TRX Gold possesses two major attributes gold mining investors should be seeking. Firstly, it is ramping up production at their Tanzanian gold mines. And secondly, it is utilising cash flow from current production to pursue further exploration and upgrades to their assets.

TRX Gold Corporation (TSX:TNX) (NYSE American:TRX) operates the Buckreef Gold Project in Tanzania and is delivering on a strategy to increase their production capacity and overall resources in the pursuit of shareholder value creation.

Ramping up production

The $104m market cap gold miner invested $4m in mill processing facilities 12 months ago with the objective of increasing the original 360 tpd capacity to 1,000 tpd.

In late September, TRX Gold announced this target would soon be hit enabling TRX Gold to produce 15,000-20,000 ounces of gold annually over the life of the oxide mine plan.

Early success at the new plant saw TRX Gold hit a quarterly production record in the third quarter with 2,733 ounce of gold produced. TRX Gold also hit a sales record with 3,033 ounces of gold sold.

Increasing the resource base

Many junior gold explorers will be highly envious of TRX Gold’s position. TRX Gold are able to fund further exploration and the expansion of their resources with cashflows from ongoing production, a scenario many junior explorers can only dream of.

TRX Gold do not have to raise cash through dilutive secondary issues, nor are they being forced into a joint venture to facilitate development of their assets.

Funding further exploration through cashflows from operations means TRX is creating the most favourable scenario short and long term value creation.

This is of course reliant on the success of their expansion operations and upgrades to the resource – and the most recent results are positive.

Exploration activity at Buckreef Gold Project recently yielded an additional strike extension of 250 meters, representing 16% increase in the strike length of the Buckreef Main Zone to 1.8 kilometers.

TRX Gold are undergoing an intensive drill programme looking to expand 2020’s NI43-101 Measured and Indicated Mineral Resource of 35.88 MT at 1.77 g/t gold containing 2,036,280 oz of gold and an Inferred Mineral Resource of 17.8 MT at 1.11g/t gold for 635,540 oz of gold.

TRX Gold’s low cost production

Compounding TRX’s ramp up in production and expanded resource, TRX Gold are achieving a low cash cost of $508 per gold ounce driving gross margins of 73%.

TRX Gold generated $9.06m revenue in the nine months to May 31st 2022. Much of this was generated in the three months to May 31st with TRX Gold recording $5.7m revenue and $3.18m profit for the period.

TRX Gold’s comprehensive income for the nine months to May 31st 2022 was $28,000 due to higher share based expense.

Investors will be looking forward to TRX Gold’s full year results and the additional revenue from increased capacity at the Buckreef Gold Project.

Bunzl investors may be pleased to see strong levels of revenue growth at the international distribution and services group as both organic revenue growth and the impact of acquisitions helped a 18.8% actual exchange rate rise in revenue in the third quarter.

However, the revenue growth wasn’t enough to see Bunzl shares rise as they dipped 1.5% in the very early minutes of trade on Thursday.

A 4.3% expected reduction COVID-19 related products saw underlying revenue grow 6.1% and account for 10.4% of overall growth.

The group detailed the recent acquisition of Enviropack which generated £7m in the year to August 2022. Bunzl noted the acquisition was consistent with their strategy to boost the circular economy through their packaging operations.

“Our strong performance over the quarter continues to demonstrate the strength and resilience of the Bunzl business model, underpinned by our value-added offering for customers,” said Frank van Zanten, Chief Executive Officer of Bunzl.

“Our commitment to reliably provide essential products and innovative solutions to our customers, our diversified portfolio, and our compounding growth strategy are all factors which contribute to our expectation of continued resilience. I am also pleased to welcome Enviropack to the Bunzl family and our acquisition pipeline remains active.”

The FTSE 100 was largely flat on Wednesday as UK inflation hit 10.1% for the second time this year and a weaker pound provided some support for the FTSE 100’s overseas earners.

The pound fell as the Bank of England said they would indeed begin quantitative tightening 1st November, but wouldn’t sell long dated bonds initially.

“The FTSE 100 dipped on Wednesday as UK inflation came in a smidge higher than expected to match the multi-decade highs seen in July,” said AJ Bell investment director Russ Mould.

“Food prices were the major contributor to the inflationary surge, which will only ramp up the pressure on the Bank of England to maintain a hard line on interest rates ahead of its next meeting in November.

