Daily BriefsEnergy & Materials Sector

Daily Brief Energy/Materials: Norwest Energy NL, Origin Energy, Altius Minerals, Exxon Mobil, Nippon Light Metal and more

In today’s briefing:

  • Norwest Backs MinRes’ Bumped Offer
  • Origin Energy (ORG AU): Risk/Reward Profile
  • Mining Royalties & Streams: A Quick Primer
  • Exxon Mobil As A Dividend Aristocrat Stock: Not As Attractive As You Might Think
  • Nippon Light Metal (5703 JP) Is On The Verge Of Confirming Bullish MT Trend Change

Norwest Backs MinRes’ Bumped Offer

By David Blennerhassett

  • Back on the 10 January, Norwest Energy NL (NWE AU) rejected Mineral Resources (MIN AU)‘s off-market scrip Offer.
  • It was apparent what MinRes needed to bump. This was an easy win if they do. On cue, they have now increased the scrip terms and NWE’s directors are supportive. 
  • Scrip terms are now 1 MinRes for every 1,300 NWE shares – from 1,367. I think NWE could have held out for more, but it is what it is. 

Origin Energy (ORG AU): Risk/Reward Profile

By Arun George

  • Origin Energy (ORG AU)’s exclusivity agreement with Brookfield/EIG expired on 24 January. Brookfield/EIG is reportedly continuing its due diligence on its A$9.00 per share offer.
  • Time often kills deals. There is speculation that recent price caps would result in Brookfield/EIG walking away or trying to recut the deal terms. ACCC approval is also an overhang.
  • Peers’ share prices have risen despite the price cap which weakens the case for a recut to the deal terms. Brookfield/EIG clearly want Origin as it twice bid against itself. 

Mining Royalties & Streams: A Quick Primer

By Atrium Research

  • Mining royalties and streams are low-risk alternatives to investing directly in mining companies and commodities
  • Royalties and streams have vastly outperformed gold miners over the last 20 years since they are not exposed to exploration risk, capex inflation, or dilution risk while boasting high EBITDA margins and ROIC
  • Recent trends include a focus on battery metals, large-scale M&A, and increasing popularity due to poor equity prices among miners Royalties are typically structured as a percentage of the total production or total sales (commodity agnostic).

Exxon Mobil As A Dividend Aristocrat Stock: Not As Attractive As You Might Think

By Vladimir Dimitrov, CFA

  • Exxon Mobil continues to defy gravity even as markets rolled over in 2022.
  • There are better alternatives for those looking for passive income streams, but shareholders should be prepared for more turbulence ahead, according to the author.
  • Exxon Mobil’s long-term success is still optimistic on the long- term success of the company.

Nippon Light Metal (5703 JP) Is On The Verge Of Confirming Bullish MT Trend Change

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
  • Every recommendation requires definitive evidence of all 3 pillars to be regarded as a high probability outcome. 
  • 5703 JP has a LT double bottom in place and comprehensive MT uptrend confirmation (weekly RSI). Only an appropriate weekly close is required this week to confirm the MT uptrend.

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