CAG 0.00% 78.0¢ cape range ltd

cag/cagoa- green alert

  1. 258 Posts.
    The last few weeks I have been spending researching various companies. There were times when I felt that researching is a waste of time as the market seems to ignore all fundamentals and kept selling down regardless. I convinced myself though that that may be the case at the moment but in due course the market, once it has gone through the bad patch will have to reassess itself as to where it stands and in the long run must go back to fundamentals, to companies that have the potential to grow and provide a future revenue stream. So in a way the last few weeks have been good to be focussed on looking at what various companies are doing and assessing their potential over the next year, ignoring the current uncertainties.

    One company that I have been looking at is Cape Range. My first impression was that the market has lost confidence in this company on the basis of its track record in the last few years, many promises and many capital raisings later- nothing! Looking back at the past years years I have to agree on that view. I think the last capital raising was earlier this year- not good from the point of view of yet another raising but from cash point of view, at least cag currently has got cash going forward which will allow them to carry out their strategies without the need to raise cash in the near future.

    Having analysed their last few announcements and researching into their product line, I think cag has good potential. Their wireless technology seems to work well and has been tested to work. At least we don’t have to be too concerned that the technology is no good- that has to be one major step forward. On the basis that the tech works, then the company needs to assess what region of the world or potential users of the tech. Cag has been involved in the recent exhibition in Asia and it seems that the company is able to excite a number of companies and in the process is able to assess potential users and reghions of the world that it could flog its product. This is very encouraging- for those of you who followed mxe/mxl in its earlier days would see similarities. Mxe attended an exhibition to demonstrate its product and from there its client base basically grew- and share price did go from 3cents thru to 10cents+, before of course now settling below that level. Cag could effectively do that as if you read their latest announcement there were some 900 enquiries into their product. Firstly it must demonstrate that it does work and secondly it must be impressive as well as commercially viable for all these companies to be interested. On this basis even if cag could develop 10 of these potentials I can see confidence buit up in cag and hence an improvement in the price as well.

    In the meantime cag is further strengthening its hold in Malaysia and last announcement confirmed the 3rd contract there. This will bring in some needed revenue and will also form a reference point for future contracts. Once a product is proven to work, then it is easier to sell and it is then something tangible that could be shown off to potential buyers. Malaysia is a stable enough country to demonstrate initially the product (and further develop it) and be paid for it. I know that cag is also developing in another Asian country but I am more concerned with the other as many other non developed countries may not be able to pay for the services as well. In my analysis I have ignored and not taken into the consideration, in assessing cag potential, the viability of the product in the other country.

    From the trading point of view, cag low was the mid 3cents and a high of 7.8 for the year. At the moment it seems to be trading near its low. It was trading at over 5cents some weeks back and I can see it going back there to that level with potential new proposals (from the 900 enquiries) being announced. Over this year I can see it going beck to its high and perhaps settle closer to 10mark as people realise the potential. Following the capital raising earlier this year, there is also an option series, cagoa which expires in , cant quite remember but at least a couple of years time, so still fairly lengthy, and exercisable at 5cents. We are now at 4.2cents therefore if we think it will go over 5cents over the next few months, the cagoas are good exposure and leverage.

    I believe cag will be an interesting one to watch. Do the research and see if you agree with me.

    Bigprofit
 
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Last
78.0¢
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Mkt cap ! $65.25M
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Last trade - 10.02am 21/11/2019 (20 minute delay) ?
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