Welp, we tried to hold on, but of course when the US markets sneeze, Australia catches the cold. Markets have fallen flat on their faces to end the week, down more than 1.5 per cent across the board.
Despite the US government shutdown that dragged on for nearly a month and a half being over, the markets are cowering at the thought of a backlog of missing jobs and inflation data, that will reveal whether the US economy merely cooled or slowed far more than expected.
Globally, energy markets were also down as crude fell nearly 5 per cent after OPEC admitted supply has outpaced demand much sooner than anyone expected.
Back home Aussie defence darling Droneshield tanked this week – down nearly 70 per cent in a little over a month – after the company revealed its founder and CEO Oleg Vornik offloaded ALL of his nearly 15 million shares on market for $49.5 million.
There’s always immense peer pressure on directors not to offload stock – whatever paper profit they’re sitting on. Clearly Vornik isn’t one to succumb to such pressures; he simply ripped the band-aid off and said, ‘show me the money’.
The move is reminiscent of Boss Energy managements masterclass offload in May of last year, before that stock dropped a similar amount shortly afterwards.
It may seem an obvious rule but, if management start dumping shares by the truckload, it’s time to get the hell out of dodge.
Aussie jobs numbers came in far stronger than expected. A positive right? The new jobs instead signal higher inflation for the coming period and a lower chance of a rate cut for Aussie market pundits.
Away from the ASX, Aussie companies are also making waves. E-commerce platform Rokt nears a Wall Street IPO debut for a massive $US7.9bn ($12.1bn) valuation. Founded 2012 by Bruce Buchanan, Rokt's upselling software serves all the big names including, Uber, Nordstrom, Expedia and Amex.
Revenue for the Aussie unicorn hit US$743 million last financial year, up 48 per cent, with EBITDA cracking a cool US$100 million, making it the third-largest Australian unicorn after only Canva and Airwallex.
And finally, the small caps fan favourites gold and silver were back on their merry march. After a 3-week hiatus the precious metals were up more than 5 per cent a pop this week, with gold once again sitting above $6400 an ounce and silver touching US$54 a tonne, only marginally shy of its record high.
Outside our Bulls N’ Bears Runners list this week the market darlings were limited on a rough week. In a rarity for Runners only one resources company has featured, instead our list was dominated by biotechs, wholesalers and packaging partnerships on a red week.
ZOONO GROUP LTD (ASX: ZNO)
Up 178% (6.3c – 17.5c)
Bulls N’ Bears Runner of the week is New Zealand-based antimicrobial provider Zoono group. There was no news to start the week, however last week the environmentally friendly antibacterial provider announced an exclusive contract with Mpact Operations and its partner in the food supply chain sector, OSY Group to use its patented Zoono shelf-life extension packaging across their ranges.
The stock kept the party going to start the week on last week’s bombshell, which included an exclusive five-year pact with the South African packaging titan, the continent’s biggest paper and plastics recycler, clocking in a cool R13.3 billion (NZ$1.339 billion) in revenue for last financial year.
Mpact will embed Zoono’s patented shelf-life extension goo across its corrugated board lines, with a minimum NZ$5.1 million (A$4.4 million) purchase commitment just to keep the exclusivity, with the first order landing in December.
Globally, food waste bleeds US$2.6 trillion annually - that’s trillion with a “t”, with 25 per cent coming from fruit and veg rots prior to even hitting the plate.
Zoono-OSY’s combo slaps antimicrobial magic onto packaging without migration into the produce, ticking every international food-contact reg box.
It’s already proven in the UK and EU and now it looks to be storming the gates of Africa on a new substrate.
The stock ignited late last week, climbing from 4.6c to 6.3c, then went full parabolic Monday-Wednesday, peaking 17.5c before before a please explain by the good men and women down at the ASX was issued to understand why things were continuing to heat up.
Zoono answered the queries with yet another exclusive packaging agreement by Friday, this time with Aussie fresh-produce group Multisteps. The company has confirmed the details of this latest deal weren’t locked in prior to Wednesday’s enforced trading halt, it just has that many new deals to deal with.
Zoono’s pivot from spray-and-wipe sanitiser hype during Covid, to a recurring-revenue packaging juggernaut looks to have been a masterstroke.
Multiple years of R&D, supermarket trials and exporter validation are finally monetising. If Mpact’s volumes scale—and early orders suggest they will—this could be the runway to escape velocity.
RENERVE LTD (ASX: RNV)
Up 120% (10c – 22c)
Sliding into silver with clinical precision is nerve-repair disruptor ReNerve, a home-grown med-tech that just cracked one of the world’s biggest healthcare wallets: the US Department of Defense and Veterans Affairs networks.
