Latest Research

Paragon Care (PGC) - Look Beyond Seasonality

Paragon Care LogoPGC’s interims delivered 46% EBITDA growth on 1H16 although the market focused on, and was disappointed by, a performance 11% weaker than 2H16. However with full year guidance close to our pre-results expectations, the extent of the seasonality in the business was not appreciated. We remain attracted to the sector and PGC’s long-term growth potential, and maintain a buy call on a $1.05 blended valuation.

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Vault Intelligence (VLT) - Interesting For Growth

Vault Intelligence LogoWe like the shift to a recurring revenue SaaS model. This is despite 2Q17 numbers which demonstrate the mismatch between client acquisition costs (which are immediate) and revenue (which takes time to ramp up). We remain positive on longer term growth potential, although have downgraded forecasts on the evidence of higher costs. Spec Buy maintained on a revised blended valuation of $0.047 (prior $0.055).

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Fortescue Metals Group (FMG) - 2Qtr17 Update

Fortescue Metals Group LogoFortescue Metals (FMG) reported December Q results with 42.2Mt shipped at US$12.54/wmt C1 vs Sept Q 43.8Mt @ US$13.55/wmt (-7% cost reduction, -4% shipped Q-o-Q). This was above Argonauts forecast of 41Mt. The Company repurchased a further US$1.0bn in debt, reducing net debt to US$4.0bn and net gearing to 30%. 1H production of 86Mt at an average C1 cost of US$13.05/wmt puts FMG in an enviable position to reach/beat the upper end of its stated guidance. We make revisions to our model to account for improved costs, reduced debt and higher short term iron ore prices. We upgrade our price target to $5.18ps ($3.81ps prior), and maintain our SELL recommendation due to share price appreciation.

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Salt Lake Potash (SO4) - 2Qtr17 Activities Yield Valuable Data

Salt Lake Potash LogoDuring the December quarter SO4’s operational highlights included trench pump tests, an off-lake drilling programme, and process development testwork that produced the first SOP samples from Lake Wells brine. The Scoping Study released in the prior quarter highlighted attractive opex and capex estimates. With feasibility work ongoing at Lake Wells we expect considerable newsflow, and numbers to be tightened, over coming months.

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Orthocell (OCC) - Quarterly Update

Orthocell LogoOCC has a strong cash position to progress its product pipeline. In the December quarter the Company achieved significant milestones and received high-level recognition for their innovative suite of products. The subsequent J&J collaboration announcement puts OCC on the international map in the orthopaedic space, whilst the granted patent in Europe further strengthens OCC’s IP.

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