Punting on the stock market can sometimes be a little confusing.
And when part of your job is to keep an eye on the ASX and write a 1200-word column on which companies saw their share prices hike during the past week, it can also become weird.
Holding stock in a company with a price of just 0.1c per share – which means you can buy 50 shares for just 5c if someone was willing to make such a dubious deal – doesn’t sound like a whole lot of investment.
However, if you own several million shares based on that low, low price and the value of the said share suddenly doubles, well that then sounds like a solid investment – even if it turns out you only made a couple of thousand dollars and you still need to sell them to someone to see any actual value.
But for the company that just saw its share price increase by 100 per cent, it can be a whole different story – which is what we have seen during the past five days, with three of this edition’s four runners of the week adding twice the value to its stocks.
That strange reality also makes it difficult to decide which ASX-listed company to discuss first, so let’s go with alphabetic order so nobody gets upset.
First cab off the rank is Avira Resources (the letter A comes first so it gets top billing). Its share price doubled from 0.1c to 0.2c off the back of releasing its December quarterly report.
Did the company make a heap of money to justify this 100 per cent share price lift? No. It’s an exploration company, so as per usual, drilling expenditure and operating costs took a chunk out of its back pocket.
However, during December, Avira rebooted phase-two diamond drilling at its Puolalaki nickel-copper-cobalt-gold project in Sweden’s premier Gällivare mining district, which is host to Europe’s biggest open-cut copper mine, Aitik.
According to the three-month report, the company hit massive sulphide mineralisation at a shallow depth in three of the four holes sunk as part of its latest campaign. While the latest results are only visual in nature and assays are still pending with results expected this month, the drilling occurred in an area that previously delivered a 36m section grading 0.63 per cent nickel, 0.57 per cent copper and 952 parts per million cobalt from just 16.7m.
Management says 3D modelling of the mineralisation intercepted to date has begun and will continue for the next few months as the company gains more data and assay results.
Avira’s price hike came off relatively low trade movement, with only some 500,000 shares changing hands. But the fact of the matter is that its price did double and it will be interesting to see if the assays at Puolalaki match the excitement shown at the visual results.
The second of this week’s “penny dreadfuls”, a term this columnist recently discovered in reference to low-priced stocks with the potential to experience significant jumps based on one good announcement, goes to DiscovEx Resources – second only because of the D at the start of its name and the importance of ranking things by letters.
However, the D certainly does not stand for dreadful in this case as the company jumped 100 per cent from 0.1c to 0.2c this week after its maiden drill program at its Sylvania project near Newman in Western Australia’s Pilbara region hit positive banded-iron mineralisation at some pretty decent widths.
The longest intercept was 88m going 34.5 per cent iron from 84m depth in the first hole. That intercept followed 8m going 44.1 per cent iron from 2m, while the second hole encountered 80m at 33.5 per cent from 26m.
The third hole intercepted 38m running a grade of 36.5 per cent iron from 22m including 6m at the program’s best grade of 48.2 per cent from 34m, and 60m at 34.5 per cent from 82m including 2m going 43 per cent from 116m.
The drill campaign was completed by Rio Tinto Exploration under the terms of DiscovEx’s Sylvania iron ore option agreement with the company that is set to expire in August, unless it is renewed for up to a further four years by a payment of $40,000 per year to DiscovEx. If Rio exercises its option, it must pay DiscovEx a $1.05 million fee, in addition to royalties of 0.4 and 1 per cent, according to the relevant tenement.
With iron ore prices currently sitting at about US$130 (AU$197)_per tonne, DiscovEx could have timed its deal with Rio perfectly after investment bank Citi tipped the price to hike towards US$150 (AU$227) per tonne this year. And for those who invested in the company at 0.1c per share, it is a gamble that may well pay off.
Our third runner this week is Volt Power Group which – surprise, surprise – surged 100 per cent to touch 0.2c after a previous close of just 0.1c.
This price hike also appears to be based on its December quarterly report that showed the company recorded full-year revenue receipts of a cool $4.38 million and closed out the calendar year with a surplus annual operating cashflow of $1.49 million.
If only Volt decided to name itself “Atomic” Power Group, it would have been our No.1 contender this week based on the indisputable letters rating system this column fastidiously employs.
According to its latest report, Volt made significant investments in its EcoQuip mobile solar light tower (MSLT) technology platform and MSLT fleet expansion last year totalling $1.18 million and $1.49 million, respectively. The technology uses a high-efficiency solar lithium battery energy storage system (BESS), power management electronics and software capable of autonomous operation and up to 40 per cent enhanced energy efficiency, compared to similar industry standards.
Volt describes itself as an industrial technology company that develops and commercialises ESG-focused, zero-emission power generation and hydrogen production technologies and next-generation mining equipment.
So, from the outside looking in, the company appears to be a socially and environmentally-conscious business aiming to benefit in the lucrative mining and resources sector by developing a range of products, while also making money. No wonder its shares doubled.
This week’s final runner goes to Singular Health Group, which recorded a share price jump of more than 86 per cent. Its stock lifted from a previous close of 9.4c to 17.5c, which takes it out of the running of finishing up among our group of penny dreadfuls.
Sorry Singular, your share price is now too high to join that illustrious company.
But anyway, back to the medtech company’s jump. It soared off the back of revealing the receipt of a binding purchase order for its patented 3Dicom technology from Las Vegas-based Roseman University in Nevada.
The 3Dicom device allows practitioners such as dentists, surgeons and radiologists to convert conventional 2D MRI, CT and PET scans into immersive 3D images. The change provides a clearer insight into a patient’s medical problems and enables better surgical planning.
Management says Roseman is the first US college to adopt Singular’s 3Dicom Research and Development (R&D) software as a medical education tool in a market forecast to be worth US$17.6 billion (AU$26.8 billion) by 2027.
Punters appeared impressed with Singular’s latest announcement, with nearly 7 million shares changing hands yesterday before the ASX closed – a figure that dwarfed its previous record of 3.6 million during the past year.
So ,what can we learn about investing from looking logically at this week’s list of runners? Not a whole lot, to be honest.
Two of this week’s prime movers lifted on the back of quarterly reports, which – legally – all ASX-listed companies must provide. And while the reports were positive, there was not a whole lot that separated them from the rest of the pack.
Like the millions of Australians that bought tickets in Thursday night’s massive $200 million Powerball jackpot, sometimes market players just want to have a punt.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
