Market Recap: The Calm Before the Storm as Gold Surges to New Record

Good Evening,

Welcome to Equity Espresso’s Daily Market Recap. While the election announcement is sure to set off fireworks, markets will be getting their own explosive show next week with the RBA's rate decision and Trump's "Liberation Day" tariffs. In the meantime, we hope everyone enjoys their weekend before a wild April. Let’s jump in.

Local Market

Markets began lower in the morning session but recovered in the afternoon to finish slightly higher. The S&P/ASX 200 index gained 13.0 points (+0.16%) to close at 7,982.0, ending the week up 0.57%. Overall, it was a subdued trading week, with market movements of less than 0.10% on three of the five trading days.

Markets appear to be taking a wait-and-see approach, with next week already looking to be newsworthy. At home, the RBA meets on Tuesday, where it’s expected (92% probability) to keep the cash rate on hold at 4.10%. As usual, pundits will be hanging off RBA governor Michelle Bullock’s every word to get a feel for the next interest rate cut. Tuesday in the U.S. (Wednesday morning in Oz) marks “Liberation Day”, where a raft of reciprocal tariffs are set to be signed in by President Donald Trump. Set your alarms.

Today, gains were spread, with seven sectors finishing higher, led by Consumer Staples (+0.91%) and Energy (+0.81%). Technology (-2.16%) stocks were again hit hardest, following in the footsteps of the NASDAQ, with Wisetech Global (-3.89%) and Next DC (-2.66%) continuing their downward trend. Real Estate (-1.59%) stocks also saw sharp falls, with some trading ex-dividend.

Gold continues to shine, surging past $3,070/oz on Friday and setting a new record high. Oil prices are heading for a third consecutive weekly gain. Brent crude traded near $74/bbl after rising 0.3% Thursday, while WTI remained under $70/bbl.

Global Markets

U.S. markets fell Thursday as investors responded to President Trump's announcement of 25% tariffs on imported vehicles effective April 3, with auto parts duties following on May 3. The S&P 500 (-0.33%) fell, as did the Nasdaq (-0.53%) and Dow Jones (-0.37%), with eight of eleven S&P sectors closing lower.

Automotive stocks were heavily impacted, with General Motors (-7.34%) tumbling and Ford sliding 3.9%, while parts manufacturers Aptiv (-5.40%) and BorgWarner (-4.69%) each lost around 5%. Tesla (+0.4%) gained as investors viewed it less vulnerable due to its domestic production. Apple (+1.05%) rose, helping limit broader market losses. Trump indicated that these retaliatory tariffs would remain throughout his second term.

AppLovin (-20.1%) shares plunged, marking their largest single-day decline ever, after a short-selling firm, Muddy Waters, published concerns about its advertising practices. Muddy Waters claimed AppLovin is violating app store rules by extracting proprietary IDs from major platforms like Meta and Google to deliver targeted ads to users without consent.

The FTSE 100 (-0.3%) closed lower on Thursday, in line with most regional peers, as traders focused on Trump’s car tariffs. Chancellor Rachel Reeves addressed the media in Cardiff following the spring statement, calling US-UK trade talks a "delicate moment" but stressing that the UK has no plans for retaliation. Aston Martin (-6.66%) shares fell following the auto tariff news from the U.S.

Asian markets started Friday lower, with the upcoming ‘reciprocal tariff’ risk lingering over markets. The Nikkei was down by over 2%, with many companies trading ex-dividend as part of the fiscal year-end. Alibaba (+2.56%) shares rose on the NYSE after launching "Qwen2.5-Omni-7B," its latest open-source A.I. model.

Global Indices

U.S. Fear & Greed Index

Economic Data

• U.S. GDP expanded by 2.4% annually in Q4 2024, slightly higher than the 2.3% in the previous estimates.

• U.S. Initial Jobless claims decreased by 1,000 to 224,000 in the week ending March 22, marginally below market expectations of 225,000.

• The Mexican Central Bank, lowered its key by half a percentage point to 9.00% as inflation eases.

Outlook

U.S. futures indicate a slow start on Wall Street tonight, with the S&P500 (+0.07%) and NASDAQ (-0.03%) trading flat.

Some of the key economic news overnight to watch:

• Eurozone: Business climate index (March) & Consumer Confidence Index (March)

• Germany: Unemployment Rate (February)

• United States: PCE Price Index (Feb) & Consumer Sentiment Index (March)

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Company Spotlight

❗️ASX Company Announcements

A snapshot of some of the companies out with news today

• Westpac's new CEO, Anthony Miller, has outlined the next phase of the bank's $4 billion technology transformation initiative during his first analyst presentation. The Unite project will receive $865 million in funding for 2025.

• NRW Holdings has appointed Peter Bryant as CFO, who most recently served as CFO of Perth Airport Corporation.

• Downer EDI has secured a six-month extension to its estate management contract with the Australian Department of Defence. The revised agreement covering base management and transport services for defence facilities nationwide will run from August until January next year.

