small-cap

Two stocks that plunged - Saracen Mineral Holdings and Regis Resources

Aug 04, 2016 | Team Kalkine

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Two stocks that plunged - Saracen Mineral Holdings and Regis Resources

Saracen Mineral Holdings Ltd

SAR Details

Solid performance: Saracen Mineral Holdings Limited (ASX: SAR) stock fell over 3.23% on August 04, 2016 due gold price movement. On the other hand, SAR stock surged over 196.8% during this year to date (as at August 03, 2016) due to heavy rally in the gold prices. Moreover, the group reported a solid performance and estimates its production to reach over 300kozpa by June 2017. AISC is expected to fall to A$950/oz by FY20, boosting cash-flow. The group’s two operational centers in Western Australia also delivered decent performance. Carosue Dam (NE of Kalgoorlie) reported over 160-170koz pa while Thunderbox (SE of Leinster) generated over 130-140koz pa. But, the heavy rally in the stock placed them at unreasonable P/E.
Recommendation: We give an “Expensive” recommendation on the stock at the current price of $1.795

Regis Resources Limited

RRL Details

Margins pressure: Regis Resources Limited (ASX: RRL) stock fell over 1.7% on August 04, 2016 impacted by the pressure in commodity prices. On the other hand, the group estimates its EBITDA margins to fall to 35% and 34% during 2016 and 2017, respectively. RRL is trading ex-dividend on August 23, 2016. Moreover, the stock generated over 78.8% during this year to date (as of August 03, 2016) placing them at unreasonable levels.
Recommendation: We give an “Expensive” recommendation on the stock at the current price of $4.15

Fall in margins (Source: Company Reports)

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