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Every investor should have a diversified portfolio to mitigate the risk of the market fluctuations. The key industries where an investor can invest are communication services, industrials, consumer staples and energy, among others. Letâs have a look at 4 stocks of the above-stated industries with their recent updates.
MGM Wireless Limited (ASX:MWR)
Australia registered company, MGM Wireless Limited (ASX: MWR) is known for its product, namely SPACETALK, which is all-in-one childrenâs smartphone, watch and GPS device. This product helps parents to track their childrenâs location through a mobile app. It was officially listed on ASX in 2001. Today, on 25th July 2019, the company announced the expansion of its retail distribution business in New Zealand. The company further stated that Harvey Norman, JB Hi-Fi and Noel Leeming will be selling SPACETALK nationwide via their network of 35, 6 and 77 retail stores and online, respectively. MGM Wireless Limited along with Noel Leeming, Harvey Norman and JB Hi-Fi will join Spark New Zealand Limited to sell Childrenâs Smartwatch Phone, SPACETALK. At present, Spark New Zealand Limited sells SPACETALK via its 71 company stores and along with online.
In another update, the company via a release dated 4th July 2019 stated that MWR will drawdown a $250,000 of its current $2 million convertible note. The facility will be drawn to $1.50 million the after receipt of these additional funds.
The proceeds of the fund will be utilised to manufacture additional SPACETALK childrenâs phone plus watch, which is required for upcoming and existing distribution arrangements. Additionally, for 2019 March quarter, the company reported revenues of $1.4 million, reflecting a rise of 392% as compared to Q3 FY18. The SPACETALK unit sales for the period stood at 5,100, a whopping growth of 975% against Q3 FY18. The cash balance of the company amounted to $1.45 million as at 31st March 2019. In the 2019 March quarter, the company drew down a $500,000 of its existing $2 million convertible note funding facility in order to fund the inventory build to support the UK rollout.
The company reported a gross margin of 72.5% in 1H FY19 when compared to 93.5% in 1H FY18 and a current ratio of 2.80x in 1H FY19 against 2.91x in 1H FY18.
The stock of MGM Wireless Limited, at market close on 25th July 2019, traded at $3.450 per share, reflecting a rise of 7.812% during the dayâs trading session, with a market capitalisation of $40.05 million. The stock has generated returns of -1.84%, -13.75% and 1.59% for the period of one month, three months and six months, respectively.
Xenith IP Group Limited (ASX:XIP)
Xenith IP Group Limited (ASX:XIP) is a provider of numerous intellectual property services. The company was officially listed on ASX in 2015. Today, on 25th July 2019, the company via a release announced that the scheme of arrangement has received the approval of its shareholders. Under the terms of the scheme of arrangement, it was stated that IPH Limited will be acquiring all of the company shares, which IPH does not already own for the amalgamation of cash and scrip consideration. In addition, the shareholders of the company will be receiving Standard Consideration of $1.28 cash and 0.1261 new IPH shares for each XIP Shares that the shareholders hold on the record date for the scheme. Moreover, the consideration under the scheme of arrangement demonstrates a strong premium of around 73% to the closing price of the companyâs shares as on 26th November 2018. The following picture provides key dates for the execution of the scheme of arrangement.
The next step of the company in relation to the scheme of arrangement is the approval by the Federal Court of Australia.
In another update, the company announced that Credit Suisse Holdings Limited has changed its substantial holding in XIP, with a voting power of 13.19% as compared to the previous voting power of 12.00%. The change in substantial holding took place on 11th July 2019.
The company reported EBITDA margin and operating margin of 13.4% and 5.2% in 1H FY19, reflecting a growth of 1.6% and 0.3% on a Y-o-Y basis, respectively, and posted a net margin of 2.8%, a rise of 0.3% on a Y-o-Y basis. This implies that the company is improving its capability for converting its top line into the bottom line. The current ratio of the company stood at 2.15x in 1H FY19, up by 7.9% on a Y-o-Y basis, representing that the company is improving its position to address its short-term obligations.
