Rating Classifications
| Rating | Performance vs Benchmark |
|---|---|
| Buy | Greater than +10% |
| Hold | Between -10% and +10% |
| Sell | Less than -10% |
| Not Rated | The company described in the note has sponsored the research and as such the analysts have abstained from making a recommendation. |
Ratings Spread
| Rating | Universe | Investor Relations Clients | ||
|---|---|---|---|---|
| Count | Percent Of Total | Count | Percent Of Total | |
| Buy | 0 | 0% | 0 | 0% |
| Hold | 0 | 0% | 0 | 0% |
| Sell | 0 | 0% | 0 | 0% |
| Not Rated | 4 | 100% | 2 | 100% |
Coverage List
* Investor Relations Client| Code | Company Name | Rating | Initiated | Last Updated |
|---|---|---|---|---|
| WNX | Wellnex Life Limited | Not Rated | 01/03/2024 | 17/05/2024 |
| VRS | Veris Ltd* | Not Rated | 29/08/2019 | 29/08/2019 |
| CDY | Cellmid Ltd | Not Rated | 15/05/2019 | 16/08/2019 |
| CDY | Cellmid Ltd | Not Rated | 15/05/2019 | 10/05/2019 |
| XTE | Xtek Ltd* | Not Rated | 06/03/2019 | 31/10/2019 |
| XTE | Xtek Ltd* | Not Rated | 06/03/2019 | 18/07/2019 |
| XTE | Xtek Ltd* | Not Rated | 06/03/2019 | 06/03/2019 |
Risk Classification
Our universe is limited to companies outside the S&P ASX200 Index, which means all companies covered in our reports should be considered “Speculative” or “High Risk” in comparison to the overall market.
We have two methodologies that are used internally in order to determine the intrinsic value of a security. The intrinsic value that is determined from either of these two methodologies is what Mawson Graham believes is a fair valuation for the company given available sources of information and current market conditions at the time. The two methodologies applied internally are either 1) a Discount Cashflow Model (DCF) using a Terminal Value in year 5, or 2) A relative valuation that is generated via peer comparison by focusing on metrics relevant to that particular company or industry. Usually, for companies that display a more predictable rate of growth or companies that already have a track record of earnings, a DCF is the favoured methodology. Otherwise, a relative valuation using peers with a focus on various key metrics may be used. Because Mawson Graham covers small companies, accounting for the underlying risk an investment poses to potential investors is more critical than usual. Without accurately accounting for risk the intrinsic value of a Company may be grossly over or under exaggerated. For companies evaluated using a DCF, the analyst may use an inflated discount rate in order to account for the uncertainty of future cash flows modelled. Alternatively, an arbitrary discount to intrinsic value when comparing a company to its peers may also be applied, with the size of this discount being determined at the discretion of the analyst. Risks are largely qualitative in nature and accurately applying the right discount rates takes experience and care. In no instance will an analyst apply a premium to peers or apply a more attractive than usual discount rate unless it is thoroughly justified.
Both of these methods are done in-house, and the details are not provided to the reader. Because of the commercial nature of our relationships with companies covered in our sponsored reports, Mawson Graham purposefully do not provide a share price target, valuation range, rating, or any other information to investors regarding our opinion of what the intrinsic value of the company may be. Our analysts provide views on the prospects of a company by using factual information which may allow readers to base logical inferences upon. The reader is responsible for developing their own view and opinion of the company’s intrinsic value. Readers that require assistance with this task are encouraged to seek independent investment advice. When potential conflicts exist, we believe that providing price targets and ratings, however well-intentioned, may pose a problem for less sophisticated investors who are unfamiliar with research or the financial markets in general.
Process For Selection
Our selection criteria for companies may be one or both of the following; a) companies whose shares are trading at a discount of at least 30% to its intrinsic value; b) companies that have sponsored us for investor relations services.
