Two Stocks Under 20 Cents Pursuing Profitability Path in the Long-term - GME, KYP

1. GME Resources Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 58.46Mn)

GME Resources Limited (ASX: GME) is a mineral exploration company that shows the exploration interest in nickel and cobalt in Western Australia.

Business Update:

Results Highlights of 1QFY23:

Key Ratios: During FY22, GME reported lower leverage as its asset-to-equity ratio during FY22 was around 1.00x lower than the industry median of 1.71x.

Outlook:

SWOT Analysis:

Technical Commentary:

Stock Recommendation:

2. Kinatico Limited (Recommendation: Speculative Buy, Market Cap: ~AUD 39.08mn)

Kinatico Limited (ASX: KYP) is a provider of know-your-people solutions comprising pre-employment screening, verification services, and workforce compliance management internationally. The company was earlier known as CV Check Limited.

Business Updates:

Results Highlights of 1QFY23:

Key Ratios:  During FY22, KYP reported higher asset turnover ratio of around 0.80x compared to industry median of 0.23x. Below pondered the trend of gross margin 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 all price data, currency, technical indicators, support, and resistance levels is 9 December 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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