Two Diversified Stocks Under 20 Cents Report to Benefit from Robust Order Book Growth -AJL, CLT

1. AJ Lucas Group Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 48.15mn)

AJ Lucas Group Limited (ASX: AJL) is a specialist service provider to the energy, mining, and infrastructure sector companies.

Material Business Updates:

Results Highlights of FY22:

Key Ratios: During FY22, AJL recorded a higher gross margin of 16.6% as compared to the industry median of 12.5%. Below plotted the trend of asset turnover ratio since FY18.

Outlook:

SWOT Analysis:

Technical Commentary:

Stock Recommendation:

2. Cellnet Group Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 7.06mn)

Cellnet Group Limited (ASX: CLT) is into distribution of lifestyle technology products that also includes mobile phone, gaming, tablet and accessories sold through retail and online channels.

Business Updates:

Results Highlights of FY22:

Key Ratios:  During FY22, CLT reported asset turnover ratio of 1.64x in FY22 as compared to industry median of 0.74x. Below pondered the trend of debt-to-equity ratio since FY18.

Outlook:

SWOT Analysis:

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 neither an indicator nor a guarantee of future performance.

Note 2: The reference date for AJL for all price data, currency, technical indicators, support, and resistance levels is 25 November 2022. And the reference date for CLT is 24 November 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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