Materials Analyst/Strategist, Janus Analysis

Gaius King

Materials Analyst/Strategist

Janus Analysis

Equity Bottom-Up

<ul>
<li>Uranium Price has fallen 12% since early February</li>
<li>
Maintain SELL on YCA, 1-year Target Price £1.98-2.02 ps NPV4% assuming $24/lb U3O8
</li>
<li>Maintain BUY recommendation <a href="https://www.smartkarma.com/entities/5124" target="_blank" data-smartkarma-citation="entities:5124:1">Azumah Resources (AZM AU)</a></li>
<li>Feasibility Study due Q319, not yet contain newly discovered mineralisation</li>
<li>Drilling moving to the nearby Kunche deposit, targeting similar depth extensions</li>
<li><a href="https://www.smartkarma.com/entities/41" target="_blank" data-smartkarma-citation="entities:41:1">Fortescue Metals (FMG AU)</a> approve Iron Bridge Magnetite Project </li>
<li>Est. proposed nameplate only allows~70Mtpa of fines to achieve blend &gt;60% Fe
</li>
<li>Will the increased magnetite production cost, be worth the decrease in discount?</li>
<li>Est. 2019 global seaborne iron ore production 50Mt less than 2018, stronger for longer</li>
<li>
<a href="https://www.smartkarma.com/entities/41" target="_blank" data-smartkarma-citation="entities:41:1">Fortescue Metals (FMG AU)</a>, <a href="https://www.smartkarma.com/entities/27844" target="_blank" data-smartkarma-citation="entities:27844:1">Yellow Cake PLC (YCA LN)</a>, <a href="https://www.smartkarma.com/entities/5124" target="_blank" data-smartkarma-citation="entities:5124:1">Azumah Resources (AZM AU)</a>, <a href="https://www.smartkarma.com/entities/4111" target="_blank" data-smartkarma-citation="entities:4111:1">Peel Mining Ltd (PEX AU)</a>, <a href="https://www.smartkarma.com/entities/6698" target="_blank" data-smartkarma-citation="entities:6698:1">Gold Road Resources (GOR AU)</a>, <a href="https://www.smartkarma.com/entities/19111" target="_blank" data-smartkarma-citation="entities:19111:1">Alkane Resources (ALK AU)</a>, <a href="https://www.smartkarma.com/entities/10577" target="_blank" data-smartkarma-citation="entities:10577:1">Focus Minerals (FML AU)</a>, <a href="https://www.smartkarma.com/entities/15733" target="_blank" data-smartkarma-citation="entities:15733:1">White Cliff Minerals (WCN AU)</a>, <a href="https://www.smartkarma.com/entities/11085" target="_blank" data-smartkarma-citation="entities:11085:1">Pacifico Minerals (PMY AU)</a>, <a href="https://www.smartkarma.com/entities/12256" target="_blank" data-smartkarma-citation="entities:12256:1">Cardinal Resources (CDV AU)</a>, <a href="https://www.smartkarma.com/entities/5035" target="_blank" data-smartkarma-citation="entities:5035:1">Blackham Resources (BLK AU)</a>, <a href="https://www.smartkarma.com/entities/19133" target="_blank" data-smartkarma-citation="entities:19133:1">Ausgold Ltd (AUC AU)</a>, <a href="https://www.smartkarma.com/entities/12256" target="_blank" data-smartkarma-citation="entities:12256:1">Cardinal Resources (CDV AU)</a>, <a href="https://www.smartkarma.com/entities/7038" target="_blank" data-smartkarma-citation="entities:7038:1">Alliance Resources (AGS AU)</a>, <a href="https://www.smartkarma.com/entities/23533" target="_blank" data-smartkarma-citation="entities:23533:1">Griffin Mining (GFM LN)</a>, <a href="https://www.smartkarma.com/entities/17495" target="_blank" data-smartkarma-citation="entities:17495:1">Emerald Resources Nl (EMR AU)</a>, <a href="https://www.smartkarma.com/entities/17495" target="_blank" data-smartkarma-citation="entities:17495:1">Emerald Resources Nl (EMR AU)</a>, <a href="https://www.smartkarma.com/entities/2971" target="_blank" data-smartkarma-citation="entities:2971:1">Hawkstone Mining (HWK AU)</a>, <a href="https://www.smartkarma.com/entities/20488" target="_blank" data-smartkarma-citation="entities:20488:1">Liontown Resources (LTR AU)</a>, <a href="https://www.smartkarma.com/entities/14597" target="_blank" data-smartkarma-citation="entities:14597:1">Lake Resources Nl (LKE AU)</a>, <a href="https://www.smartkarma.com/entities/1923" target="_blank" data-smartkarma-citation="entities:1923:1">Jameson Resources (JAL AU)</a>, <a href="https://www.smartkarma.com/entities/9553" target="_blank" data-smartkarma-citation="entities:9553:1">Atrum Coal Nl (ATU AU)</a>, <a href="https://www.smartkarma.com/entities/15059" target="_blank" data-smartkarma-citation="entities:15059:1">Talga Resources (TLG AU)</a>, <a href="https://www.smartkarma.com/entities/15638" target="_blank" data-smartkarma-citation="entities:15638:1">Nexus Minerals (NXM AU)</a>, <a href="https://www.smartkarma.com/entities/1365" target="_blank" data-smartkarma-citation="entities:1365:1">Chesser Resources (CHZ AU)</a>, <a href="https://www.smartkarma.com/entities/2237" target="_blank" data-smartkarma-citation="entities:2237:1">Spectrum Rare Earths (SPX AU)</a>, <a href="https://www.smartkarma.com/entities/6192" target="_blank" data-smartkarma-citation="entities:6192:1">De Grey Mining (DEG AU)</a>, <a href="https://www.smartkarma.com/entities/12054" target="_blank" data-smartkarma-citation="entities:12054:1">Strandline Resources (STA AU)</a>, <a href="https://www.smartkarma.com/entities/15927" target="_blank" data-smartkarma-citation="entities:15927:1">Canyon Resources (CAY AU)</a>, Thor Mining, <a href="https://www.smartkarma.com/entities/23072" target="_blank" data-smartkarma-citation="entities:23072:1">Manila Mining (MA PM)</a>
</li>
</ul>


