Every Tuesday afternoon we publish a collection of topics and give our expert opinion about the Equity Markets. From big market wins to industry updates and our expert opinions to explain it all.
Barclay Pearce Client Success
Austar Gold Limited (ASX: AUL) recently completed a heavily oversubscribed capital raise of $1.96 Million. Barclay Pearce Capital acted as lead manager and received bids for up to $6 Million.
Investment Highlights:
- A rapid increase in production at Morning Star.
- Increased production and recovery through substantial capital investment.
- Significant potential for further growth of AUL's tenement portfolio through regional exploration.
Read the full announcement here.
The Price of Gold & Australian Commodities ~ September 2020
Our Senior Investment Analyst, Ethan Perrett, shares his position on some of Australia's main commodities to assist you with your portfolio decisions and to save you the greatest commodity in the world - time!
Watch the commodity break down here.
Altium is a large-scale technology company focused on the development and sale of computer software for the design of electronic products. The company is based in Australia but operates in the Americas, Europe, Emerging Markets, and Asia Pacific. ALU reported revenues of $189 Million AUD in FY20, with an EBITDA margin of 40%. Long-term, the company is dedicated to maintaining a margin of over 30%, which is significant when considering the strong revenue growth YoY.
Altium's revenue is predominantly subscription based. The company recently surpassed 51,000 subscribers, which means that 60% of revenue is recurring. ALU is debt free, and has a cash position of $93.1 Million. After conducting thorough analysis, we believe that Altium Limited presents considerable value for investors, with a strong chance of producing positive risk-adjusted returns.
Resources & Energy Group (ASX: REZ)
REZ is an Australian mineral resource exploration company that is committed to developing a portfolio of high-quality assets across Western Australia and Queensland. The company has recently completed the sale of its interest in the Radio Gold Mine, for a total consideration of $2 Million. This sale has allowed REZ to concentrate on the highly prospective Mount Mackenzie and East Menzies Projects, bringing them closer to production. The Mount Mackenzie Gold Project resource estimate has been updated to 129 koz of gold, with a forecasted free cash flow of $54 Million. Additionally, the company recently announced positive drill results at the East Menzies Project.
Barclay Pearce has undertaken a detailed valuation of REZ, and found that it provides investors with significant upside. The spot price of gold has increased significantly, which further strengthens the outlook for junior gold mining companies. REZ is poised to capitalise on this environment, and generate significant returns for shareholders.
Laybuy Group Holdings Ltd (ASX: LBY)
Laybuy Group is a provider of Buy Now Pay Later services operating across Australia, New Zealand and the United Kingdom. LBY enables customers to delay the payment of purchases across 6 weekly interest-free instalments. Laybuy performs an immediate credit check upon signing up and imposes a purchase limit based on credit history, which is not featured in many other Buy Now Pay Later services.
The company currently has 5,600 active merchants and 470,000 active customers. The corporate strategy is heavily focused on expansion into the UK and solidifying its position as a market leader in New Zealand. Laybuy Group listed at 12:00pm AEST on the 7th of September 2020, raising $80m at $1.41/share with an indicative enterprise value/revenue of 12.3x. LBY traded at $2.10 at the open, we recommend adding this stock to your watch list.
Adacel Technologies Limited (ASX: ADA)
Adacel is a leading developer of operational air traffic management systems and advanced air traffic control simulation and training solutions. ADA’s Aurora automated air traffic management systems is a highly configurable product designed to increase safety and efficiency in all air traffic domains and features advanced flight and surveillance data processing, advanced conflict prediction, clearance processing, coordination capabilities as well as electronic flight strips.
Additionally, Adacel’s MaxSim offers air traffic simulator training to deliver a seamless transition to the real-life Aurora air traffic management system. The integrated training simulator flawlessly emulates the operational environment with advanced functionality to enhance air traffic controllers training, helping boost self-confidence and fluency in Aurora. Adacel is currently trading at a relatively low 1-year forward P/E ratio of 11.7x giving investors significant potential for capital appreciation.
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Every Tuesday afternoon we publish a collection of topics that catch our eye. From big market wins to industry updates and our expert opinions to explain it all. It's a great way to know what we know about the market. To receive our exclusive E-Newsletter, subscribe to 'As Barclay Sees It' now.
