Z1P

Zip Co Ltd is a ‘buy now, pay later’ fintech service similar to Afterpay (APT). Z1P operates in the US, UK, Australia, and New Zealand, with minority stakes in payment providers in the Czech Republic, South Africa, and United Arab Emirates. The company has significant US exposure through its acquisition of ‘Quadpay’.

Z1P and APT price action shows some correlation. These stocks also react to large moves in the US tech sector.

Z1P has a market cap of $3.76 billion and an enterprise value of $5.08 billion.

‘Market capitalisation’ is the value of ordinary shares outstanding and measures the value of traded securities on the market. ‘Enterprise value’ is an economic measure reflecting the market value of the productive resources of a business, regardless of capital structure. Enterprise value equals market cap + interest bearing debt – cash balance.

Z1P has recently broken through support at the 200 Day MA. Z1P has an IV of 71.39%.

LYC

Lynas Corporation Ltd is a rare earths mining company with rights over one of the largest and highest grade deposits of rare earths in the world (Mount Weld, WA). 

Rare earths are currently produced in 7 countries – China, Russia, USA, Australia, India, Brazil and Malaysia. Rare Earths are a group of 15 elements in the periodic table known as the Lanthanide series, plus Yttrium. 

Source: Lynas Rare Earths

Rare earths have unique properties that make them useful in industrial and manufacturing processes, storage and batteries, electrical motors and magnetism, alloys, electronics, lighting plus medical applications.

As technology progresses and green energy becomes more abundant, the demand for rare earth’s unique material properties will continue to rise.

Lynas Corp has a market cap of $5.21 billion and enterprise value of $5.04 billion. 

LYC has tried to push through 50 Day MA resistance for 3 consecutive days with no luck. LYC has an IV of 59.06%.

IGO

IGO Limited’s strategy is focused on metals critical to clean energy, including nickel, copper and cobalt, which are used in the manufacture of energy storage devices such as lithium-ion batteries. IGO’s current active Ni-Cu-Co operation is in the Fraser Range in WA. IGO Limited has recently divested its stake in the Tropicana gold mine to Regis Resources (RRL) for around $903 million. 

IGO is active in exploration and discovery with Ni-Cu-Co and Cu-Au projects across WA, SA, NT and also Greenland.

IGO’s market cap is $5.68 billion and the business has an enterprise value of $4.47 billion. IGO has an EBITDA multiple of 11.15.

IGO is currently trading around decade highs. IGO has an IV of 36.99%.

Source: IGO

MIN

Mineral Resources Ltd core business is in mining services across WA providing pit-to-port solutions to improve operational efficiency. They also operate a ‘build, own, operate’ model where MIN provides the capital infrastructure and operational expertise to get mining projects off the ground. MIN has invested in a range of commodities projects across the Pilbara and Yilgarn regions of WA (including lithium projects), providing a 30-50 year pipeline of work to their mining services business. MIN is a top 5 lithium miner with joint ownership of the largest hard rock lithium deposit, and is Australia’s 5th largest iron ore producer. Mineral Resources has also acquired gas exploration and production assets in the Perth basin. 

Mineral Resources has a market cap of $8.88 billion and an enterprise value of $9.21 billion, and has an 8.64 EBITDA multiple.

MIN has been on a strong bull run since March 2021 and is trading at 3.5x it’s recent trough during the COVID pullback. MIN has an IV of 37.18%.

Source: Mineral Resources

EVN

Evolution Mining Ltd is an Australian gold miner with current operations across NSW, QLD, WA and also Ontario, Canada. They aim to hold a portfolio of 6 to 8 assets with an average mine life of at least 10 years and are open to all quality gold, silver and copper-gold value accretive investments. This strategy helps the business maintain their sector leading group EBITDA margin of 52%. 

Evolution Mining has a market cap of $8.51 billion and an enterprise value of $8.74 billion. It’s EBITDA multiple is 8.2. 

EVN has been testing it’s 200 day MA after gapping higher during the past week. EVN has an IV of 40.39%.

TPG

TPG Telecom Limited merged with Vodafone in July 2020 via a scheme of arrangement, and previously acquired iiNet and AAPT. The company is a merged mobile and broadband company that aims to move the retail clients from it’s various acquisitions onto it’s own telecommunication infrastructure. The business is accelerating their rollout of the 5G network with a target to cover 85% of the population in the top six cities by the end of 2021. The business operates it’s contact centres out of Mumbai, Pune, Manila and Cape Town to keep costs down in the competitive telecommunications market. 

TPG has a market cap of $9.69 billion and an enterprise value of $14.82 billion. TPG has a 14.16 EBITDA multiple. 

TPG’s share price has had a rough year since the merger with Vodafone Hutchison and has had a strong bearing bias since the 26th of March 2021. TPG has an IV of 38.29%.

Source: tpg.com.au

NST

Northern Star Resources Ltd is a gold miner with operations across Western Australia and Alaska in the USA. The business aims to improve mine lives to greater than 10 years through aggressive in-mine and near-mine exploration, and implementation of exploration technology and innovation. They currently operate with costs below $1340/oz .

Their 5 operating segments are:

1. Kalgoorlie Operations, WA Australia – Mining and processing of gold
2. Yandal Operations, WA Australia – Mining and processing of gold
3. Pogo, Alaska USA – Mining and processing of gold
4. KCGM Joint Venture (50%), WA Australia – Mining and processing of gold
5. Exploration – Exploration and evaluation of gold mineralisation

NST has a market cap of $12.57 billion and an enterprise value of $8.26 billion. It’s EBITDA multiple is currently 9.29.

NST is currently trading between its 50 day and 200 day MA’s after bouncing off a major support level. NST has an IV of 47.12%.

BPT

Beach Energy Ltd is an oil and gas exploration company with operations across VIC, WA, SA, and NZ. BPT is a key supplier to the Australian east coast gas market, and the largest onshore oil producer in Australia. The business has operations in the Browse, Carnarvon, Perth, Bonaparte, Copper, Otway, and Bass basins in Australia plus the Taranaki and Cantebury basins in New Zealand.

BPT has a market cap of $2.86 billion and an enterprise value of $2.99 billion.

BPT was trading around the 50 day and 200 day MA’s since the 25th of January 2021, until the stock price gapped below it’s 200 day MA support on the 30th of April. BPT has an IV of 60.3%.

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Past performance is not a reliable indicator of future performance. 

The opinions expressed in this article are our personal views. 

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Sources:

• Lynas Rare Earths
• TPG Telecom Limited: Full-Year Financial Results for the year ended 31 December 2020
• IGO 3Q21 Results presentation
• Evolution Mining: 2021 HALF YEAR FINANCIAL RESULTS
• Mineral Resources
• Macquarie Conference, Australia 2021