Mayne Pharma Group Ltd

MYX Details 
· US Lawsuit pressure dragged the stock lower: Mayne Pharma Group Ltd (ASX: MYX) stock crashed over 8.8% on December 16, 2016 as the group is among the several generic companies to get a subpoena from the Antitrust Division of the US Department of Justice (DOJ) relating to marketing, pricing and sales of select generic products. This investigation is mainly on their doxycycline hyclate delayed-release tablets (generic) and potassium chloride powders. On December 15, 2016, US states commenced legal proceedings against the group. Concerns are over the group’s engagement in conduct in the doxycycline hyclate delayed-release market with Heritage Pharmaceuticals Industries Inc. (Heritage) that was anticompetitive. Even though management from the group assured investors that there will be a minimal impact on the group’s potential earnings, the timing or outcome of the investigation or legal proceedings might pose an impact.

· Recommendation: MYX stock corrected over 25.4% in the last three months (as of December 15, 2016) and still trading at a higher level. We believe the pressure in the stock will continue in the coming months and hence we give an “Expensive” recommendation at the current price of – $ 1.30

Resolute Mining Ltd

RSG Details 
· Gold prices pressure impacted the stock: Resolute Mining Ltd (ASX: RSG) stock slipped over 10.6% on December 16, 2016 impacted by the ongoing decline in the gold prices while Vinva Investment Management became a substantial holder with 5.07% voting power. Fed’s outlook of a three rate hikes next year is pressurizing the gold prices performance. Recently, the group reported that the Queensland Government granted Prescribed Project status to the Ravenswood Expansion Project. The Ravenswood Expansion Project is expected to extend the local operations by a further 13 years to at least 2029, while enhancing the average annual gold production to more than 120,000 ounces. Ravenswood Expansion Project might lead to a future royalty payment to the Queensland Government of more than $100 million.

· Recommendation: RSG stock lost about 16% in the last one month (as of December 15, 2016) and we believe this pressure might continue in the coming months. We maintain our “Expensive” recommendation on the stock at the current price of - $ 0.96

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