Uranium Price has fallen 12% since early February

Maintain SELL on YCA, 1-year Target Price £1.98-2.02 ps NPV4% assuming $24/lb U3O8

Maintain BUY recommendation Azumah Resources (AZM AU)
Feasibility Study due Q319, not yet contain newly discovered mineralisation
Drilling moving to the nearby Kunche deposit, targeting similar depth extensions
Fortescue Metals (FMG AU) approve Iron Bridge Magnetite Project 
Est. proposed nameplate only allows~70Mtpa of fines to achieve blend &gt;60% Fe

Will the increased magnetite production cost, be worth the decrease in discount?
Est. 2019 global seaborne iron ore production 50Mt less than 2018, stronger for longer

Fortescue Metals (FMG AU), Yellow Cake PLC (YCA LN), Azumah Resources (AZM AU), Peel Mining Ltd (PEX AU), Gold Road Resources (GOR AU), Alkane Resources (ALK AU), Focus Minerals (FML AU), White Cliff Minerals (WCN AU), Pacifico Minerals (PMY AU), Cardinal Resources (CDV AU), Blackham Resources (BLK AU), Ausgold Ltd (AUC AU), Cardinal Resources (CDV AU), Alliance Resources (AGS AU), Griffin Mining (GFM LN), Emerald Resources Nl (EMR AU), Emerald Resources Nl (EMR AU), Hawkstone Mining (HWK AU), Liontown Resources (LTR AU), Lake Resources Nl (LKE AU), Jameson Resources (JAL AU), Atrum Coal Nl (ATU AU), Talga Resources (TLG AU), Nexus Minerals (NXM AU), Chesser Resources (CHZ AU), Spectrum Rare Earths (SPX AU), De Grey Mining (DEG AU), Strandline Resources (STA AU), Canyon Resources (CAY AU), Thor Mining, Manila Mining (MA PM)



New J Hutton – Exploration Report (Weeks Ending 04/05/19)

