Wide Open Agriculture Limited (ASX: WOA)

Incorporated in 2015, WOA is involved in the advancement of farmland portfolio and food brand by creating beef, lamb, poultry and pantry staples in the name of Dirty Clean Food (DCF). Its market capitalization stood at AUD 86.41 million as of 16^th November 2021.

Financial & Operational Updates – As per the recent update on market testing of high protein oat milk on 16^th November 2021, its initial concept design, packaging, taste and sensory testing is executed successfully, and its launch is due for 4QFY22 depending on the refinement of final recipe. As per the Quarterly Report released on 26^th October 2021, WOA witnessed revenue growth of ~17% Q-o-Q and ~118% Y-o-Y to ~AUD 1.67 million in 1QFY22. A sequential increase of ~31% was observed in its digital business with the growing traction in WA. As per the Annual Report FY21, even after gaining an increase of ~212% Y-o-Y in revenue from ordinary activities, its net losses rose by ~406% Y-o-Y to ~AUD 7.53 million.

Technical Analysis: WOA's price is trading in a tight range between AUD 0.645 to AUD 0.82 and the prices are struggling to surpass the trend-following indicators 21-period SMA and 50-period SMA on a daily chart. The momentum oscillator RSI (14-period) is also trading at 54.532 in a mid-range, suggesting a directionless movement. Immediate support levels are AUD 0.72 and AUD 0.645 while immediate resistance levels are AUD 0.82 and AUD 0.995.

After considering the substantial increase in Net Losses for FY21, and the ~2.00% return it has given in past nine months, the scrip has not been able to reflect its growth in revenue and other developments in its price levels. Therefore, we consider it is prudent to “Sell” this stock and book profit at the current price of AUD 0.78 per share as of 16^th November 2021, 12:44 PM (GMT+10), Sydney, Eastern Australia.

Daily Technical Chart – WOA

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.

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