• Bellevue Gold has requested a voluntary suspension of its shares until Friday, April 4, 2025, to provide additional time to prepare and release an updated production guidance announcement before trading recommences.

• Corporate Travel Management has announced CEO Greg McCarthy will step down on June 30 after seven years, to be replaced by Jo Sully, who previously served as AMEX GBT General Manager and Regional Vice President.

• Incitec Pivot says weather events have significantly impacted its fertiliser and explosives divisions. Heavy Queensland rainfall affected Dyno Nobel explosives volumes, while southern drought conditions and Cyclone Alfred delayed fertiliser purchases by farmers. The company now expects a 35/65% earnings split between the first and second half for explosives and a 10/90% split for its fertiliser business.

• Gold Road Resources has released initial results from the Gruyere underground drilling program, confirming the ore body's depth extension.

Company Deep Dive

Mader Group Limited – Stock Deep Dive

Today, we look at an interesting company hiding in plain sight. We used Tikr to screen for companies under a $1.3 billion market cap, grew its Revenue, EPS and FCF by >8% CAGR in the last 3 years and is expected to grow in all three metrics over the next 2 years by more than 6%.

That gave us two companies, Mader Group and Clinuvel Pharmaceuticals. Today, we’ll look at Mader Group.

Company Overview

Mader Group Limited (ASX: MAD) is an Australian-based provider of specialist technical services for heavy equipment maintenance in the mining, energy and industrial sectors. Founded in 2005, Mader has grown into a global business servicing over 430 customers across 570+ locations worldwide. The company’s core offering is “tap on, tap off” maintenance support – deploying skilled mechanics and technicians to keep heavy mobile machinery and fixed infrastructure running optimally through in-field repairs, overhauls, preventive maintenance, and training services.​

Mader operates an asset-light model, which allows it to mobilise teams quickly across different regions. Mader has a workforce of over 3,200 and regional offices supporting operations across Australia, North America, Asia, Africa and Oceania.

Customer & Geographic Profile​

Mader’s main customers are mining and resource companies and related contractors. Its client base includes some of the world’s largest miners, including BHP Group, Rio Tinto, Fortescue Metals and CITIC Pacific Mining. These clients operate large fleets of trucks, excavators, drills and other heavy equipment that require regular maintenance.

In FY24, approximately 24% of the Mader’s revenue was from five key customers, and the top 10 customers accounted for approximately 33% of the company’s revenue.”​ Whilst no single customer contributed over 10% of revenue in FY24, the business does remain somewhat reliant on a concentrated base of large resource clients.

Mader has expanded to serve a diverse range of industries and geographies. Within resources, the company’s technicians work across multiple commodities – from iron ore and coal to gold, copper and lithium. In the energy sector, Mader’s dedicated Mader Energy division supports oil and gas operations (such as servicing natural gas compression equipment in U.S. shale fields​).

Mader’s largest operations are in Australia (where it services all major mining states) and North America. In the United States, Mader now operates in 37 states. It established a foothold in Canada in 2021 and expanded to 8 provinces. The company also maintains a “Rest of World” segment covering work in Asia and recently re-entered Africa by securing a 12-month maintenance contract in Zambia.

For FY24, the revenue split by region was as follows​:

• Australia: $585.7 million (approximately 75.6% of total revenue)

• North America: $177.8 million (approximately 23%)

• Rest of the World: $11.0 million (approximately 1.4%)

Financial Performance & Growth Catalysts

Mader Group has delivered strong growth over the past 3 years. Annual revenue nearly doubled from $402 million in FY2022 to $774.5 million in FY2024, a 27% year-on-year increase in the latest year. This growth has been entirely organic, reflecting a greater volume of work across all regions.

Heavy customer demand for Mader’s core mechanical services in Australia drove a 25% revenue increase in FY2024. North American revenue also grew 34% in FY2024 despite some softening in commodity markets. Here’s a snapshot of the FY24 financials:

• Total Revenue: $774.5m, +27%

• Australia Revenue: $585.7m, +25%

• North America Revenue: $177.8m, +34%

• Rest of World Revenue: $11.0m, +36%

• EBITDA: $99.2m, +32%

• EBITDA Margin: 12.8%, +0.5 ppt

• NPAT: $50.4m, +31%

• NPAT Margin: 6.5%, +0.2 ppt

• Net Debt: $31.2m, –27%

Future outlook and catalysts: Mader remains optimistic about continued growth. The company has provided FY2025 guidance for at least $870m revenue and $57m NPAT, representing roughly 12% growth on FY24. Management has articulated a five-year strategic plan (FY22–FY26) emphasising diversification by service line, geography and industry. By the final year, FY2026, Mader aims to surpass $1 billion in revenue.

One major growth catalyst is the ongoing demand in core mining markets: miners prioritise productivity and output, which supports outsourcing maintenance to partners like Mader. Another catalyst is North American expansion – after a period of consolidation in 2024, Mader’s North American segment has returned to headcount growth and is set to benefit from improving commodity prices and a large addressable market. The company re-established an operating presence in Africa.

