9.1% interest in Hoppler.com.ph (Hoppler), reaching majority ownership of 51.1%, wherein the revenues from Hoppler stood at $0.38 million in H1FY21. On 28^th July 21, the company released its Q2FY21 quarterly activity report, where for H1FY21, the revenue stood at $24.2 million on an FDV% share basis, up 148% YoY driven by organic and inorganic growth. From its previous acquisitions, the FDBV recorded half-year revenues for InfoCasas and Moteur on a 100% basis, increasing 111% and 149% on PCP basis. Excluding the recent acquisitions, the total EBITDA margin was +7% in H1FY21, countering the COVID-19 and forex risks lingering on the business. The cash balance for the company ending on 30^th June 2021 stood at $18.70 million, providing funding flexibility.

Technical Analysis- The stock showed a gradual uptrend with few dips in between, and printed the recent high of $2.040, only to experience a sharp sell-off from those levels. The relative strength index is at 66.308, which is heading towards the upper end of the zone, indicating some more strength remaining in the stock to drive it upwards. The 21 days simple moving average is hovering below the stock price at $1.510, indicating further uptrend potential with the stock from these levels.  For the prices to prohibit from diving into the bear territory, the support of $1.455 should be held firmly. Similarly, for the prices to regain the uptrend, a resistance of $1.855 needs to be taken off with strong volumes.   

An increase in expansion in terms of inorganic growth, decreasing cash balances, and rising stock prices, gives the discomfort for the investors. Hence we give the stock the rating of ‘Avoid’ at the closing price of $1.630, down by ~0.31%, as of 10^th August 2021.

Daily Technical Chart – FDV

Source: REFINITIV

Poseidon Nickel Limited (ASX: POS)

POS is engaged in the exploration, development, mining, and production of nickel and other mineral properties in Australia. It holds interests in the Mt Windarra, the Black Swan, and the Lake Johnston nickel projects located in Western Australia. The company was incorporated in 1993 and is headquartered in West Perth, Australia. The market capitalization stood at $294.98 million at $0.105 per share.

Financial & Operational Updates – On 9^th August 2021, the company announced the update on the drilling and assay of its Golden Swan property, which is identified with Nickel mineralization. On 2^nd August, the announcement was made to raise $22 million for the support of the operations at Black Swam, from new and existing institutional and retail investors.  On the financial front, the company did not receive any cash receipts from the customers in the past 12 months ending on 30^th June 2021. The cash balance was decreased for the period ending on 30^th June 2021 to $7.90 million from $15.43 million in Q3FY21.

Technical Analysis- The stock inched gradually and showed the recent high of $0.160 and colled off a bit. The prices are hovering near the high levels and poised to take a direction in the coming time. The relative strength index at 49.779, 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 above the stock price at $0.1098, indicating there is further downside possible with the option from current levels. since the prices have moved up, hence the support levels have also elevated at higher levels at  $0.095. once the prices move towards the North, to keep it sustaining the resistance of $0.125 levels need to be taken off when accompanied with more than average daily volumes.

Due to a lack of operating revenues, declining cash balances, and elevated stock prices, the investment at these levels seems to be expensive. Hence, we give the stock the rating of ‘Avoid’ at the closing price of $0.1050, as of 10^th August 2021.

Daily Technical Chart – POS

Source: REFINITIV

Uniti Group Limited (ASX: UWL)

UWL is an internet and telecommunications product and services company in Australia, operating through three segments: Consumer & Business Enablement, Wholesale & Infrastructure, and Specialty Services. The company was incorporated in 2012 and is based in Adelaide, Australia. The market capitalization stood at $2.56 billion at 3.83 per share.

Financial & Operational Highlights –   On 11^th June 2021, the company released an update stating that S&P Dow Jones Indices added the company to its S&P/ASX Indices, making it widely tracked and followed but the investor's community. On 23 February 2021, the company released its H1FY21 result ended 31 December 2020, where revenue stood at $55.19 million, up 150.3% YoY, while profit after tax stood at $3.91 million, down 23.6% YoY. The cash balance stood at $45.5 million with net debt of $116 million as of 31^st December 2020.

Technical Analysis- The stock showed a strong uptrend and printed the lifetime high of $3.85 and staying at these levels only. The relative strength index is at 76.83, which is heading towards the upper end of the zone, indicating some more strength left with the stock to drive it upwards. The 21 days simple moving average is hovering below the stock price at $3.480, which implies the further upside movement of the stock from current levels. For the prices to prohibit from diving into the bear territory, the support of $3.065 should be held firmly. Since, the stock is at the lifetime high, hence plotting the resistance on the charts is not viable.  

Rising revenues, improving operating efficiency, high debt levels, and life tie stock prices, gives the stock an expensive valuation. Hence we give an 'Avoid' rating on the stock at the closing price of $3.830, up by ~2.13%, as of 10^th August 2021.

