Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 30 Sep, 24 | AREC | Speculative Buy | USD 0.89 | USD 0.99 | USD 1.03 | 1 day | 15.7% |
Data Powered by EOD Historical Data (“EODHD”).
American Resources Corporation, together with its subsidiaries, extracts, processes, transports, and sells metallurgical coal to the steel and industrial industries. It supplies raw materials; and sells coal used in pulverized coal injections. The company was founded in 2006 and is headquartered in Fishers, Indiana.
Higher Quick Ratio: 0.29x in Q2 FY24 vs 0.19x in Q1 FY23
Higher Asset Base: Total Assets of USD 195.5 mn in Q2 FY24 vs 100.1 mn in Q2 FY23
Balance Sheet Risk: Long-Term Debt of USD 193.3 mn in Q2 FY24 vs USD 43.5 mn in Q2 FY23
Negative Profitability: Net Income of USD -6.62 mn in Q2 FY24
Dependence on Coal Markets, Asset Concentration, Elevated Debt Levels, Environmental Compliance Costs, Market Perception and Reputation etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 0.89 | 0.79 | 0.99 | 1.03 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the Daily Chart)
On the daily chart, AREC stock price is sustaining above the falling trendline breakout level, indicating the possibility of an upside movement hereon. The next resistance level is plotted around USD 0.970, and the price may test this level in the short term (2-6 weeks). A further movement above USD 0.970 may extend buying in the stock.
Technical Analysis (On the Daily Chart)
On the daily chart, AREC stock price is sustaining above the falling trendline breakout level, indicating the possibility of an upside movement hereon. On the daily chart, the momentum oscillator RSI (14-Period) is showing a reading of ~77.32 levels, indicating positive momentum. The weekly volumes also seem supportive of an upside movement. Further, the current market price (CMP) is above the trend-following indicator 50-period SMA, which may act as the support level.
As per the above-mentioned price action and technical indicators analysis, American Resources Corporation is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock at USD 0.89 as on Sep 30, 2024 at 06:36 am PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Coking Coal
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| AREC American Resources Corp Class A |
- -% | 1.03 | - | 36.76 | 7.41 | 8.50 | 8.38 | 15.60 |
| AMR Alpha Metallurgical Resources Inc |
-4.4897 2.16% | 203.82 | 8.64 | 2.66 | 0.93 | 1.83 | 0.77 | 4.31 |
| HCC Warrior Met Coal Inc |
-0.32 0.58% | 54.61 | 6.78 | 11.40 | 1.84 | 1.72 | 1.50 | 3.91 |
| ARCH Arch Resources Inc |
-1.065 0.77% | 136.66 | 16.06 | 3.04 | 1.05 | 1.95 | 1.00 | 7.22 |
| STMRF Stanmore Resources Limited |
- -% | 1.83 | 2.97 | 24.33 | 0.77 | 1.42 | 0.83 | 1.94 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 27, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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