These are the ASX small caps that equity analysts talk most about
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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|
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.
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.
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.