It’s been a volatile old week in markets, despite the United States Federal Reserve sticking to the script and holding rates steady. The US economy is slowing down, people are spending more carefully and the way the economy is growing is changing.
At first glance the US economy seems fine. Total GDP grew by 3 per cent last quarter and inflation is slowing. But dig deeper and things aren't quite as rosy. The growth looks better than it is because imports dropped a lot, businesses aren't investing as much as they were and consumers are spending far less than before. Overall, it’s not the kind of strong, steady growth that keeps an economy humming.
Of course, when the US sneezes, Australia catches a cold. And so, Aussie tech, healthcare and financial stock was copping it to end the week and Dr Copper looked like it had caught the plague.
The red metal, which was pushing new all-time highs last week, dropped nearly 25 per cent this week. Trump’s planned 50 per cent tariff on all things copper left refined copper untouched, meaning only finished products such as pipes, wires and electrical components would suffer the import tax.
Most of the ASX’s materials managed to avoid the market’s ire, thanks to Trump’s decision to hold Australia’s 10 per cent base tariff, thanks to news we would lift historic US beef restrictions.
This week’s biggest loser on the market was uranium miner Boss Energy, which was one of the most shorted stock on the ASX. The company shed 50 per cent of its value, some $700 million, this week after the miner warned it was unlikely to hit production targets at its flagship Honeymoon mine in South Australia.
The news came after managing director Duncan Craib announced he would be stepping down and almost a year to the day after the company announced Craib and two other board members had offloaded $26 million of their own holdings on market, at about $5.60 per share. That looks like a very good trade by the men in charge, with the stock now trading at $1.70, less than a third of the price that the intuitive leaders sold at. Well done to the short sellers and the board members, I guess.
Quarterly reporting season brought with it the usual groans of overly optimistic shareholders, often let down by the realities of reporting and their holdings’ dwindling bank balances.
Efficiency and cost reduction initiatives were a theme of many of our Runners.
The worst offenders on the week were Atlassian’s omnipotent billionaires Mike Cannon-Brookes and Scott Farquhar this morning, championing AI efficiency to progress its customer service department. Nothing says progress like swinging the axe on 150 employees to replace them with faux company reps. Their pre-recorded video must’ve been a real heart warmer for those poor souls being shown the door.
A few outperforming darlings can light up the dark and dominated this week’s Runners list. This week with our Runner of the Week top spot was taken by a beleaguered health foods minnow, which looks to have turned the corner financially this reporting season as its share price decided to pick itself up off the canvas.
OLIVER’S REAL FOOD LIMITED (ASX: OLI)
Up 200% (0.5c – 1.5c)
Bulls N’ Bears’ Runner of the Week is health fast-food chain Oliver’s Real Food, which burst out of the gate after dropping a quarterly report that had investors licking their chops.
The company runs quick-service restaurants along Australia’s eastern seaboard highways, offering healthy organic alternatives to your beloved pies and choccy milk.
It posted a tidy EBITDA of $356,000 for the quarter, in stark contrast to last quarter’s $247,000 loss. This better result was driven by a 13.9 per cent or $645,000 cut in expenses, including a 20 per cent drop in employment costs achieved through efficiency and cost-reduction initiatives.
Oliver’s reported a 5.97 per cent revenue dip to $5.768 million - due to two store closures - helped restructuring efforts to quickly bear its fruits.
The market devoured the news, with shares soaring 200 per cent to a high of 1.5 cents a share from last week’s 0.5c close on $130,000 in stock traded.
It’s been a bit of a slog for long-term shareholders, with the stock down over the past 1.5 years, but Oliver’s forecast further improvements as its cost-cutting kicks in. As the world’s first certified organic fast-food chain, this plucky minnow could be carving out a niche in a health-conscious market, with its highway eateries poised to fuel a share price revival.
Black Dragon Gold’s Salave gold project in Austurias, Spain, where it is progressing towards development of its high-grade 1.6-million-ounce resource. Credit: File.
