Report Cover Page

Contents

Where are we in the Cycle?
The growth picture remains too subdued to warrant more interest in the resources sector, at least for the time being. Stalling global trade is the next looming threat to growth momentum and the likely source of further global growth downgrades by the International Monetary Fund.   More...

Market Directions
Resource sector prices have hit a wall even as equity markets more generally push higher. Equity markets are being dominated by changing monetary policy expectations which have little effect on growth, leaving resource sector outcomes largely unaffected.    More...

Portfolio Performance and Positioning
Portfolio outcomes in August fell below the benchmark but the difference has been largely reversed in the first few days of September. Declining stocks outnumbered rising prices in all three company categories in the past week. Following weighting reductions in the past week (and in the absence of available replacements stocks presently), cash positions have been raised.    More...

Stock Reviews and Rating Analysis
Gascoyne Resources (GCY:AU), developing gold assets in Western Australia, has been classified as a Phase II company and rated ‘3+’ on the five point PortfolioDirect rating scale where a ‘5’ is the highest risk adjusted rating. A sevenfold change in the Gascoyne Resources share price dating from the beginning of 2016 exceeded by over 500 percentage points the increase in the ASX All Ordinaries gold index. This strong endorsement by the market of the company’s underlying value proposition leaves its current market value within 5% of its assessed value and with reduced scope for further near term price appreciation. The PortfolioDirect modelling implies a cash flow result equivalent to buying a bond with an annual yield of slightly over 10%. The PortfolioDirect rating analysis concludes that Gascoyne Resources is fairly priced presently but displays the potential for sufficient positive value momentum over the coming three years to warrant an overall rating toward the upper end of the range of feasible outcomes.
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Although the statements of fact in this communication have been added from and are based upon sources E.I.M. Capital Managers Pty Ltd, the publisher, believes to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.

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