ADVISOR WATCHLIST
Shannon McShane
Nufarm ( NUF ) is a major producer of crop protection products , selling into all major world markets . The company is emerging from a period of sustained headwinds , with mixed seasonal conditions , industry related supply issues and COVID . Seasonal conditions have improved , with bumper conditions in Australasia and balanced North America trends pointing to solid conditions . Management believe the European business has reached an earnings trough , following a litany of problems since major acquisitions in 2018 . Nufarm is also commercialising its proprietary omega-3 canola oil , which is likely to add significant value .
Advisor - Gold Coast & Brisbane SMcShane @ burrell . com . au ( 07 ) 5583 7815
Shaun Minahan
Buy DOW - Downer EDI Limited is based in Sydney and operates as a global diversified services provider . It builds roads , constructs rail networks , manages power & gas networks , provides water & wastewater treatments and maintains renewable wind & solar assets . They currently divesting their stadium catering , commercial laundry , engineering construction and mining engineering services to focus on the more profitable parts of the business . Downer EDI stands to benefit from increased government stimulus infrastructure spending over the next few years . Based on estimated FY 21 earnings , Downer EDI is trading on an earnings multiple 17.1x and yielding 3.8 % unfranked .
CA , Associate - Senior Equities Advisor sminahan @ burrell . com . au ( 07 ) 5583 7800
Tony Killer
Senior Investment Advisor – Equities tkiller @ burrell . com . au ( 07 ) 4153 4499
Warrego Energy ( WGO ) offers exposure to the West Erregulla gas field in the Perth Basin . WGO and Strike Energy ( STX ) have a 50 / 50 J / V in this tenement and whilst the drilling and flow testing activity in the wells has been problematic due to over pressured gas zones and high pressure sand coming up with the gas giving the equipment a sandblasting , the question of whether they have found gas is not at issue . The unknown at this point is how much have they found . The discovery at WE-2 was enough to have the partners looking at the Phase 1 development of a 80 TJ / day plant and for WGO to sign a long term contract to supply Alcoa from 2024 . Final Investment Decision and financing is due . WE-3 stopped drilling short of the target depth due to over pressurised gas zones that needs bigger equipment to handle it . Importantly gas was found . WE-4 found gas in the expected zones along with an additional zone and recently they had to delay the flow testing due to the high pressure gas forcing up sand from 5 klms down . WE-5 is drilling ahead at present . From early June the WE-4 flow test will resume with the necessary equipment in place , followed by flow testing of WE-5 . An announcement on re-entering WE-3 with bigger equipment is also outstanding . June could be a busy month .
The market capitalisation difference between Strike and Warrego makes WGO a potential target . Strike has already been turned down once before ,
Page 10 of 22