$69 postpage LB

Stocks to watch for in December 2020

  • December 02, 2020 08:50 PM AEDT
  • Team Kalkine
Stocks to watch for in December 2020

Summary

  • The near-festive season and recent relaxation in restrictions are having a positive effect on consumer sentiments.
  • Woolworth’s 1Q2021 report indicates a significant increase in e-commerce sales.
  • Recce Pharmaceutical’s RECCE® 327 against SARS-CoV-2 virus demonstrated encouraging efficacy in an in-vitro screening assay and is now progressing to Stage 1b.
  • ASICS, in its BNPL review, has flagged regulatory changes expected to come into effect in October 2021.
Gold MTF non-AMP

Australia’s coronavirus success has come just in time, fuelling optimism and preparing Aussies to get in the spirit of Christmas. One of toughest 28-days lockdown in Victoria has panned out exceptionally well, while NSW is also en-route recovery. The striking success when the vaccine is around the corner puts the nation in a sweet spot to relish the delicacies offered by this Australian summer. 

The credit card data from the NAB indicates that Melbournians are already hitting the stores after easing of restrictions, which is expected to end months-long dry spell for the retailers. Meanwhile, people’s excitement around this year’s Black Friday Sales could be a litmus test of rising consumer sentiments. Australia’s Commonwealth Bank is anticipating biggest spending spree at Black Friday and Cyber Monday. 

The scenario around the crowded Australian beaches was no different from that of online shopping portals as the warm weather approaches the country. COVID-19 safety measures across the beaches, however, remain a significant concern for the authorities as they fear a spike in cases, earlier witnessed across the US and Europe. 

Amidst the current hustle and bustle, S&P/ASX 200 edged up by 9% in the past one month. Let us look at a few stocks that are under the spotlight. 

ALSO READ: Latest Updates on ASX-listed healthcare players developing COVID-19 treatment

Woolworths Group 

As per the latest statistics released by the Australian Bureau of Statistics (ABS), retailing trade in Australia including store and online sales saw a seasonally adjusted fall of 1.1% in September 2020. However, in terms of volume, Australia’s seasonally adjusted turnover rose by 6.5% in the September 2020 quarter. 

READ MORE: Australia retail sales shoot up by record 6.5% in September quarter

At the same time, Australian mega-retailer Woolworths Group Limited (ASX: WOW) continued to exhibit strong trading momentum in Q12020 for the 14 weeks to 4 October 2020. The Group is focussed on a COVID-Safe Christmas. 

While the group sales were up by 12.3% to $17.9 billion over the pcp, e-commerce sales rose by a whopping 86.7% during the period. E-commerce sales penetration in the quarter rose to 8% from 6.3% in the previous quarter. Stringent lockdown measures contributed to over 20% sales growth in Victoria, while the Australian Food total sales (ex-Victoria) increased by 10.6%.

WOW closed at $37.840 on 2 December 2020. 

Recce Pharmaceutical

An Australian biotechnology company, Recce Pharmaceutical Limited (ASX: RCE) is focused on addressing the urgent global health issues concerned with antibiotic-resistant superbugs as well as emerging viral pathogens. The company is testing a synthetic anti-infective, RECCE® 327, against SARS-CoV-2 virus. Having demonstrated encouraging efficacy in an in-vitro screening assay, it is now advancing to Stage 1b.

Patent Family 3 titled ‘Anti-virus Agent and Method for Treatment of Viral Infection’ was granted by the Japan Patent Office, allowing advancement of monopolies related to marketing and manufacturing to February 2037.

The granted claims relate to RECCE® 327 (R327) as well as new anti-viral formulation RECCE® 529 (R529), which are effective in treating viruses that have a lipid envelope or coat, like SARS-CoV-2 and coronaviruses, HIV, influenza viruses, hepatitis, etc.

RCE stock closed at $1.170 on 2 December 2020. 

ALSO READ: Now AstraZeneca-Oxford University COVID-19 Vaccine Shows High Efficacy

Afterpay 

ASICS review on buy-now-pay-later has indicated significant growth in the industry, with the total amount of credit extended almost doubling from $16.8 million in the 2017-18 financial year to $32million in the financial year 2018-19. 

Amidst the significant shift from traditional forms of payment, Australian BNPL giant Afterpay Limited (ASX: APT) commands 73% of the total value of BNPL transactions. ASICS, in its review, has also flagged regulatory changes that are expected to come into effect in October 2021. 

The business update of the company ended 30 September 2020 indicated strong performance during the quarter (Q1 FY21). While the underlying sales were up by 115% from Q1 FY20, it has marked an uptick of 9% from the previous Q4 FY20. Globally active consumers of Afterpay in Q1FY21 nearly doubled compared to the previous corresponding period (pcp). 

The Company in October entered into a Collaboration Agreement with Westpac Group. It would facilitate the rollout of Afterpay savings accounts as well as cash flow tools for Australian customers. 

APT stock closed at $98.560 on 2 December 2020. 

Evolution Mining 

Australian gold producer, Evolution Mining Limited (ASX: EVN) continues to deliver significant organic growth pipeline undertaking noteworthy developments at its Red Lake and Cowal projects. Red Lake transformation plan is making good progress and is focused on restoring the operation’s production to more than 200,000 ounces annually. 

At Cowal, Stage 1 Integrated Waste Landform has been completed, with the first deposition achieved in October this year. Meanwhile, the company has also submitted a mine development application for regulatory approval. 

Gold production has shown an impressive record with an increase of 71% in the past five years. Meanwhile, FCF/oz rose by 422%. The company is targeting 730 koz gold in 2020 at an All-In Sustaining Cost (AISC) of US$940. It is expected to place the company in a strong position against the fluctuations in the gold price. 

EVN stock closed at $5.180 on 2 December 2020. 

ALSO READ: Gold Prices Tepid, what is ailing the precious metal bulls?

Bottomline

The stirring month of November 2020 could be the field test of what the next month has in store. From the looming launch of COVID-19 vaccines to relaxations in travel, Christmas and New Year’s Eve, December has in store an arsenal of events that could mark a tipping point for an economy battered by COVID-19. However, given the previous COVID-19 waves in Europe and the US, nothing is conclusive when it comes to coronavirus. Nevertheless, the gradual recovery without new cases can pave the way for brighter days ahead.

Disclaimer: All financial figures in Australian Dollar unless stated.

 

 


Disclaimer
The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK