Hi Mark,
Two stocks giving us angst in the MM Emerging Companies Portfolio, as we often say look after your losers and the winners will look after themselves!
PEXA Group Ltd (PXA) – we talked about PXA earlier in the month here after IPART (Independent Pricing and Regulatory Tribunal of New South Wales), the state’s independent economic regulator proposed reducing PEXA Exchange’s regulated revenue requirement by around 20% -it’s not often that government intervention is a positive for investors!
- We are neutral towards PEXA given the regulatory uncertainty, and we’re kicking ourselves for not selling before this news was announced, as we had flagged, however, now the stock is down by such a magnitude, we think the risk/reward has improved dramatically, with the share price in our view pricing a scorched earth type scenario. Our gut feel is, PXA is close/at a low.
Chrysos Corp Ltd (C79) – a ~$600mn business that provides mining technology that uses its proprietary PhotonAssay technology to deliver faster, safer and more accurate gold, copper and silver analysis, replacing traditional fire assay methods for mining companies and laboratories.
We feel the numbers look better than the share price, at the end of 2025 C79 held $21.6 million in cash before securing a $200mn refinancing debt facility in June, which provides plenty of financial flexibility, so cash isn’t an issue.
The company is forecast to become profitable this FY26 on ~$100m of revenue but negative sentiment towards the Gold sector (where they operate) is weighing on the volatile stock which has almost halved from its February high. This is a growth stock which simply got well ahead of itself, plus the CSIRO overhang of ~9% of issued capital simply cannot be ignored following the sale in November – they halved their holding at the time at great levels in hindsight.
- We believe C79 still looks good but it’s hard to justify increasing exposure until the gold price turns.
