4 Stocks That Have Been Under The Lens By Short Sellers – MND, BAL, SYR, ECX

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Selling the shares, you don’t own, and rather have borrowed from existing shareholders with an intent to make money, is termed as short selling. Short selling is sometimes essential for the proper functioning of the stock market as with the ability to short sell, it makes it possible to trade various other instruments like futures, options, CFDs, hybrid instruments and convertible bonds. Here are few of the stocks which are under the lens of short sellers lately.

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MONADELPHOUS GROUP LIMITED (ASX: MND) – The stock has seen a stupendous increase in the sales revenue which is up by 41% at $1.784 billion. The net profit after tax was up 24% to be at $71.5 million which led the earning per share to rise by 24% to 76.1 cents. The company hence closed the full year dividend to be at 62cps fully franked. The company has a strong balance sheet with cash as at the end of financial year to be at $208.8 million. The above results were driven by growth from diversification in overseas and infrastructure markets and by strong demand for Monadelphous’ services in Australia. The stock has undergone a performance change of -2.98% over the past 1 year and is trading at a market price of $14.790.

BELLAMY’S AUSTRALIA LIMITED (ASX: BAL) – Full year results posting 37% increase in sales and 65% growth in normalized EBITDA, was recently announced by the company, for the period ended 30 June 2018. Compared to $0.8 million net loss reported last year, despite tough market conditions, the company reached $42.8 million of net profit after tax. Bellamy’s efforts to maintain strong growth continues with sales increasing up to 37% and segment EBITDA increasing up to 65% to $78.12 million. The company has $88 million cash in hand with no debt and has also made $39 million in FY 2018 supply-chain investments. The company’s gross margin improved by 5.8% in 2H 2018. The stock has undergone a performance change of 31.98% over the past 1 year and is trading at a market price of $9.580. 

SYRAH RESOURCES LIMITED (ASX: SYR) – The loss for the interim financial period ending June 30, 2018 amounted to be $8.3 million. As at June 30, 2018, total assets of the consolidated entity were $413.7 million. As at June 30, 2018, cash and cash equivalents were at $56.7 million with working capital of $48.5 million. The company has successfully completed the institutional placement of 42.2 million new fully paid ordinary shares to raise approximately A$94 million. The proceeds from this placement are reported to be utilized in the ramp-up of Balama Graphite operations which contains a significant Vanadium Resource. Balama is reported to be on track to achieve CY2018 production guidance of 135kt to 145kt, enabled by significant month on month production performance improvement. The stock has undergone a performance change of 0.444% over the past 1 year and is trading at a market price of $2.260.

ECLIPX GROUP LIMITED (ASX: ECX) – In the 1H 2018, the company had free cash flow generation of $35.2 million. For the first half of the financial year 2018, the company has reported an increase of 39% over the corresponding period in the net operating income Affected by the slow online auction activity and online brand GraysOnline the company stated that NPATA for the full year 2018 would range between 13% to 17%, which is a cut from the previous forecast of between 27% and 30%. However, the company declared the fully franked interim dividend of 8c per share which is a growth of 7% over the PCP. The stock has undergone a performance change of -28.92% over the past 1 year and is trading at a market price of $2.555. The company also forecasted the cash EPS growth of 10%-12% for FY 18 as against the PCP.

Table: P/B ratio comparison

Serial NumberCompany DescriptionTickerP/B RatioIndustry Median
1MONADELPHOUS GROUP LIMITED(ASX: MND)     3.41  2.36
2BELLAMY’S AUSTRALIA LIMITED(ASX: BAL)     5.32  2.04
3SYRAH RESOURCES LIMITED(ASX: SYR)     1.23  1.87
4ECLIPX GROUP LIMITED(ASX: ECX)     0.93  3.67

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The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

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Kunal Sawhney
Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of Technology, Sydney. He has an extensive expertise in quantitative and qualitative stock selection practices, and he proficiently navigates on equity related matters while enabling them achieve success in complex market conditions. Kunal features as a guest speaker at various equity research platforms and news channels on a regular basis, sharing his valuable insights on the subject. His firm provides holistic view of stock investment recommendations to retail investors with respect to financial performance, strategy, and industry catalysts. The firm looks for stocks that are out of favour with the market and a combination of tangible and intangible aspects is used for stock picking with a great focus on income and growth portfolios. Kunal is featured regularly on Sky Business, CNBC and Australian Financial Review

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