3 stocks to watch and ... the week that was
This is an older exclusive article for FinFeed subscribers which is now opened up. If you'd like to see new exclusive articles every week, please subscribe to our newsletter.
The market continues its up and down ride, just have a look at what Dale Gillham says about it below, however there were a few small cap stocks that delivered decent news this week and saw the benefits.
Here’s a few we’ve had our eye on.
Bod Australia (ASX:BDA)
Medicinal cannabis, CBD and hemp healthcare products company, Bod Australia Limited (ASX: BDA) this week announced it has received its first purchase order for CBD products for the US market.
The US market for CBD consumer products is expected to grow to US$6.9 billion by 2025.
The binding $312,000 purchase order has been made by multi-billion dollar Hong Kong listed H&H Group.
BDA has an exclusive global distribution partnership with H&H Group and today’s order is the first of several binding orders expected in the next few months, as BDA begins to increase its US footprint and become cash flow positive by 2020.
The upcoming US entry follows BDA’s recent international expansion initiatives in the UK, Italy, France and the Netherlands.
H&H Group is also the owner of Swisse, the Australian leader in the vitamins, herbal and mineral supplements market and has been helping to facilitate BDA’s global roll-out.
In July 2019, BDA entered a transformational exclusive licencing agreement as exclusive CBD partner to H&H Group, the parent company of Swisse Vitamins.
Under the agreement, BDA receives a royalty on net product sales as well as a cost-plus margin for the supply of its CBD extract and formulas.
Today’s news means its US roll-out is now well and truly underway and its entry into the US market could be the start of a significant share price rerating given the size of the market.
This week BDA started at 47 cents, hit a high of 54 cents before settling at 53 cents.
TechGen Metals (ASX:TG1)
TechGen Metals (ASX:TG1), a copper-gold explorer with drill ready targets, listed on the ASX this week.
TechGen holds a portfolio of 12 exploration licences strategically located in three highly prospective geological regions of Western Australia: the Yilgarn Craton, Paterson Orogen and Ashburton Basin.
These areas have undergone very little modern exploration, but lie in broader regions where prominent discoveries have been made including Winu, Telfer and Havieron.
TG1 raised $6M on the IPO and should be funded for at least six months of exploration work.
There is a lot to like about TG1:
● Scheduled work plan and plenty of activity to look forward to.
● Tier-1 jurisdiction in WA in proximity to several large existing discoveries.
● Very little modern exploration on its ground, but its projects lie in broader regions where prominent discoveries have been made.
● Gold and copper prices are nearing record levels.
● Highly leveraged to growth - tiny Enterprise Value of $4.5M... and plenty of upside on discovery.
As well as listing, TG1 also announced that it had commenced its maiden reverse circulation (RC) drilling campaign at its El Donna Gold Project in the Yilgarn Craton, 50 kilometres north-east of Kalgoorlie.
With results to come shortly, and a heavy work program slated to December, interest in this stock is expected to rise considerably.
TG1 listed at 20 cents, closed its opening day at 29 cents and finished the week at 27.5 cents.
Los Cerros Ltd (ASX:LCL)
It was a solid week for LCL starting at 18 cents and finishing at 19.5 cents.
This week LCL hit a “spectacular” intercept of 460.9m @ 1.11g/t Au, with gold mineralisation starting from surface.
LCL is exploring giant gold systems in the hills of Colombia, in the Mid Cauca Porphyry Belt, home to many multi-million ounce gold discoveries.
Today’s results focused on a diamond drill hole at Tesorito South, part of Los Cerros’ Quinchia Gold Project.
The hole delivered an outstanding intercept of 460.9 metres grading 1.1 g/t gold from surface within a broader intercept of 582 metres at 0.94 g/t gold from surface.
Already, LCL has delivered among the best gold intersections we have seen over the past few years of any company.
LCL has produced 2 drill intercepts from Tesorito ranking in the top 10 drill results of 2021 on the ASX.
With $6M in the bank and 3 diamond rigs drilling continuously across its many targets, we expect to see more “spectacular” results to come.
The best and worst performing sectors this week
Information Technology has been the strong performer up over 7 per cent followed by Materials and Consumer Discretionary up over 3 per cent. The worst performing sectors include Utilities, which is down slightly so far followed by Consumer Staples and Healthcare, both of which are up over 1 per cent.
The best performers in the ASX/S&P top 100 stocks include Afterpay up over 13 per cent followed by Cleanaway Waste Management also up over 13 per cent and Reece Limited up over 11 per cent. The worst performing stocks include Incitec Pivot down over 4 per cent followed by AMP down over 3 per cent, while ALS Limited is down over 1 per cent
What's next for the Australian share market?
According to Wealth Within’s Dale Gillham, “In another interesting week, and after a lacklustre week last week, the market has put on a show rising strongly following the Easter break but, more importantly, it looks to have finally decided on a direction. In my last report, I mentioned that to change my mind about the market being short term bearish to bullish, it needed to rise above 7,200 points and this week it has done that.
“That said, I would have preferred the market to fall away slightly before rising, as this would have made the subsequent rise steadier and more sustainable. Right now, it looks likely the market will be generally bullish for the next four to six weeks.
“I still believe stocks in the Energy, Financials and Materials sector will perform well moving forward.”
Short-term positions in small, early stage ASX companies,
with high potential and near term price catalysts.
Focusing on resource exploration, early-stage tech, and biotech.
Exceptional opportunities across a broad range of
early-stage growth sectors with strong management.
Seeking 1,000% plus returns across medium to long-term holds.
Longer-term positions in a variety of sectors.
Seeking strong management where traction is established and have entered into a growth phase.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.