SUNDAY ROAST: The ASX small caps that lit a fire under Stockhead’s experts this week
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To Dundas or not to Dundas (ASX:DUN)? That’s a curly question facing speculators who jumped in on news of impressive visible sulphides that showed up in an alleged long drop hole. And not just any dunny – one close enough to the celebrated Nova nickel-copper discovery to warrant excitement.
Fuel was added to the fire when another diamond drill hole encountered another 358m of visual sulphides – a good indication for nickel, copper and cobalt rich rocks. DUN shares surged 23% on the day to 85c.
Guy Le Page – who also has geologist chops – reckons we’re probably not looking at a Silver Knight (Mark Creasy) or Nova Bollinger Ni-Cu-Co story. But “there is no doubt something lurking down there“.
There’s a couple to things to note – it’s a portable XRF reading, and even the company cautioned that “visual estimates of sulphide abundance should never be considered a proxy or substitute for laboratory analysis.”
On Thursday, those punters that jumped in early found out exactly how reliable XRF readings can be when the lab assays came in for the “dunny hole”. And, well, you may as well have bought a dunny hole. Shares dropped back to 54c.
We’re not done yet though, because the “real hole” samples are still in the lab. And you’ve just seen what can happen if the right result comes through.
Do you feel lucky?
We’ve been watching BNPLs trawl the bottom for so long now, we thought it was worth a shot. Let’s throw the top line players, that 18 months ago were celebrating ludicrous valuations, at chart wizard Carl Capolingua.
Surely a breakout is coming soon, Carl? What do your famous candles say?
Block Inc (ASX:SQ2 – $89) – Avoid until a close above $110.20
Humm Group (ASX:HUM – 48c) – Avoid until a close above $0.59
Latitude Group Holdings (ASX:LFS – $1.30) – Avoid until a close above $1.75.
Sezzle (ASX:SZL – 48c) – Avoid until a close above $0.72
Splitit Payments (ASX:SPT – 14c) – Avoid until a close above $0.31.
Zip Co (ASX:ZIP – 63c) – You guessed it. Avoid until a close above $0.94.
Well, at least there’s plenty there for the shorters to think about.
A year ago, Washington H. Soul Pattinson (ASX:SOL) was riding all-time highs of around $40 after recording an after-tax profit of $328.1 million – a whopping 93% up on the previous year. For the 20th straight year, it increased it dividends – the only ASX20 stock to achieve that feat.
FY22 eclipsed that, hitting $834.6m after-tax profit (154.4% on FY21), and stretching that golden growing divvie run to 21 years. The share price at the time of that release? $25.27.
Tough crowd, but there’s signs of a climb underway, and SOL chairman Robert Millner and non-executive director Thomas Millner aren’t hanging around. At that price, they indirectly snapped 170,000 shares through their holding company, valued at the time around $4.5 million.
Garimpeiro’s looking for value on the acquisition trail. The thinking goes something along the lines that “to be a takeover target, a stock needs to be assessed as undervalued in the first instance”, and he came up with these two.
Tietto (ASX:TIE) was trading at 66.5c mid-week for a market cap of $718 million, and is on a tear lately because the hallowed first production moment is close, from its 3.45 million ounce Abujar project in Cote d’Ivoire.
But wait, wait – there’s also a couple of Chinese groups that have emerged as substantial shareholders. Roll back to 2020 when Cardinal – also sitting on a shovel-ready 5.1 million ounce Namdini gold project – found itself eyed off by Russian group Norgold. The takeover bidding started at 47.5c, China’s Shandong entered the fray, and Cardinal eventually went for $1.075.
And then there’s De Grey (ASX:DEG), trading mid-week at 97.5c for a market cap of $1.37 billion. So, a bit pricey. But still good enough value for Gold Road to find another $26 million to shore its interest in DEG up to 19.99% – a level otherwise known as a launch pad for a takeover bid.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.