Macro and Australian equity strategist, Macro Strategy Advisors

Shane Lee

Macro and Australian equity strategist

Macro Strategy Advisors

Cross Asset Strategy

<ul>
<li>
Despite relatively sluggish price performance, the ASX 200 has provided global investors with strong returns that have seen it outperform both Japan and Europe over the past few years. The market also performs well late in the global cycle when global volatility is rising because a relatively large component of returns are generated by dividends and many stocks in the ASX 200 are dominant players in their markets or they operate in small markets making earnings more defendable under late cycle cost pressures. </li>
<li>
When looking at Australia as a late-cycle opportunity, earnings quality is an important screen to consider. Stocks with good earnings quality attract the highest PE multiples and the strongest Buy recommendations.  However, in this note, we screen the ASX 200 universe for both longer-term and short-term movements in earnings quality and analyse how these movements translate into returns. </li>
<li>
FMG, WTC, XRO, WHC, LYC, MQG, S32, NHC, SAR, WEB have the distinction of making the top 50 stocks with the strongest earnings quality improvement and the list of top 50 stocks with the largest outperformance during the past 3 years. In contrast, TAH, SDA, NCM, and NHF have all seen large declines in earnings quality and have underperformed during this period. </li>
<li>
During the most recent half-year results period, NHC, SOL, BXB, VOC, SAR, BVS, IRE, IPH, and QBE made the list of stocks with the largest improvement in earnings quality and the list of top 50 stocks with the best performance. AGL, BSL, and ASL saw the largest decline in earnings quality and this coupled with underperformance.  In contrast, STO performed well, despite having declining earnings quality suggesting some underperformance could be expected. </li>
<li>
QBE is unique in that it has seen not only a strong lift in earnings quality during the half, but it has also seen its EPS growth upgraded. LNK saw a large decline in earnings quality but saw a large number of upgrades that put it in the list of top 50 most upgraded stocks during the period. </li>
<li>
WTC and S32 are in our model portfolio in our recent shift to realign it towards Resources and Growth stocks after the Q4 18 sell-off. Our work quality shows they have been good earnings quality stocks and this supports our decision to include these stocks in our portfolio.</li>
</ul>



Despite relatively sluggish price performance, the ASX 200 has provided global investors with strong returns that have seen it outperform both Japan and Europe over the past few years. The market also performs well late in the global cycle when global volatility is rising because a relatively large component of returns are generated by dividends and many stocks in the ASX 200 are dominant players in their markets or they operate in small markets making earnings more defendable under late cycle cost pressures. 

When looking at Australia as a late-cycle opportunity, earnings quality is an important screen to consider. Stocks with good earnings quality attract the highest PE multiples and the strongest Buy recommendations.  However, in this note, we screen the ASX 200 universe for both longer-term and short-term movements in earnings quality and analyse how these movements translate into returns. 

FMG, WTC, XRO, WHC, LYC, MQG, S32, NHC, SAR, WEB have the distinction of making the top 50 stocks with the strongest earnings quality improvement and the list of top 50 stocks with the largest outperformance during the past 3 years. In contrast, TAH, SDA, NCM, and NHF have all seen large declines in earnings quality and have underperformed during this period. 

During the most recent half-year results period, NHC, SOL, BXB, VOC, SAR, BVS, IRE, IPH, and QBE made the list of stocks with the largest improvement in earnings quality and the list of top 50 stocks with the best performance. AGL, BSL, and ASL saw the largest decline in earnings quality and this coupled with underperformance.  In contrast, STO performed well, despite having declining earnings quality suggesting some underperformance could be expected. 

QBE is unique in that it has seen not only a strong lift in earnings quality during the half, but it has also seen its EPS growth upgraded. LNK saw a large decline in earnings quality but saw a large number of upgrades that put it in the list of top 50 most upgraded stocks during the period. 

WTC and S32 are in our model portfolio in our recent shift to realign it towards Resources and Growth stocks after the Q4 18 sell-off. Our work quality shows they have been good earnings quality stocks and this supports our decision to include these stocks in our portfolio.


Quality Counts: A Screen of ASX 200 Earnings Quality

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Incremental technical developments continue to be of the bullish variety as more and more countries/regions begin to participate in the rally. These ongoing improvements further cement our positive overall outlook, and we continue to believe that global equities (MSCI ACWI) are poised for additional strength moving forward. In our April International Strategy, we highlight various themes which lead to our overall positive outlook, along with areas within the world's markets where we see immediate opportunity.