BLACK DRAGON GOLD LTD (ASX: BDG)
Up 109% (4.3c – 9c)
Second on the Runners list this week is gold development hopeful Black Dragon Gold, which roared back to life this week after it revealed progress on its Salave project in Spain was gaining momentum.
A December 2024 legislative change paved the way for the project’s strategic investment designation, with a community consultation now showing that 63 per cent of locals support it as a genuine job-creating development.
The company’s March scoping study update for the high-grade Salave forecast a massive $806 million after-tax net present value and 34 per cent internal rate of return for the project at a conservative US$2106 per ounce gold price.
Salave, one of Europe’s largest undeveloped gold projects, has 11.33-million-tonne mineral resource estimate grading a whopping 4.19 grams per tonne (g/t) gold for 1.56 million ounces of gold.
The scoping study projects that it could produce 99,462 ounces of gold per year, putting it on par with some of Australia’s larger operations, but at a significantly higher grade.
Black Dragon is eyeing a 14-year underground mine life, with pre-feasibility studies planned for later this year and exploration drilling to extend its resources at depth and along strike.
The company’s share price surged 109 per cent on the week to 9c from 4.3c per share last Friday, with punters betting on Salave’s robust economics and low operating costs to kick off in a record gold price environment.
With potential financiers circling and the local provincial government warming to the project’s economic benefits, Black Dragon’s high-grade bounty could spark a golden run in Europe’s mining landscape, turning this junior into a serious contender.
Up 84% (7.9c – 14.5c)
Snagging the third Bulls N’ Bears Runners spot this week is communications aficionado BSA Limited, which pulled itself off the canvas with a quarterly report that had investors buzzing like a freshly installed 5G tower.
The company posted a 7 per cent revenue increase to $286.8 million for the financial year and a whopping 42 per cent jump in EBITDA to $30.9 million, again driven by operational efficiencies.
BSA designs, builds and maintains telecom networks for clients such as the NBN Co, Foxtel and Telstra and has shown plenty of financial resilience despite losing its NBN field services contract in February.
That NBN snub tanked the company’s share price about 85 per cent, but BSA’s focus on profitability and its remaining contracts in smart metering and electric vehicle charging solutions fuelled a comeback.
This week, the share price shot back nearly 85 per cent to 14.5c from last week’s close of 7.9c with $2.5 million in stock traded.
The company says it is managing an orderly demobilisation of its NBN contract, set to end September, while leveraging its 25-year track record to pivot to new opportunities.
With a strong client base and a knack for technical services, BSA’s rebound could be the start of a new chapter. If it navigates the post-NBN landscape and capitalises on EV and smart energy trends, this communications stalwart might just keep climbing the ASX charts.
BEFOREPAY GROUP LTD (ASX: B4P)
Up 45% ($1.64 – $2.37)
Snagging the final runners spot is pay-on-demand lender Beforepay Group, after it, surprise!, revealed its quarterly report on Tuesday, highlighting a 76 per cent increase in net profit before tax to $2.4 million on the previous corresponding period.
The gains were fuelled by $210.1 million in quarterly advances, up 18 per cent), with 539,000 advances at an average $390 per clip.
A sharper credit model slashed net defaults to 0.56 per cent from 1.24 per cent, boosting confidence in its AI-powered lending platforms abilities (watch out employees).
Beforepay’s dual business strategy offers short-term, low-cost loans via its app, while it is developing an AI loan decisioning systems for multiple purposes.
The company, set up in 2019 to disrupt predatory lending, provides loans of up to $2000 with a fixed 5 per cent fee and no hidden costs, alongside budgeting tools for cash-strapped Aussies.
Its share price rocketed 45 per cent on the news to $2.37 per share from a $1.64 close last week, cracking a $100 million valuation for the first time.
With a $40.3 million equity balance and $19.2 million in cash, Beforepay’s stock is up a massive 465 per cent from its January 2024 lows of 38c share, a far cry from its rocky 2022 IPO. The company’s US based AI arm is eyeing expansion, meaning this fintech firecracker could beon track to redefine ethical lending while cracking the US big leagues.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
