• Repaying debt: Fortescue Metals Group Limited(ASX: FMG) stock surged about 0.9% on September 13, 2016 driven by the company’s announcement of a US$700 million repayment of 2019 Term Loan. This move by FMG is a part of their strategy, while the group would make the US$700 million Term Loan repayment on September 16, 2016. Moreover, FMG reported an annual interest savings of over US$26 million. Management reported that they would divert their free cash flow to repay debt, which would decrease their gearing while boost their balance sheet. Even Fitch Ratings reiterated their Long-Term Issuer Default Rating at BB+ and enhanced the Outlook to Stable from Negative. Fitch enhanced the rating of Fortescue’s Senior Unsecured Notes due in 2022 to BB+ while reiterated their Long-Term investment grade rating on the Secured Term Loan and Senior Secured Notes of BBB-. Fitch reassured investors that FMG is controlling their production costs in order to withstand the times of lower iron ore prices, and is still among the lowest-cost suppliers of iron ore to China. So the recovery of iron ore prices would further drive the group’s performance. Meanwhile, FMG stock rallied over 151.3% (as of September 12, 2016) during this year to date.
• Recommendation: We give a “Hold” recommendation on this dividend yield stock at the current price of $4.74

• R&D refund boosted balance sheet: Orthocell Ltd(ASX: OCC) stock surged over 10.15% on September 13, 2016 driven by the positive update of the group on their fiscal year of 2016 performance. The group’s ‘CelGro®’ is a naturally derived collagen medical device used for soft tissue repair. CelGro® is aimed for several orthopaedic, reconstructive and surgical applications and is being readied for first regulatory approval in Europe in 2016. Meanwhile, the group got R&D tax incentive cash refund of $1,507,774 in May 2016 for the financial year 2014/2015. This R&D refund boosted the group’s cash flow as well as enhanced the operational runway during a very active clinical trial program for its collagen platform technology, CelGro® and cellular therapy for tendon regeneration, Ortho-ATI®. On the other hand, we believe that the rally has placed the stock at a slightly higher level.
• Recommendation: We give an “Expensive” recommendation on the stock at the current price of $0.38

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