RED
RED 5 Limited (RED) - LONG Red 5 Limited, together with its subsidiaries, engages in the exploration, production, and mining of gold deposits and mineral properties in the Philippines and Australia. The company holds interests in the Siana Gold project located in the Island of Mindanao, the Philippines; King of the Hills Gold project located in the Eastern Goldfields of Western Australia; and Darlot Gold mine situated in the north-east of Perth in Western Australia.
Technicals:
Red is another one like NCZ which has huge upside potential, this is a long term trade for me. Nice bounce on the weekly TL, ascending triangle formation and TL holding steady. Great setup with a nice RRR. 50% & 61.8% & 200 EMA providing strong levels of support. Conservative traders could wait for BO.
Disclosure: holding from 0.25.
Fundamentals:
RED's earnings growth (97.1% per year) is above the savings rate (2%) whilst also growing faster than that of the Australian market. The earnings are expected to grow quite significantly over the next 3 years. It’s revenue (35% per year) is aswell growing faster than that of the Australian market. Their Return on Equity is also favorably high and growing.
In relation to debt, RED’s short term assets (A$164.2M) exceeds its long term liabilities (A$50.9M) with their debt to equity ratio sitting at only 6%, - considered satisfactory. The debt is well covered by their operating cashflow (434.6%) and they have 10.9x coverage on their interest payments.
Mark Williams, the Managing Director of Red 5 Limited has been there since January 16, 2014. He served as the General Manager of the Tampakan Copper Gold Project at GlencoreXstrata Plc since 2007 until 2013. He has experience in mining operations in a diverse range of open cut and underground environments. He has worked in developed markets of Australia, United Kingdom and New Zealand and emerging markets of Philippines, Vietnam and Thailand.
The rest of the board members are also considered experienced with 6.3 years average tenure between them.
Within the previous week my eyes have been on the insto’s - Credit Suisse, Commonwealth Bank, Goldman Sachs, JPMorgan, Merrill Lynch, and Morgan Stanley were all accumulating substantial amounts of RED.
Never take stock tips. Educate yourself and always DYOR while implementing a rigid risk management plan before investing your own money.