Guy Le Page

Director, responsible executive, RM Corporate Finance

No one seems to be buying the uranium narrative. As Le Page notes:

“With producers US, France, Japan, UK, and Canada, agreeing to form an alliance to combat Russia’s dominant position in the global nuclear fuel market, which last year supplied nearly 40% of the global market in enriched uranium, you would think the stage is set for uranium to explode and re-test the highs of 2007.

“Meanwhile, uranium equities are approaching 52-week lows, surely there must be an opportunity here?”

Well, maybe two. Le Page’s picks are a low-risk approach in advanced developer Paladin Energy (ASX: PDN) which is gearing up for a restart in Q1 CY 2024. Its Langer Heinrich mine in Namibia is now 40% complete, and projected to produce over 75Mplbs of uranium at a C1 cost of around US$27/lb.

PDN is currently trading at 62c but Macquarie says the above figures value it around $1, which Le Page “wouldn’t disagree with”.

And on the smaller end, Moab Minerals (ASX: MOM) has “some good acreage in the US”.

That includes around 20sqkm of claims in Colorado containing a number of historic uranium mines “that have seen little or no comprehensive exploration since the 1970s.”

And its within trucking distance of an operating uranium-vanadium mill with 90% spare capacity available to toll treat ore.

“At $0.007/share, over $5.0 million in cash and market capitalisation of $3.3 million I can’t see too much downside,” Le Page notes.

Ron Shamgar

Head of Australian equity strategies, Tammin Asset Management

“The only profitable, dividend paying EV exposure on the ASX.” Sounds like a big call, but Shamgar says Tammin’s FY23 estimate for IPD Group (ASX:IPG) is $15 million NPAT and it “has $23 million net cash on the balance sheet”.

IPG is a national distributor and service provider to the Australian electrical market. Providing end-to-end solutions to the Australian EV market (read “charging solutions”) is just a small part of its business now, after it acquired Gemtek Group, a turn-key energy management and EV solutions provider, last year.

But it’s a key part of IPG’s plan to expand offerings in the EV charging market going forward, and one of the key criteria that Tammin Asset Management looks for when investing is “companies operating in industries with strong tailwinds”.

You can add recycling and waste management to that group. Shamgar’s pick there is Close the Loop (ASX:CLG).

Listing just two years ago, CLG has moved quickly to build a most with several acquisitions, establish a network of 260,000 global collection points for recycled waste, and lock down critical IP.

It’s currently trading at 36c but Tammin has a 55c valuation on it off the back of “an undemanding valuation of 4.8x EV/EBITDA and 7.5x PE for FY23” and “a transformational acquisition of ISP Tek based in the US”.

That $100m deal secured CLG an electronic refurbishment arm dealing in full lifecycle recovery and sales of laptops, PCs and printers for large OEMs such as HP, Dell and Microsoft to name a few. Shamgar said it transforms Close the Loop into “a $200 million revenue, $43 million EBITDA and $24 million NPAT company”.

Upgrades, rerates and trials

Broker Taylor Collison sees an Outperform for Pharmaxis (ASX:PXS) as the biotech accelerates plans for its anti-fibrosis drug, PXS-5505.

There’s a few things that need to work in its favour, obviously. A potential $12m capital raise in FY25, for one. And an expansion of its plans for its anti-fibrosis drug, PXS-5505 and Phase II trial for an additional combo therapy arm to treat myelofibrosis (MF).

That’s all on the back of encouraging feed back from the US FDA after an interim safety and efficacy review of its ongoing monotherapy MF trial.

“We could see a decision to progress to a pivotal randomised Phase IIb/III trial taken before the end of 2024.”

If all goes well, Taylor Collison is comfortable slapping a hefty potential target price of 19c on the stock versus current price of 5.5c.

The “cheapest stock to have filed an FDA NDA”? According to Euroz Hartleys, that would be Botanix Pharmaceuticals (ASX:BOT).

BOT’s lead dermatology product Sofpironium Bromide is a novel treatment for Primary Axillary Hyperhidrosis. You and I would know that as “excessive sweating”.

Earlier this month, BOT successfully completed its FDA mid-cycle review meeting for Sofpironium Bromide, and raised $10 million via a single tranche placement at 9c. The funds will go toward commercialisation activities ahead of FDA approval in September this year.

Euroz is pretty thrilled with the FDA’s response so far, with “no significant issues, no major clinical safety issues or risk management issues”.

Above all Sofpironium Bromide has proven itself in Japan, where it is already approved and selling. Based on that, Euroz believes it could potentially do +US$100 million of sales in the US.

“We maintain our Speculative Buy recommendation with an increased 28c per share,” it noted earlier this week. That’s a 20c pop on Thursday’s price of 8c.

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.

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