The company unveiled Thursday that its flagship NervAlign bioabsorbable nerve cuff product had been green-lit across the DoD’s 51 hospitals and 424 clinics, plus Veteran Affairs’ 170 medical centres.
The ink was barely dry before initial and repeat purchase orders landed, earmarking its nerve regenerative NervAlign for immediate rollout in select facilities with broader deployment queued for coming months.
The share price soared on Thursday’s announcement, hitting an intraday high of 22c, up 120 per cent from last week’s 10c close on an eye-catching $3 million turnover.
For a company chasing recurring revenue in a multi-billion-dollar nerve-repair market, US government contracts are the golden ticket.
ReNerve says its NervAlign product wraps severed or traumatised peripheral nerves post-surgery, shielding them during the fragile healing window. The company says it is bioabsorbable and dissolves harmlessly, dodging secondary removal ops.
An expanded randomised clinical study will now enrol 240 patients across two cohorts after interim data showed pain reduction and functional recovery leaps versus standard care.
The DoD/VA nod caps a global sprint to addressable markets for ReNerve, which is building a nerve-to-skin ecosystem already having footholds in India, Taiwan, Hong Kong, Middle East and Mexico.
With US military surgeons now prescribing and VA reimbursements in play, the revenue flywheel is spinning.
STEALTH GROUP HOLDINGS (ASX: SGI)
Up 114% (69.5c – 149c)
Throttling into third is diversified wholesale hardware dynamo Stealth Group Holdings, after it locked in a transformation $22 million acquisition of Hardware & Building Traders - Australia’s largest privately owned national buying group for the hardware and industrial sector.
Stealth says the bolt-on catapults the company into a $93 billion addressable market as the lean, mean alternative to majors like Bunnings and Total Tools.
Hardware & Building drags 1165 independent stores, 490 supplier partnerships and $700 million annual purchases into Stealth’s fold. Combined, the new beast represents $800 million in wholesale buying power, $1.3 billion retail sales, with 1300 suppliers and 1200 stores nationwide.
Stealth says its advantage comes from excluding the capital-sucking owned-infrastructure of the big-box Bunnings competitors, with the deal presenting a once-in-a-generation platform to profit from independent operators.
The market hammered the buy button on Monday’s partnership, as shares flew up across the week to a high of $1.49 from a close of 69.5c last week, up 114 per cent on some $5.5 million in stock traded.
The immediately accretive, cash-generative and scalable partnership looks like music to the market’s ears.
With its national footprint swollen, distribution optimised and cash flows promising, Stealth could be the dark horse that re-rates the hardware supply chain industry.
HAVILAH RESOURCES LTD (ASX: HAV)
Up 64% (27.5c – 45c)
Earning a well-deserved honourable mention is South Australian copper sleeper Havilah Resources, which has inked a $240 million pathway to production in partnership with mid-tier copper powerhouse Sandfire Resources.
The binding deal lets Sandfire earn 80 per cent of its monster Kalkaroo copper-gold project via $105 million upfront - 70 per cent scrip, 30 per cent cash – contribution followed by another $105 million post PFS backed by some 20,000m of fresh drilling, plus $30 million in regional exploration.
Kalkaroo has been around for a while and boasts a meaty 100 million tonne ore reserve at 0.47 per cent copper and 0.44 grams per tonne (g/t) gold, inside a 224 million tonne sulphide resource at 0.49 per cent copper and 0.36g/t gold.
It’s one of Australia’s largest undeveloped open-pit copper deposits, which was punted by BHP post-OZ Minerals takeover – classic BHP foresight.
Two years on and the project now has a suitor, with suitably deep pockets and deeper expertise.
Havilah stock catapulted up on Thursday’s news, to close at a high on Friday of 45c, up 64 per cent from last week’s 27.5c close on some $5 million in paper traded to close the week.
The company says it will retain a 20 per cent free-carried interest to final investment decision, with Sandfire holding right of first refusal.
The PFS is due inside 24 months and is set to de-risk extensions along strike and at depth, potentially bloating the reserve before a dollar of Havilah cash is spent.
A 2019 PFS pegged 13 years of production at 30,000 tonnes per annum of copper and 72,000 ounces per annum of gold, with a capex $332 million.
With copper now flirting around the US$11,000 a tonne mark and gold up three times its value since then, Sandfire will look to make Havilah its new Australian darling.
For Havilah this is vindication after decades of discovery grind. Kalkaroo, Mutooroo, is now funded by a partner that knows how to turn rock into revenue in a copper-gold environment showing no signs of slowing down.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