Daily Technical Chart – UWL

Source: REFINITIV

Huon Aquaculture Group Limited - (ASX: HUO)

HUO together with its subsidiaries engages in the hatching, farming, processing, marketing, and selling of Atlantic salmon and ocean trout in Australia. It also exports its products. The company was incorporated in 1986 and is based in Dover, Australia, having a market capitalization is $428.50 million, at the current price of $3.890 per share.

Financial & Operational Highlights – on 25^th June 2021, the company announced the strategic review updates of this corporate transaction which were initiated on 26^th February 21, stating that the company witnessed a steady rise in demand from the domestic wholesale markets as foodservice business partners and outlets opened, with easing CVOID 10 lockdown restrictions. On the financial front, the company recorded an increase in revenues to $231.9 million for 1H FY21 as compared to the $182.2 million 1H FY20 and the net loss for the same period stated at $95.3 million.

Technical Analysis- The stock exhibits an extremely volatile nature, following the continuous downtrend forming lower highs and lower lows and witnessed a sudden breakout which took the stock from $2.792 to $3.92. The relative strength index is at 76.966, which is heading towards the upper end of the zone, indicating some more strength to the stock price. The 21 days simple moving average is hovering below the stock price at $2.913, which implies the further upside movement of the stock from current levels. The support for the current trend is at $3.26 and the resistance is at $4.40. Breaking either side of the range will give a clear picture of the trend formation.

Accumulating losses and lifetime heighs decouples the stocks price movement with its fundamentals, stock less attractive from an investment perspective. Hence, we suggest investors to 'Avoid’ the stock at the closing price of $3.890 per share, down by ~0.26%, as of 10^th August 2021.

Daily Technical Chart – HUO

Source: REFINITIV

Archer Materials Limited (ASX: AXE)

AXE  was incorporated in 2007 and is based in Adelaide, Australia. The company is engaged in the development of materials in quantum computing, biotechnology, and lithium-ion batteries. It is also involved in exploring graphite, copper, gold, nickel, cobalt, manganese, tin, and tungsten deposits. The company's current market capitalization is $325.62 million with the current price of $1.615 per share.

Financial & Operational Highlights – On  27^th July the company released its Quarterly activities report, stating it signed a computing agreement with IBM, along with Acher to collaborate with Australian Defence Prie NIOA. There has been positive progress been made with Max Kelsen in the development of the Quantum Neural Networks. On the financial front, the company did not recover any cash receipts from customers for the past twelve months ending 30^th June 2021, with the cash balance reported to $6.24 million and nil debt on the books.

Technical Analysis- The stock showed a continuous uptrend and formed the lifetime highs of $1.665 and prices are hovering at similar levels. The relative strength index at 62.33, 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 Day Simple Moving Average is currently hovering below the stock price at $1.427, indicating more bullishness on the stock from current levels.

Lack of operating revenues, declining cash balance, and lifetime stock prices, makes the stock less attractive from an investment perspective. Hence, we suggest investors to 'Avoid’ the stock at the closing price of $1.615, up by ~12.937%, as of 10^th August 2021.

Daily Technical Chart – AXE

Source: REFINITIV

Hawkstone Mining Limited - (ASX: HWK)

HWK is engaged in mineral exploration and development in the USA for lithium, gold, copper, and silver deposits. The company primarily focuses on the Lone Pine Gold project located in Idaho. Its flagship property is the 100% owned Big Sandy lithium project, which covers an area of 25 square kilometres located in Arizona. The company was incorporated in 1969 and is based in West Perth, Australia, having a market capitalization is $71.89 million, at the current price of $0.038 per share.

Financial & Operational Highlights – on 30^th July 2021, the company released its quarterly report for the period ending 30^th June 21, stating that it will spin out its interest in the Devil’s Canyon Gold-Copper project in Nevada and the Lone Gold Project, where the company will receive 40 million vendor shares as part of the spin-out. On the financial front, the company did not receive and cash receipts from customers in the past 12 months ending on 30^th June 2021. The cash balance was decreased for the period ending on 30^th June 2021 to $4.95 million from $5.21 million in 3Q FY21.

Technical Analysis- The stock exhibits an extremely volatile nature, following the continued downtrend forming lower highs and lower lows and recent upside after touching the lows of $0.022. The relative strength index is at 65.635, which is heading towards the upper end of the zone, indicating some more strength to the stock to drive it upwards.  The 21 days simple moving average is hovering below the stock price at $0.030, which implies the further upside movement of the stock from current levels. The support for the current trend is at $0.028 and the resistance is at $0.043. Breaking either side of the range will give a clear picture of the trend formation.

Lack of operating revenues, declining cash balance, and volatile stock prices, make the stock less attractive from an investment perspective. Hence, we suggest investors 'Avoid’ the stock at the closing price of $0.038 per share, down by ~9.52%, as of 10^th August 2021.

Daily Technical Chart – HWK

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 do not hold interests in any of the securities or other financial products covered on the Kalkine website.