Three Diversified Stocks Under 20 Cents Report with Decent Long-term Growth Potential -ICI, DRO, SNS

1. iCandy Interactive Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 94.08mn)

iCandy Interactive Limited (ASX: ICI) is involved in the development and licensing of mobile games with operations in Australia, New Zealand, and Southeast Asia.

Business Updates: The below picture gives an overview of key valuable updates:

1HFY22 Summary: During 1HFY22, the company experienced notable growth, which is likely to continue as ICI has started recognising contributions from newly acquired business units like Lemon Sky Studios:

Key Ratios:  During 1HFY22, ICI recorded a cash cycle of 74.6 days as compared to 325.8 days in 1HFY21. Below plotted the trend of Gross Margin since 1HFY20.

Outlook:

 Technical Commentary:

Stock Recommendation:

2. DroneShield Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 75.53mn)

DroneShield Limited (ASX: DRO) provides Artificial Intelligence based protection against advanced threats such as counterdrone and Electronic Warfare application.

Recent Updates:

Insights of 3QFY22:

Key Ratios: DRO recorded accounts receivable turnover ratio of 8.9x in 1HFY22 as compared to 2.9x in 1HFY21.  Presented below the trend of Asset Turnover Ratio.

Outlook:

Technical Commentary:

Stock Recommendation:

3. SenSen Networks Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 48.83mn)

SenSen Networks Limited (ASX: SNS) is involved in the development and sale of SenDISA platform-based products and services.

Recent Updates: The below picture provides an overview of business updates:

FY22 Highlights: The following picture showcases the performance during the quarter ended 30 June 2022:

Key Metrics: During FY22, the company recorded an asset turnover ratio of 0.60x against 0.41x of industry median. In addition, the company witnessed a decline in debt-to-equity ratio as illustrated below.

Outlook:

Technical Commentary:

Stock Recommendation:

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 14, 2022. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

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