Thoughts on 29 Metals (29M) & Australian Clinical Labs (ACL) please
Good Morning, What's MM view on 29M & ACL? What's your pics in both these spaces? Thanks in advance Anthony
The Latest Q&A
Answer
Hi Anthony,
We’ve looked at these 2 companies individually:
29Metals Ltd (29M) $2.57 – This is a $1.2bn exploration and mining services business which has more than doubled from its July low but we aren’t keen on the risk/reward around the $2.50 region with plenty of optimism built into the rally. We prefer to stay in the big end of town in the current economic climate with Sandfire Resources (SFR) our current pick although we have recently trimmed this position believing it had run too far, too fast. A pullback to ~$2.00 would have us interested in 29M.
Australian Clinical labs Ltd (ACL) $3.08 – Australian Clinical Labs Limited is a private provider of pathology services. Its laboratories perform a range of pathology tests each year for a range of clients, including doctors, specialists, patients, hospitals, and corporate clients. The stock appears relatively cheap trading on a 12.5x valuation for 2023 earnings, its even started paying a large dividend although this seems to have weighed on the share price. The stocks halved this year and is trading around its all-time low making it way too hard for MM – we prefer Sonic Healthcare (SHL) for pathology exposure however think the recover (like that of Ramsay Healthcare) is not going to play out until the latter part of CY23.
