Two Stocks Under 20 Cents Continued to Focus on Growth Prospects – VRX and ICI

1. VRX Silica Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 56.04mn)

VRX Silica Limited (ASX: VRX) is engaged in the exploration and development of mineral properties. It is involved in the exploration of gold in West Africa with one additional project for gold in Australia.

Business Update:

Results Highlights of 1HFY23:

Key Ratios: During 1HFY23, VRX reported a higher current ratio of 4.25x compared to industry median of 2.06x.  

Outlook:

SWOT Analysis:

Technical Commentary:

Stock Recommendation:

The stock has witnessed a decline of ~4.76% in 1 month and over the last 3 months, it has decreased by ~25.93%. The stock has a 52-week low and 52-week high of AUD 0.098 and AUD 0.225, respectively, and is currently trading below the average of 52-week high-low average.

2. iCandy Interactive Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 74mn)

iCandy Interactive Limited (ASX: ICI) is an Australia-based videogame company engaged in the development and publishing of mobile games and digital entertainment for a global audience.

Business Updates:

Results Highlights of FY22:

Key Ratio:  During FY22, the company reported EBITDA margin of 14.7% in FY22 as compared to 12.3% of industry median.

Outlook:

SWOT Analysis:

Technical Commentary:

Stock Recommendation:

The stock has witnessed a gain of ~2.17% in a month and over the last 3 months, it has increased by ~9.99%. The stock has a 52-week low and 52-week high of AUD 0.042 and AUD 0.145, respectively and is currently trading below the average of 52-week high-low average.

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.

Disclosure: VRX Silica Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 24 March 2023. 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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