Incremental technical developments continue to be of the bullish variety as more and more countries/regions begin to participate in the rally. These ongoing improvements further cement our positive overall outlook, and we continue to believe that global equities (MSCI ACWI) are poised for additional strength moving forward. In our April International Strategy, we highlight various themes which lead to our overall positive outlook, along with areas within the world's markets where we see immediate opportunity.

Global Ex-U.S. Equity Strategy: Positive Outlook Intact; Remain Overweight China

Accelerating Tomorrow’s Independent Research

Boost Research

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<ul>
<li>
<a href="https://www.smartkarma.com/entities/23731" target="_blank" data-smartkarma-citation="entities:23731:1">Vale SA (VALE US)</a> have had two major fatal dam-failures in three years</li>
<li>Possible (probable?) design flaw</li>
<li>Expect all Vale's iron ore operations to be technically audited</li>
<li>Substantial Management &amp; Board changes inevitable</li>
<li>Probability that a portion of Vale's existing operations will fail engineering inspection.</li>
<li>Forecast resultant capacity constraints</li>
<li>
<a href="https://www.smartkarma.com/entities/13" target="_blank" data-smartkarma-citation="entities:13:1">Rio Tinto Ltd (RIO AU)</a>,  <a href="https://www.smartkarma.com/entities/147" target="_blank" data-smartkarma-citation="entities:147:1">Bhp Billiton (BHP AU)</a>, <a href="https://www.smartkarma.com/entities/41" target="_blank" data-smartkarma-citation="entities:41:1">Fortescue Metals (FMG AU)</a> to benefit from lost production</li>
</ul>



Vale SA (VALE US) have had two major fatal dam-failures in three years
Possible (probable?) design flaw
Expect all Vale's iron ore operations to be technically audited
Substantial Management &amp; Board changes inevitable
Probability that a portion of Vale's existing operations will fail engineering inspection.
Forecast resultant capacity constraints

Rio Tinto Ltd (RIO AU),  Bhp Billiton (BHP AU), Fortescue Metals (FMG AU) to benefit from lost production


Vale in Trouble - Expect Rio, BHP, FMG to Benefit (Flash Note)

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2>
<ul>
<li>Steakhouse showdown for Trump and Xi yields a trade truce</li>
<li>Housing slumps, wealth gap yawns</li>
<li>Pumping iron as prices go bear</li>
<li>Stocks beaten up – but worth a punt?</li>
<li>Lessons in democracy (on one side of the Strait)</li>
</ul>
<div class="content-remarks">
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.
</div>

China News That Matters

Steakhouse showdown for Trump and Xi yields a trade truce
Housing slumps, wealth gap yawns
Pumping iron as prices go bear
Stocks beaten up – but worth a punt?
Lessons in democracy (on one side of the Strait)


In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.


G20/Property Woes/Steel & Iron Slump/Equity Market/Taiwan Election Shocker

Australia

Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fortescue Metals (FMG AU)

New J Hutton – Exploration Report (Weeks Ending 04/05/19)

Uranium Price has fallen 12% since early February Maintain SELL on YCA, 1-year Target Price £1.98-2.02 ps NPV4% assuming $24/lb U3O8 Maintain...

Gaius King

Quality Counts: A Screen of ASX 200 Earnings Quality

Despite relatively sluggish price performance, the ASX 200 has provided global investors with strong returns that have seen it outperform both...

Shane Lee

Global Ex-U.S. Equity Strategy: Positive Outlook Intact; Remain Overweight China

Incremental technical developments continue to be of the bullish variety as more and more countries/regions begin to participate in the rally....

Vermilion Research

Vale in Trouble - Expect Rio, BHP, FMG to Benefit (Flash Note)

Vale SA (VALE US) have had two major fatal dam-failures in three years Possible (probable?) design flaw Expect all Vale's iron ore operations to...

Boost Research

G20/Property Woes/Steel & Iron Slump/Equity Market/Taiwan Election Shocker

China News That Matters Steakhouse showdown for Trump and Xi yields a trade truce Housing slumps, wealth gap yawns Pumping iron as prices go...

Diana Choyleva

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)