Early weakness in the FTSE 100 was bought into and the index traded marginally higher at 6,939 at the time of writing.

Interest rate expectations

Interest rate expectations have fallen back since Jeremy Hunt’s appointment but today’s inflation reading all but confirmed interest rates would continue to rise sharply in the coming months.

“Expectations for the peak in interest rates in 2023 have fallen back from their highs of close to 6% p.a. since Jeremy Hunt, the replacement Chancellor, rolled back much of the proposed fiscal loosening in the “mini” budget,” said Chris Acari, Head of Capital Markets at Hymans Robertson.

“At time of writing, markets expect the bank of England base rate to peak around 5.3% next year, while consensus forecasts suggest the bank may raise rates slightly less than this.”

Housebuilders suffered on Wednesday after bouncing from the mini-budget lows. UK banks were also under pressure as the higher inflation data suggested more households are facing financial difficulties going into the winter.

It was the weaker pound and overseas stocks providing support for the index at lunchtime on Wednesday with HSBC the top riser, gaining 2.2%.

GlaxoSmithKline, BAE Systems, BP, Shell and AstraZeneca were among the FTSE 100 heavyweights gaining on Wednesday and offsetting losses in domestic names.

Ocado shares are more than 70% down so far in 2022 as the favourable environment created by the pandemic disappears into the rear view mirror and consumers start to tighten their belts in the face of a cost of living crisis.

Investors in the online retailer enjoyed a monumental rally during the pandemic as Ocado customers number soared as a result of lockdowns and consumers spending more on their online weekly shop. Weekly order numbers have continued to grow to a record high of 400,000 per week in May, but the growth rate has slowed and people are spending less.

However, many investors see value in the Ocado solutions and technology business which provides smart platforms to leading food retailers globally including Coles in Australia and Kroger in the US.

The Ocado share price may appear attractive after a quick glance, but here we outline three important factors to consider before buying Ocado shares.

Ocado are loss making

Over the past decade, technology businesses have been able to get away with making a loss during periods of high growth as investors look forward to them eventually turning profit.

There is weight to the argument Ocado is still in this period of high growth – especially in their solutions business – but this may start to wear thin.

Ocado recorded a £212m loss in the first half of the year, but much of this was depreciation of plant and property associated with the rollout of their Ocado Solutions Customer Fulfilment Centres (CFCs).

Nonetheless, margins across Ocado’s retail business is tight and the rollout CFCs will be a cost for the foreseeable future.

Future revenue visibility

The retail business is highly cyclical and will likely suffer in any economic downturn. This has already been demonstrated in the first half of 2022 as revenue fell 8% to £1.11bn.

However, this is not the main source of future growth and investors will be watching the solutions and technology business mostly keenly.

Six new Customer Fulfilment Centres (CFC) came online internationally in H1 2022 to bring the total to 16 operation centres of 58 committed. Not only does this reinforce Ocado is still in a period of high growth, but provides clear visibility on future revenue growth.

Ocado will earn revenue from each new CFC and has the ability to add new modules to existing centres which would also increase revenue.

Ocado is in the process of establishing unrivalled infrastructure for the distribution food globally and investors will look forward to significant growth in revenue in the coming years as more CFCs go online.

There are also hopes the recent acquisition of Alberston’s by Ocado’s partner Kroger could lead to more CFCs being established.

Ocado is a potential takeover target

US private equity has long been eyeing UK supermarkets as potential takeover targets and Ocado’s partner Morrisons was acquired by CD&R for £7bn last year in a bitter takeover battle.

Although there has not been any specific reports thus far – and we stress ‘potential’ takeover target – the falling pound makes UK supermarkets more appealing to possible US bidders.

Ocado’s place in the UK market and global infrastructure certainly puts them on the wish for any potential acquirers.

Ocado Shares Valuation

As Ocado are loss making their are no earnings available for price-to-earnings multiples. Ongoing construction of CFCs mean next year profits, if any are made, will be minimal.

However, the construction of CFCs adds to Ocado asset base and book value. This makes Ocado’s Price-to-NAV an interesting metric. Trading at 2.3x NAV – which is set to fall as more CFCs come online – the value in Ocado is their infrastructure and value of this infrastructure, as opposed to earnings.