If you’re a client of a big financial firm you would know that the majority of stocks covered are larger firms. An analysts’ job is far easier because they will have a longer trading and financial history than their small cap peers.

Yet hundreds of small caps sit on the ASX without any analyst coverage at all and investors have little to rely on other than the stock’s long term vision and whether or not it can become reality.

You may see the occasional report released on the ASX but often it is from the micro-cap broker that either just raised money for them or is hoping to do so.

However, Stockhead has found nearly 30 stocks that in the last 12 months have been covered by four firms or more in the last 12 months.

Code Name Price (2.30pm 13.5.19) Market Cap Total Reports (12 months) Brokers Average Target price Premium to current price
CDV CARDINAL RESOURCES LTD 0.39 $149.2M 6 Cormack, Hartleys, Beacon, Argonaut, RFC Ambrian and Clarus Securities 1.09 1.79
DCN DACIAN GOLD LTD 1.755 $396.1M 6 Canaccord, RBC, Argonaut, Macquarie, Bell Potter and Hartleys 2.07 0.18
PNL PARINGA RESOURCES LTD 0.14 $64.2M 5 Canaccord, Macquarie, Argonaut, HC Wainwright and Roth Capital partners 0.65 3.64
FAR FAR LTD 0.067 $407.2M 6 RBC, Credit Suisse, Evans & Partners, Canaccord, Morgan Stanley, Bell Potter 0.13 0.94
SXY SENEX ENERGY LTD 0.325 $472.2M 8 Credit Suisse, Hartleys, Morgan Stanley, JP Morgan, Canaccord, Bell Potter, Morgans. Macquarie 0.46 0.42
BSE BASE RESOURCES LTD 0.255 $303.3M 6 Berenberg, Peel Hunt, Numis Securities, Hartleys, RFC, Canaccord 0.47 0.84
CGL CITADEL GROUP LTD/THE 6.9 $341.9M 5 RBC, Bell Potter, Wilsons, Evans & Partners, Shaw & Partners 8.56 0.24
SYR SYRAH RESOURCES LTD 1.145 $390.8M 5 Canaccord, Morgan Stanley, Credit Suisse, Macquarie, Everblu 2.53 1.21
EML EML PAYMENTS LTD 1.9975 $498.0M 5 RBC, Bailleu, Canaccord, Wilsons, Petra 2.24 0.12
WAF WEST AFRICAN RESOURCES LTD 0.315 $269.6M 5 Sprott, Cormack Securities, Hartleys, Argonaut, Macquarie. 0.61 0.94
CLQ CLEAN TEQ HOLDINGS LTD 0.285 $216.5M 4 Canaccord, BMO, Macquarie, GMP 1.45 4.09
RBL REDBUBBLE LTD 0.99 $256.2M 5 Goldman Sachs, Canaccord, Petra, RBC, Morgans 1.09 0.1
MWY MIDWAY LTD 3.46 $302.0M 4 Shaw and Partners, Bell Potter, Morgans, Ord Minnett 4.05 0.17
BGL BELLEVUE GOLD LTD 0.605 $297.5M 4 Canaccord, Macquarie, Sprott and Argonaut 0.78 0.29
MLX METALS X LTD 0.25 $168.8M 4 Canaccord, Bell Potter, Macquarie, Hartleys 0.55 1.2
ANG AUSTIN ENGINEERING LTD 0.17 $98.4M 4 Blue Ocean, Argonaut, Petra, Wilsons 0.29 0.71
SO4 SALT LAKE POTASH LTD 0.6 $122.7M 5 Canaccord, Taylor Collison, Shore Capital, Cenkos Securities, Argonaut 1.12 0.87
PEA PACIFIC ENERGY LTD 0.61 $262.4M 4 Petra Capital, Hartleys, Bailleu, Argonaut 0.75 0.23
CLH COLLECTION HOUSE LTD 1.295 $181.8M 6 Evans & Partners, Bailleu, JP Morgan, Canaccord, Morgans, Blue Ocean 1.76 0.36
MOD MOD RESOURCES LTD 0.305 $91.1M 5 Canaccord, Arden, Edison, Blue Ocean, Argonaut 0.78 1.56
SMR STANMORE COAL LTD 1.42 $368.8M 4 Petra, Wilsons, Bell Potter, Argonaut 1.78 0.25
COI COMET RIDGE LTD 0.29 $211.1M 4 Canaccord, RBC, Taylor Collison, Shaw & Partners 0.56 0.93
PPS PRAEMIUM LTD 0.4275 $172.1M 7 Shaw, Bell Potter, Bailleu, Canaccord, Goldman Sachs, Morgans, Wilsons 0.64 0.5
PAN PANORAMIC RESOURCES LTD 0.35 $194.1M 4 Hartleys, Bailleu, Macquarie, Morgans 0.615 0.76
BBN BABY BUNTING GROUP LTD 2.3 $285.8M 4 Morgans, Macquarie, Morgan Stanley, Everblu 2.53 0.1
TNK THINK CHILDCARE LTD 1.685 $101.9M 4 RBC, Canaccord, Wilsons, Moelis 2.14 0.27
ADH ADAIRS LTD 1.68 $281.2M 5 Goldman Sachs, Morgans, Bailleu, Wilsons, Everblu 2.37 0.41
G1A GALENA MINING LTD 0.385 $140.3M 4 Petra Capital, Blue Ocean, Hartleys, Argonaut Securities 0.53 0.38
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The most eyeballed stocks

The stock with the most reports was veteran oil explorer Senex Energy (ASX: SXY). Since January it has received buy ratings from Macquarie, Morgans, Bell Potter, Canaccord and Hartleys. Credit Suisse, JP Morgan and Morgan Stanley were neutral.

By 2021, Senex anticipate increasing production from 1 million barrels of oil equivalent to 4 million. Hartleys set a target of 48 cents per share, considering their potential for sales deals and oil prices recovering.

J.P. Morgan however were more cautious only rating 40 cents, noting recent production figures were slightly below their estimates. They also were uncertain as to the quality of their Queensland assets.

The second most analysed stock was financial platform Praemium (ASX: PPS), which has had seven reports written, all of which since the start of April when it released its half-yearly.

Brokers’ key concern was the loss of Praemium’s major client ANZ Private which contributed eight per cent of its revenue ($4m). It did gain Morgan Stanley and Shaw & Partners as clients but this has only made up $2 million.

Morgans, Bell Potter, Shaw & Partners, Canaccord and Bailleu recommended buys whilst Goldman Sachs and Wilsons recommended hold.

While even some ‘buy’ reccomendations had downgrades, brokers believed in their product, the market opportunity and its trading ratios compared to competitors.

Commodity prices

Some mining stocks have been helped by commodity prices and even the most bullish of brokers have admitted as such.

Potash explorer Salt Lake Potash (ASX: SO4) has had five reports including one by Taylor Collison’s in early April which set a target price of $1.21. This was and still is double its current price of 60 cents.

Taylor Collison admitted this was contingent on potash prices and AUD/US exchange rates. While its primary target assumed a US$500 p/t and a 75 cents exchange rate, a higher Aussie dollar and low potash price (85 cents and US$350p/t) would literally sink the stock.

As Stockhead has covered, Australian coal stocks have had a strong year and Stanmore Coal (ASX: SMR) is one stock that has caught brokers’ attention.

One was Wilsons who set a $1.45 price target in early April.

Stanmore has now nearly reached it. Yet as with Salt Lake Potash, the key to continued growth is coal prices – although having $58 million cash on hand can’t hurt.

The content of the reports referred to in this article were not selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in those reports.

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