Our Trading Operations Manager, Roberto Russo, discusses stand-out companies in the month of September.
The month of September is finally over with most investors thankful to leave the month behind and look toward the rest of the year.
The XJO retreated a total of 6% last month with extreme velocity, creating extremely negative investor sentiment for those who didn't hold a short position. However, as always we saw key movers in September that look like permanent additions to the investing watchlist as we enter the coming months.
QX Resources Ltd (ASX:QXR)
QX Resources is first on the list, which interestingly enough was the last mover for September. QXR peaked at a 50% increase after appointing Steve Promnitz as Managing Director to facilitate the growth of its lithium and gold projects. For those unfamiliar with Mr. Promnitz, he is the former Managing Director of Lake Resources (LKE:ASX), who secured the lithium assets in Argentina back in 2016 for a project now-know as Kachi lithium.
Lake was valued at a $1m market cap back then, with many investors following the ‘golden goose’ on this QXR trade. Only time will tell if similarities occur, a definite addition to the watchlist.
Australian Pacific Coal Ltd (ASX:AQC)
Coal has been on fire lately, (literally), with Newcastle Coal futures continuing to make gains without taking any breathers. Australian Pacific Coal which owns the famously controversial Dartbrook Coal Mine in the Hunter Valley NSW has seen multiple takeover notices, most notably of which is the equally controversial, Nathan Tinkler.
Being one of the more interesting potential M&A deals going around, Trepang (AQC’s largest shareholder) is threatening to roll the board if the JV ‘takeover’ deal was not agreed on by Themselves, M Resources and Tetra Resources, creating an air of hostility.
This deal overtook Tinkler’s offer of $1.00 a share, eventually resulting in Dartbrook getting recommissioned.
Mineral Resources Limited (ASX:MIN)
Mineral Resources is one for the ages, with a formidable growth story, and is largely backed by the directors; in fact, its majority shareholder is the Managing Director.
On the 9th of September, the AFR published an article stating that MIN is considering a potential listing (spin-out) of its lithium business. MIN responded:
“MinRes wishes to advise that, in the normal course of business, it regularly evaluates various strategic options to maximise value creation for shareholders, including in relation to its lithium business.”
This prompted investors to buy any shares on the sell side, seeing a total gain of 21% over a two-day period. An extremely impressive feat for a company already valued at A$13B.
Link Administration Holdings Ltd (ASX:LNK)
Link Administration was not excluded from the September woes as the Dyr & Durham deal began to decline.
Firstly, LNK started the month with optimism that the takeover would finally proceed, having received no opposition from the ACCC about the takeover and gaining clearance; all reflected in the share price. Three trading days later however, Link updated shareholders that its UK subsidiary, Link Fund Solutions Limited, may owe a restitution payment of A$519 regarding its role in the Woodford funds collapse. This caused the share price to see a significant drop of 20%, closing the month at a low of $2.80.
Where to from here?
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