Stocks’ Details

Aeris Resources Limited

Quarterly Highlights: Aeris Resources Limited (ASX: AIS) is a diversified mining and exploration company that is engaged in the production of copper and gold. As on 17 November 2020, the market capitalization of the company stood at ~$157.45 million. During the quarter ended 30 September 2020, the company produced 20,237oz of gold at Cracow Gold Operations and 6,044 tonnes of copper at Tritton at an AISC of $1,282/oz and $3.33/lb, respectively. During the quarter, the company reported a healthy balance sheet with a decline of $31 million in net debt to $28 million and a cash balance of $64 million.

Tritton Production Summary (Source: Company Reports)

Outlook and Guidance: The company has provided guidance for FY21 and expects to produce gold of 70koz to 75koz at its Cracow Gold Operations at an AISC in the range of $1,525 to $1,575/oz. The company has a decent path for growth with multiple value catalysts and is focused on copper and gold M&A opportunities.

Stock Recommendation: The company is focused on operational excellence and is committed to build strong partnerships with the key stakeholders of the company. As per ASX, the stock of AIS gave a return of 44.82% in the past three months and a return of 42.37% in the last one month. The stock is also trading very close to its 52-weeks high level of $0.087 and thus retains the limited potential for growth. On a technical front, the stock of AIS has a support level of ~$0.074 and a resistance level of ~$0.086. Considering the current trading levels, softer market conditions due to COVID-19, and key investment risks, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the current market price of $0.085, up by 2.409% on 17 November 2020.

MMA Offshore Limited

Completion of Entitlement Offer: MMA Offshore Limited (ASX: MRM) offers a wide range of marine related services to major oil and gas exploration and production companies. As on 17 November 2020, the market capitalization of the company stood at ~$40.73 million. The company has recently completed the institutional components of the equity raising, wherein it raised ~$57 million. The retail component of the fully underwritten accelerated non-renounceable entitlement offer is expected to close on 27 November 2020 and is likely to raise ~$23 million.

FY20 Financial Highlights: During FY20, the company reported an increase of 14.1% in revenue to $273 million and delivered improved underlying earnings with an increase of 52.8% in EBITDA prior to one-off items and pre-AASB16. The company ended the period, with a healthy balance sheet, wherein cash balance amounted to $86.6 million, reflecting an increase of 23% on the pcp. The company also expects a fall in its existing debt facilities by a total of ~$93.7 million, reducing its gross debt to ~$173.2 million.

FY20 Financial Highlights (Source: Company Reports)

Stock Recommendation: During the global COVID-19 crisis, the services of MRM were considered essential and has a strong reputation supporting the oil and gas industry. The company retains a strong underlying business with a clear diversification strategy. As per ASX, the stock of MRM is trading close to its 52-weeks’ low levels of $0.023, proffering a decent opportunity for investors to enter the market. The stock of MRM gave a return of 25.03% in the past three months and a return of 2.49% in the last one month. On a technical front, the stock of MRM has a support level of ~$0.035 and a resistance level of ~$0.056. On a TTM basis, the stock of MRM is trading at a price to book value multiple of 0.6x, lower than the industry average (Energy) of 4.7x, and thus seems undervalued. Considering the current trading levels, decent financial performance amidst the volatile markets, key investment risks, and decent returns to shareholders, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.04, down by 9.091% on 17 November 2020.

Nanoveu Limited

Advanced EyeFyx Prototype Completed and Patents Lodged: Nanoveu Limited (ASX: NVU) is a technology company that shapes vision through the power of modern and cutting-edge nanotechnology. As on 17 November 2020, the market capitalization of the company stood at ~$6.20 million. The company has recently announced a more advanced version of its EyeFyx product for people suffering presbyopia, eliminating the need for glasses. With the completion of EyeFyx software development, the company will migrate the software into a system level and refine the Multi Lens Array into a stacked lens array. It is targeting production in 2H21.

Quarterly Highlights (For the Period Ended 30 September 2020): During the quarter ended 30 September 2020, the company added new distribution partners and reported sales for its B2B antiviral film and antiviral mobile phone protection products for a combined value of more than $250k. During the quarter, the company also completed its inaugural production run and filled the first sales orders for its antiviral protection products. During the September 2020 quarter, the company received $150k from customers and used a cash of $635k from operating activities.  

Consolidated Statement of Cash Flows (Source: Company Reports)

Stock Recommendation: The company is witnessing accelerating international momentum with agreements in several countries. As per ASX, the stock of NVU is inclined towards its 52-weeks’ low levels but is highly speculative. The stock of NVU gave a negative return of 19.27% in the past three months but a positive return of 11.66% in the last one month. On a technical front, the stock of NVU has a support level of ~$0.057 and a resistance level of ~$0.13. Considering the volatility in returns in the past three months, softer market conditions due to the global health pandemic, and key investment risks, we suggest investors to keep an eye on the business activities and give an ‘Avoid’ rating on the stock at the current market price of $0.067, up by 48.888% on 17 November 2020, owing to its recent completion of its advanced version of its EyeFyx product.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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