Azure Healthcare Limited

AZV Details

FY20 Financial Highlights: Azure Healthcare Limited (ASX: AZV) is engaged in the manufacturing, service, supply, and distribution of healthcare and communications equipment. As on 18 November 2020, the market capitalization of the company stood at ~$28.41 million. During FY20, the company reported a slight decline in revenues to $31.59 million in FY20 from $31.69 million in FY19. However, it managed to control its costs and had access to various government stimulus packages. Thus, the company reported a higher gross profit of $17.88 million in FY20 from $14.58 million in FY19. Despite the increasing challenges from the COVID-19 crisis, the business of AZV remained resilient. During the year, the company reported NPAT of $2.65 million, reflecting an increase from $637k in FY19.

FY20 Financial Highlights (Source: Company Reports)

Future Expectations: The company seems well-placed to benefit from the market growth due to its broad coverage across multiple regions and its market-leading products. With the innovation in investments, the company is likely to grow its market share with premium products. AZV also expects strong sales opportunities despite the softer market conditions. The company is set to hold its Annual General Meeting on 24 November 2020.

Stock Recommendation: During FY20, the company reported a healthy balance sheet and is expecting an increase in the global demand for nurse call systems that can deliver more efficient and reliable workflow processes. As per ASX, the stock of AZV is trading slightly above the average 52-weeks’ levels. The stock of AZV gave a return of 31.42% in the past three months but a negative return of 1.60% in the last one month. On a TTM basis, the stock of AZV is trading at an EV/Sales multiple of 0.6x, lower than the industry median (Healthcare) of 12.8x, and thus seems undervalued. On a technical front, the stock of AZV has a support level of ~$0.086 and an immediate resistance level of ~$0.105. Considering the current trading levels, returns in the past three months, modest long term outlook, and key investment risks, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.092, down by 8.001% on 18 November 2020.

AZV Daily Technical Chart (Source: Refinitiv, Thomson Reuters) 

Pursuit Minerals Ltd

PUR Details

Allotment of Rights Issue: Pursuit Minerals Ltd (ASX: PUR) is engaged in the exploration of mineral on its tenements located in Queensland, Sweden, Finland, Norway, and the USA. As on 18 November 2020, the market capitalisation of the company stood at ~$9.91 million. The company has recently completed its rights issue by issuing of ~157.41 million fully paid ordinary shares for $0.009 per share, raising ~$1.41 million.

Quarterly Highlights (For the Period Ended 30 September 2020): During the quarter ended 30 September 2020, the company entered a binding acquisition agreement with Mining Equities Pty Ltd and Peter Gianni to acquire the Gladiator Gold Project. During the quarter, the company focused on assessing the potential to extend the limits of the Stormyra nickel-copper deposit with respect to its Norway Nickel project. With respect to its Finland Vanadium, the company has been granted the research permit from Metsahallitus to start the Phase 1 exploration and drilling program. At the end of the period, the company reported cash reserves of $596k and used $147k of cash from operating activities.

Consolidated Statement of Cash Flows (Source: Company Reports)

Stock Recommendation: The group projects remain in the early exploration stages and hence is unlikely that it will generate taxable income in the foreseeable future. The company has scheduled its AGM on 30 November 2020. The stock of PUR gave a negative return of 6.97% in the past three months but a positive return of 7.34% in the last one month. On a technical front, the stock of PUR has a support level of ~$0.006 and an immediate resistance level of ~$0.026. Considering the current trading levels, volatile returns in the past three months, softer market conditions due to the COVID-19 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 $0.013, down by 7.143% on 18 November 2020.

PUR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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