3 ASX Miners And Asset Manager Picks For Investors Seeking Balance Sheet Strength

Government bond yields in the US and Europe are sitting near recent highs, which puts more pressure on weaker balance sheets. Solid Balance Sheet and Fundamentals stocks stand out when borrowing costs feel less forgiving. These companies already show high return on equity, past performance and sound finances. This article highlights three stocks from the screener that may interest investors who want resilience without giving up quality.

The three stocks below are just a starting sample, and the full Solid Balance Sheet and Fundamentals screen surfaced 17 more companies with equally compelling narratives that are not covered here. If you want to move quickly from idea to action, head straight into the Solid Balance Sheet and Fundamentals screener to identify, filter and analyze the highest conviction opportunities that match your criteria.

Ora Banda Mining (ASX:OBM)

Ora Banda Mining is a Subiaco based miner focused on exploring, developing and operating gold and other minerals such as nickel, copper and lithium at its 100% owned Davyhurst Gold Project in Western Australia. The company currently generates all its A$554 million in revenue from gold production and exploration, entirely within Australia. Ora Banda Mining has a market cap of about A$2.53b, which places it firmly in the mid sized producer camp on the ASX.

Ora Banda Mining sits at the intersection of strong profitability and aggressive resource growth, which is a combination many investors often look for in a quality focused mining stock. High net margins and an ROE close to 60% point to an asset base that is working hard, while the significant expansion of resources and reserves at Davyhurst suggests the operation has room to run. The stock currently trades on a lower P/E than peers and below some fair value estimates, yet the business still leans on substantial external funding and carries high non cash earnings. For investors who can accept those funding risks, the mix of growth projects like Little Gem and rising reserves may warrant a closer look at what the market could be missing.

Ora Banda Mining pairs high margins with an ROE close to 60%, yet still leans on external funding. Before assuming that mix tells the whole story, review the 4 key rewards and 1 important major warning sign

Build your own high ROE shortlist

Ora Banda Mining and the other two stocks in this article all came out of a single Simply Wall St screener, but the real value is in setting your own rules. Use our flexible Screener to mix valuation, quality, balance sheet and risk filters, or start with any of our curated Investing Ideas that fit your approach.

Resolute Mining (ASX:RSG)

Resolute Mining is a Perth based gold producer focused on mining, prospecting and exploration across West Africa, with its flagship Doropo Gold Project in Côte d’Ivoire. The company currently generates about $539 million in revenue from its Syama mine in Mali and $326 million from the Mako mine in Senegal. Resolute Mining has a market cap of roughly A$2.4b, which puts it in mid cap territory on the ASX.

Resolute Mining combines improving profitability, high quality earnings and a stronger balance sheet with meaningful growth projects like Doropo and ABC that aim to lift production and margins over time. Analysts expect solid revenue and earnings growth, supported by high forecast ROE, while the stock still screens as deeply undervalued on some fair value estimates. The catch is that operations sit in higher risk jurisdictions such as Mali and Côte d’Ivoire, where permitting delays, tax frictions and security issues have already affected Syama output. For investors comfortable with that risk profile, the mix of expansion projects, unhedged exposure to spot gold prices and a cleaner financial position makes this a story worth looking at more closely.

Resolute Mining’s improving margins and cleaner balance sheet may be masking how much future production is already in sight. Review the analyst forecasts for Resolute Mining to see what the forecasts suggest about the next twist in this story.

GQG Partners (ASX:GQG)

GQG Partners is a Fort Lauderdale based boutique asset manager that runs active equity portfolios for institutions, wealth managers and high net worth investors across a wide range of fund structures. The business currently earns about US$808 million a year from asset management fees, and its market cap of roughly A$4.27b places it firmly in the mid cap bracket on the ASX. For investors, GQG Partners is essentially a pure play on fee income from managing global equities at scale.

GQG Partners pairs very high profitability, including an ROE above 100% and net margins above 50%, with a simple fee based model that turns a large asset base into cash flow. The stock trades at a steep discount to some cash flow based valuations and carries a double digit dividend yield, which may catch your eye if you care about income and potential re rating. The catch is that earnings and revenue are currently forecast to decline over the next few years and the payout looks stretched, so the income stream is not risk free. In addition, there is concentration around a founder led investment process. As a result, this is a business that looks powerful on the numbers, but still asks you to think hard about how much volatility you can live with.

GQG Partners’ large margins and double digit yield raise important questions about how durable this setup really is. Get the full story in the 3 key rewards and 2 important warning signs (2 are major!)

Seeking Alternatives Before The Crowd Moves

Fresh stock stories can move from quiet to breakout quickly. Momentum builds, prices start flying and latecomers get caught chasing. Scan these under the radar ideas while it matters and consider them while they are still relatively overlooked.

• Spot companies aiming for income potential with the curated 4 dividend fortresses before yields change and other investors focus on the same payers.
• Track early movers in digital finance by scanning the hand picked 19 cryptocurrency and blockchain stocks while many of these enablers of blockchain adoption are still off most radars.
• Explore growth tied to automation trends through the focused 37 robotics and automation stocks and monitor how demand for productivity gains may influence interest in these operators over time.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com