We have two methodologies that are used internally in order to determine the intrinsic value of a security. The intrinsic value that is determined from either of these two methodologies is what Mawson Graham believes is a fair valuation for the company given available sources of information and current market conditions at the time. The two methodologies applied internally are either 1) a Discount Cashflow Model (DCF) using a Terminal Value in year 5, or 2) A relative valuation that is generated via peer comparison by focusing on metrics relevant to that particular company or industry. Usually, for companies that display a more predictable rate of growth or companies that already have a track record of earnings, a DCF is the favoured methodology. Otherwise, a relative valuation using peers with a focus on various key metrics may be used. Because Mawson Graham covers small companies, accounting for the underlying risk an investment poses to potential investors is more critical than usual. Without accurately accounting for risk the intrinsic value of a Company may be grossly over or under exaggerated. For companies evaluated using a DCF, the analyst may use an inflated discount rate in order to account for the uncertainty of future cash flows modelled. Alternatively, an arbitrary discount to intrinsic value when comparing a company to its peers may also be applied, with the size of this discount being determined at the discretion of the analyst. Risks are largely qualitative in nature and accurately applying the right discount rates takes experience and care. In no instance will an analyst apply a premium to peers or apply a more attractive than usual discount rate unless it is thoroughly justified.
Both of these methods are done in-house, and the details are not provided to the reader. Because of the commercial nature of our relationships with companies covered in our sponsored reports, Mawson Graham purposefully do not provide a share price target, valuation range, rating, or any other information to investors regarding our opinion of what the intrinsic value of the company may be. Our analysts provide views on the prospects of a company by using factual information which may allow readers to base logical inferences upon. The reader is responsible for developing their own view and opinion of the company’s intrinsic value. Readers that require assistance with this task are encouraged to seek independent investment advice. When potential conflicts exist, we believe that providing price targets and ratings, however well-intentioned, may pose a problem for less sophisticated investors who are unfamiliar with research or the financial markets in general.
Conflicts Management Policy
- We do not receive commissions or brokerage for share trades executed by investors using our service.
- We do not cover stocks that we represent or intend to represent in a corporate advisory (transaction) capacity.
- All stocks covered in our research are placed on a staff trading embargo list which prohibits staff from transacting until coverage ceases.
- Any positions held prior to coverage in staff accounts or accounts of immediate family are disclosed within the relevant research report.
- We make robust, bold disclaimers and disclosures within our reports describing our issuer pays business model and the potential conflicts that exist.
- Investors are encouraged to seek independent investment advice prior to making any decisions based on information within our research.
- We do not make ratings recommendations (Buy, Hold, Sell) or place price targets on any companies with which we have a commercial relationship. These reports are marked as "Not Rated".
Scope Of Expertise
We cover companies with a market cap <A$100m in a range of sectors. Our firm's research capabilities are selected for and focused upon analysing small companies in this universe.
Our research team is headed by Erik Bergseng (Head of Research). Erik has been involved in small companies for 15 years as an analyst, investor, and corporate advisor. He has attended the University of New South Wales for a Bachelor of Commerce, has RG146, ADA1, ADA2 qualifications and is currently a candidate in the Chartered Financial Analyst (CFA) program (Level III).
Important Disclaimer/Disclosure
All research reports ("research", "reports") are provided by Mawson Graham Pty Ltd (ABN 53 631 737 650) (“Mawson Graham”) a Corporate Authorised Rep (CAR) of Vested Equities Pty Ltd (ABN 54 601 621 390; AFSL 478987) (“Vested”).
The material in our research reports may contain general advice while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. Our reports do not purport to contain all the information that a prospective investor may require. The material contained in our reports does not take into consideration an investor’s objectives, financial situation or needs. Before acting on the advice, investors should consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. The material contained in our reports is for information purposes only and is not an offer, solicitation or recommendation with respect to the subscription for, purchase or sale of securities or financial products and neither or anything in it shall form the basis of any contract or commitment. Our research should not be regarded by recipients as a substitute for the exercise of their own judgment and recipients should seek independent advice.
The material in our reports has been obtained from sources believed to be true but neither Mawson Graham nor its licensee or associates make any recommendation or warranty concerning the accuracy, or reliability or completeness of the information or the performance of the companies referred to in our reports.
Past performance is not indicative of future performance. Any opinions and or recommendations expressed in our reports are subject to change without notice and Mawson Graham is not under any obligation to update or keep current the information contained within our reports. References made to third parties are based on information believed to be reliable but are not guaranteed as being accurate.
Mawson Graham and its respective officers may have an interest in the securities or derivatives of any entities referred to in our reports. Mawson Graham does, and seeks to do, business with companies that are the subject of its research reports. Specifically, Mawson Graham is engaged for Investor Relations services on a monthly retainer basis by the company which is the subject of reports flagged as "Not Rated".
The analyst(s) hereby certify that all the views expressed in our reports accurately reflect their personal views about the subject investment theme and/or company securities.