Kodal Minerals PLC

Kodal Minerals (LON: KOD) is an FTSE AIM All-Share index listed lithium focused development and exploration company. Moreover, it is focused on the development of its Bougouni Lithium Project in Southern Mali.

Rationale for Valuation – Watch at GBX 0.255

• No Revenue: The Company remained in the exploration stage and had not generated any revenue yet.
• Weak Profitability: The operating loss and net loss had widened during H1 FY22 when compared with the prior-year levels.
• Operational Progress: KOD had made accelerated progress regarding the development of the Bougouni Lithium Project and the advancement of other gold projects during H1 FY22.
• Omicron Variant: The increased number of Omicron cases worldwide could delay the drilling activities.
• UK GDP: The UK GDP grew by around 1.1% during Q3 FY21, less than the estimated figure of 1.3%.
• Unfavourable Technical Indicator: From the technical standpoint, the 20-days exponential moving average price of GBX 0.275 reflects a bearish price momentum.

One Year Share Price Chart

 (Data Source: REFINITIV, Analysis by Kalkine Group)

Conclusion

Based on the weak profitability and an unfavourable technical indicator, we have given a “WATCH” recommendation on Kodal Minerals PLC at the closing market price of GBX 0.255 (as of 21 December 2021). However, for any profit booking scenario, buy and holding levels should be looked at as per the risk appetite of investors.

CAP-XX Limited

CAP-XX Limited (LON: CPX) is an FTSE AIM All-Share index listed Australia-based company engaged in the design and manufacture of thin, flat supercapacitors and energy management systems.

Investment Rationale – Watch at GBX 6.55

• Low Cash Reserves: The cash reserves came out to be lower than the expectations at the end of FY21 because of an underpayment of royalties by a licensee.
• Loss Making Entity: CPX has been consistently reporting a net loss from the last six years (FY16 to FY21).
• Top-Line Business: The top-line revenue witnessed a CAGR growth of negative 3.78% for the last six years period from FY16 to FY21.
• Disappointing UK GDP: The UK GDP demonstrated a slower-than-expected growth during the third quarter of 2021.
• Unfavourable Technical Indicators: From a technical standpoint, the stock price is hovering around the upper Bollinger band, reflecting a bearish price momentum. Moreover, the 14-days RSI of ~79.44 also reflects an overbought territory.

One Year Share Price Chart

 (Data Source: REFINITIV, Analysis by Kalkine Group)

Conclusion

Based on the loss-making nature, reduction in cash reserves, and unfavourable technical indicators, we have given a “WATCH” recommendation on CAP-XX Limited at the closing market price of GBX 6.55 (as of 21 December 2021). However, for any profit booking scenario, buy and holding levels should be looked at as per the risk appetite of investors.

Baron Oil PLC

Baron Oil PLC (LON: BOIL) is the FTSE AIM All-Share listed Company, which deals with operations, production, and the development of Oil & Gas.

Investment Rationale – Watch at GBX 0.0575

• Top-Line Business: BOIL had not generated any revenue yet as the Company had not started production.
• Penny Nature: The Company’s low market capitalization of GBP 6.63 million makes it a risky bet for the investors.
• Omicron Variant: The increased restrictions because of the Omicron variant of coronavirus worldwide may cause a delay in exploration programmes.
• Unfavourable Technical Indicator: From a technical standpoint, the stock price is hovering lower than the 20-days exponential moving average of GBX 0.0634, reflecting a bearish price momentum.

One Year Share Price Chart

 (Data Source: REFINITIV, Analysis by Kalkine Group)

Conclusion

Based on the penny nature of the stock, negligible revenue, and unfavourable technical indicators, we have given a “WATCH” recommendation on Baron Oil PLC at the closing market price of GBX 0.0575 (as of 21 December 2021). However, for any profit booking scenario, buy and holding levels should be looked at as per the risk appetite of investors.

 *The reference data in this report has been partly sourced from REFINITIV.

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