Latest Research

Paragon Care (PGC) - Walking The Talk

Paragon Care LogoA $70m capital raising underway will help fund a number of acquisitions and allow PGC to continue effecting its consolidation strategy. The new businesses are expected to be accretive to earnings and we believe the integration risks are mitigated to a degree by successful execution to date. We maintain a buy call on a $1.20 valuation (prior $1.15).

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Gage Roads (GRB) - On Track

Gage Roads LogoGRB posted a stronger 2Q, with proprietary brand volumes demonstrating further growth. This increased brand awareness as GRB rolls out a well-articulated craft strategy has garnered attention, and longer term we believe investors will be rewarded if the strategy continues to unfold to plan. Further, with increasing brand awareness, particularly on the east coast, the potential for corporate interest cannot be ignored. Our recent hold call (which we maintain) reflects share price gains of nearly 150% over the last 6 months and a current valuation of $0.080 (prior $0.078).

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Threat Protect (TPS) - Been Busy Buying Lines

Threat Protect LogoRevenue picked up in the December Q and M&A activity saw TPS’s direct monitored lines grow by over 50% to ~8,200 connections. TPS is evaluating additional funding options to maintain the acquisition strategy that should result in operational and financial benefits as utilisation increases. We maintain a Speculative Buy call on a valuation of $0.26 (lower than the prior $0.28 largely due to the increased net debt position).

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Argonaut Micro Caps - Interims Preview

Argonaut LogoIn our FY17 results preview (August 2017) we flagged GRB and CLX as top picks in our ‘microcap’ universe. The share prices of both stocks have performed well since then. GRB has more than doubled, while CLX’s >20% gain has pushed the Company into our ‘small cap’ universe. Our key picks heading into FY18 interims are TPS and BOT. TPS turned the corner in 4Q17, has earnings visibility and a clear growth strategy, and we believe offers the best value among our microcap stocks that have earnings. Out of the earlier stage speculative stocks we believe BOT, with its more imminent catalysts, presents the most likely case for near-term gains.

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Saracen Mineral Holdings (SAR) - December Quarter Production

Saracen Mineral Holdings LogoSaracen (SAR) released December Q results with group production of 78koz, down 4% QoQ, at all-in sustaining costs (AISC) of A$1,176/oz (vs Sept Q AISC $1,008/oz). 1H production of 158koz is tracking well above the 300koz guidance for FY18. Cash increased to $82.9M (from $60.5m). We expect the 2HFY18 will be equally positive with high grade ores from Kailis and productivity improvements at Carosue Dam. Exploration continues to highlight the potential for mine life extension ahead of the upcoming 5-year plan. Despite the positives Argonaut continues to believe the stock is trading ahead of our risk weighted DCF valuation. We retain our preference for producers on significantly cheaper metrics such as Ramelius Resources (RMS, Not rated) and emerging producers such as Dacian Gold (DCN). We maintain our SELL recommendation and a revised $1.46 target price (prior $1.50).

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