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In this article, we would discuss two small cap stocks; CXZ and CZR making strides on the ASX. These stocks have been giving stellar performance in their respective businesses. Letâs look at why these stocks boosted the investor sentiments on 26 July 2019.
Connexion Telematics Ltd (ASX: CXZ)
Connexion Telematics Ltd is a company involved in software and service industry under the sector Information Technology. The company intends to overhaul the smart car technology for the automotive industry, and it has developed two SaaS products powered by technology for the automotive industry.
On 26 July 2019, the company announced the update for the cash flows and quarterly activities for the period ended 30 June 2019 (Q4 FY19). Accordingly, the implementation of the Courtesy Transportation Program (CTP) and Cadillac Courtesy Transportation Alternative (CTA) Program was completed during the quarter. Also, the dealer orientation issues and commissioning has reduced, and the program is underway in a steady state with reduced support enquiries.
Products & Services (Source: Companyâs AGM Presentation, November 2018)
Besides, the vehicle subscriptions through General Motors (GM) dealerships peaked at 70,462 for the OnTRAC platform; this also depicted an average vehicle subscription rate of 71,423 per month for the quarter. Further, a steady growth was achieved in the Commercial Link (CL) subscription base at 4,981. Moreover, CL and OnTRAC collectively had 75,898 revenue generating subscriptions for the month of June.
Reportedly, the financial performance continues to strengthen superseding the movement achieved in the previous quarter. Also, the company continues to achieve profitability and positive cashflows with increasing revenues from $1.3 million in prior quarter to $1.6 million for Q4 FY19. Besides, the total revenue was $1.7 million, with $0.1 million from OnTRAC modification requests. The company anticipates the subscription based revenues at a monthly-rate in the range of $550,000 to $600,000 orders/month along with strong operating margins.
Cash Position
As per the release, the companyâs cash position was $939k as on 30 June 2019, up from $191k for the March quarter. Also, the company recorded an unaudited net profit before tax of $448k for the quarter, and it also repaid $150k in borrowings, which makes the company debt free. Besides, the cash receipts from customers for the period was $1.5 million, which was $336k in the prior quarter.
Outlook
Reportedly, the company intends to continue developing its flagship OnTRAC B2B fleet management system within the GM dealership network. Also, it is actively pursuing opportunities for growth within the existing GM dealership network, and actively evaluating the external application to other OEM vehicle dealerships in the US and Australia.
In order to optimise the value of telematics access and software initiatives, the company has been conducting a strategic review of the business model. Besides, the company also intends to appoint an executive to propel the growth for the next phase of development backed by solid financial and operating aspects of the company.
On 26 July 2019, CXZâs stock last traded at A$0.021, surging up by 75% from the previous close. The market capitalisation of the stock stands at approximately A$10.2 million, with ~850.17 million shares outstanding. Also, the stock over the past six months and one month has generated returns of +9.09% and -7.69%, respectively.
Coziron Resources Limited (ASX: CZR)
Coziron Resources Limited is from the Metals & Mining sector, that operates three projects in the Western Australia region and owns 85% interest in those three projects. The tenements held by the company are explored for iron-ore, magnesium, gold, copper, base-metals, vanadium and uranium.
On 25 July 2019, Coziron Resources reported an update on the exploration at the Croydon Top Camp gold project (E47/2150) in the Pilbara. Accordingly, the company has focused on the potential of the pre-Fortescue Group rocks, which are at the basement of Pilbara to host lode-style and related gold deposits. Also, the focus at the Top Camp has been driven by the historical data lodged by various miners at the Geological Survey of Western Australia.
Top Camp Prospect
As per the release, Corizon has received a total of 11 notifications regarding the 40E prospecting permits. Also, the permit allows prospectors for small-scale exploration for gold on the surface using tools like panning, dry-blowing or metal detecting. Besides, any amount of gold recovered from the area should be reported to the WA Department of Mines, Industry Regulation and Safety along with a copy of report supplied to the underlying holder of the exploration license; this is a condition for the issue of permits.
Reportedly, the company received a detailed report from the prospector who recovered 203 gold nuggets weighing 0.04 to 2.14g, a total of 73.3g from the Top Camp area. Also, the details from a prospector in 2018 found gold nuggets weighing 53.4g from the same region.
Revised Geological Setting
As per the release, the western portion of E47/2150 covers portion that was deposited in the NNE-trending. Also, De Grey Mining Ltd (ASX: DEG) has been actively exploring and reporting results for the parts of Mallina Basin to the NE of E47/2150. Besides, E47/2150 has a prospective evidence along with the escalating amount of nuggety gold recoveries by prospectors from the Top Camp and adjacent prospects.
Croydon Gold Project (Source: Company Presentation, June 2019)
Further, the peaks in the gold and related pathfinder element anomalism map regions, hosts the major fault disrupt carbonate-rich rocks within the Top Camp area of E47/2150. Also, in West Africa, the setting of geochemical signature of the large Sadiola Hill gold deposit provides an analogy and style of mineralisation in the Top Camp area.
Reportedly, the RC drilling programme proposed for the Top Camp prospect would collect the sample from the wide areas of gold anomalism discovered by surface sampling to obtain material from the veins and nearby host rocks. Also, the surface sampling and mapping would be prioritised for the Middle Valley area, where the prospectors suggest that gold is being liberated from the veins along major faults visible in the aerial imagery.
On 26 July 2019, CZRâs stock last traded at A$0.017, moving up by 13.333% from the previous close. The market capitalisation of the stock stands at approximately A$26.78 million, with ~1.79 billion shares outstanding. The stock, over the past one month, has given a return of +50% and its YTD return stands at 7.14%.
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