The stock of Xenith IP Group Limited, at market close on 25th July 2019, was trading at $2.410 per share, reflecting a rise of 1.688% during the dayâs trading session, with a market capitalisation of $210.26 million. The stock has generated returns of 5.80%, 11.79% and 74.26% for one month, three months and six month period, respectively.
Angel Seafood Holdings Ltd (ASX:AS1)
Angel Seafood Holdings Ltd (ASX: AS1) is a manufacturer, marketer and producer of certified organic and sustainable oysters. The company was officially listed on ASX in 2018. Today, on 25th July 2019, the company updated the market that it has entered into an agreement with Mr Gregory Lawrence for acquiring 1.5 hectares of quality water in Coffin Bay for a consideration of $600,000. The 1.5 hectares of quality water consists of 1.0 hectares of highly productive to be used Central Zone for conditioning oysters for sale, and 0.5 hectares in the Kellidie Bay in order to expand grow out areas.
Turning to the terms of the agreement, the company will pay a deposit of $120,000 on the inking the agreement along with the remaining amount of $180,000 and $300,000 is payable on 18th December 2019 and 1st July 2020, respectively. In addition, the outstanding amount carries accruing interest of 6% p.a.
Consecutively, the company also entered into the agreement of sale to dispose its assets in Smoky Bay for an amount of $450,000. The company further elaborated that the asset comprises 1.3 hectares of water leases and on-land infrastructure and equipment. The funds from the sales will be utilised to finance the acquisition of additional water in Coffin Bay and to settle its debt for improving the balance sheet position.
The net cash used in the operating activities for the quarter ended 30th June 2019 stood at $0.369 million after settling major payments for product manufacturing and operating costs and staff costs of $0.412 million and $0.568 million, respectively.
The company reported a gross margin of 88.7% in 1H FY19 as compared to the industry median of 40.7% and posted a current ratio of 1.70x in 1H FY19 against the industry median of 1.42x. This implies that the company is in a sound position to address its short-term obligations when compared to the broader industry. AS1 reported an asset-to-equity ratio of 1.44x as compared to the industry median of 1.97x.
The stock of Angel Seafood Holdings Ltd was trading, at market close on 25 July 2019, at $0.220 per share, a rise of 10% during the dayâs trade, with a market capitalisation of $26.37 million. The stock has generated returns of 5.26%, 2.56% and 60.00% for the one month, three months, and six month period, respectively.
Valmec Limited (ASX:VMX)
Valmec Limited (ASX: VMX) is an Australia registered company providing project engineering equipment as well as construction and commissioning solutions for energy and resource sectors. The company was officially listed on ASX in 2005. Recently, the company via a release dated 19th June 2019 announced that it sealed a new construction contract with Newmont Goldcorp Services Pty Ltd amounting to around $6 million. The contract came into existence for the infrastructure work, which is associated with Newmont Goldcorp Services Pty Ltdâs proposed Tanami Expansion 2 Project situated in the Northern Territory. In addition, the contract marks the first step in the companyâs strategy for future growth in gas and infrastructure sectors within the Northern Territory.
Importantly, the company reported sales revenues of $47.5 million in 1H FY19 as compared to $49.8 million in 1H FY18, representing a fall of 4.6% on pcp, resulted by a delay in the commencement of construction activity throughout the companyâs energy clients.
Today, on 25th July 2019, Valmec Limited released its guidance for the FY19 results. The company projects earnings before interest, tax, depreciation and amortisation (EBITDA) to be around $8 million on total revenues of approximately $110 million in FY19. In addition, the stronger margins during FY19 are directly attributable to the growth in the Valmec Service segment Y-o-Y.
Valmec Limited entered into FY20 with an expanded order book of around $80 million driven by strong 2H FY19 tender activity throughout its Service & Energy segments, supported by a growing pipeline in energy, water and resource infrastructure opportunities across Australia. Most of the secured work is projected to be wrapped up within the next 12 months.
The stock of Valmec Limited, at market close on 25th July 2019, was trading at $0.305 per share, reflecting a rise of 12.963% during the dayâs trading session, with a market capitalisation of $33.94 million. The stock has generated returns of 22.73% for one month, 14.89% for three months and 5.88% for the period of six-month.
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