Competitors

Mader Group operates in a competitive mining services landscape, facing a range of rivals from small local contractors to large multinational firms. Key competitors can be grouped into a few categories:

• Equipment OEM service teams: Original Equipment Manufacturers (OEMs) like Caterpillar (via dealers such as WesTrac in Australia) and Komatsu provide machine maintenance services.

• Labour hire and maintenance contractors: Several other contractors specialise in providing tradespeople and maintenance services to mines. This includes large mining contractors like Perenti Global (ASX: PRN) and Monadelphous Group (ASX: MND).

Stock Price

Mader Group’s stock price has delivered outstanding returns since listing, although with some volatility. The company IPO’d in September 2019 at $1.00 per share and trades above $6.00, reaching $7.50 in 2023. It hasn’t been all smooth sailing; shortly after listing, the stock dipped below the IPO price during the March 2020 COVID-19 crash.
As commodity markets recovered, Mader’s shares climbed steadily through 2021 and 2022, then accelerated.

Conclusion

Strengths

• Financials - Strong track record of revenue and profit growth and solid cash generation. Scaleable, asset-light business model with high returns on capital (ROE: >28%)

• Customer Base- A top-tier customer base, including BHP, Fortescue, and Rio Tinto, instils credibility.

• Tight Ownership - Over 70% of the company is held by insiders

• Operational Flexibility - Can respond quickly to changing demand in a historically cyclical sector.

• Strong Reputation - A reputation for providing a high-quality service, emphasising employee culture and safety.

Risks & Weakness

• Exposure to Mining Cycle - If commodity prices plunge or miners cut spending, maintenance service providers can see reduced workloads.

• Low Barrier to Entry - Highly competitive and can face pricing pressure from small and large competitors.

• Insourcing - Mining companies might hire maintenance staff internally instead of outsourcing, which could affect Mader’s business.

• Weak MOAT - The nature of mining services is that contracts can often be short-term or at the client's discretion. Low switching cost for a client to change maintenance contractors

Mader Group presents a mix of high growth and solid operations, with clear pros (market leader in a necessary service, global growth runway, strong finances) and cons (commodity exposure, competitive pressures, limited inherent moat). The company’s ability to navigate the mining cycle and continue its global expansion will determine whether it can sustain its impressive track record. If it does, Mader could increasingly be considered a standout mid-cap industrial. Any slip in execution could quickly erode its advantages. For now, Mader’s strategy of focusing on what it does best – keeping the world’s mines running – appears sound, and industry perception is that while its economic moat may be narrow, its operational excellence effectively serves as its moat in practice.

Headlines

📰 Local News

In his Budget Reply, Opposition Leader Peter Dutton outlined the Coalition's alternative economic vision, focusing on cost-of-living relief and government spending cuts.
Some key announcements include:

• Halving fuel excise for one year, followed by a review

• Implementing a "domestic gas plan" requiring companies to reserve gas for Australia's east coast

• Cutting 41,000 public service jobs to save $7 billion annually

• Reducing permanent migration from 185,000 to 140,000

• Virgin Australia and Qatar Airways have received final ACCC approval for their alliance, with flights to Doha beginning in June. Commissioner Anna Brakey confirmed the partnership would deliver "public benefits" through increased capacity and competitive pricing. The collaboration will introduce 28 weekly return services between Doha and Australia's major airports, with Virgin utilising Qatar's aircraft and crew under a wet lease arrangement.

 🌎️ Around The Globe

• 23andMe, the genetic testing company that collected DNA samples from over 15 million customers, has filed for bankruptcy and is seeking a buyer. This announcement caused website traffic to spike by 692% as approximately 1.5 million users rushed to delete their DNA information.

• Car repossessions in the U.S. reached their highest level since 2009, with approximately 1.73 million vehicles seized in 2024. This represents a 16% increase from 2023 and a 43% jump compared to 2022, according to Cox Automotive data.

• China’s tariffs could be reduced, Trump announced Wednesday, as part of negotiations to secure ByteDance's sale of TikTok to non-Chinese buyers.

• Ferrari has announced price increases of up to 10% on most of its models in response to President Trump's upcoming 25% tariffs on foreign vehicles.

🤖 All About AI

• China faces potential A.I. chip shortages as H3C, one of its largest server makers, has warned clients about limited supplies of Nvidia's H20 processor.

• ChatGPT's new AI image generator has sparked a viral trend of Studio Ghibli-style pictures across social media, with users creating images of popular characters.

Technical

Highs & Lows

A list of companies hitting 52-week highs/lows:

On a Roll

Companies on long winning/losing streaks.

Winning Streaks

• Perpetual (PPT) - 10 days

• Judo Capital - 6 days

• AUB Capital - 6 days

Losing Streaks

• HMC Capital (HMC) - 6 days

• Clarity Pharmaceuticals (CU6) - 5 days

• Digico Infrastructure REIT - 4 days

Brokers

Research Report - Amcil Limited (ASX: AMH)

Independent Research House has maintained a "Recommended Plus" rating for AMCIL Limited (ASX: AMH), highlighting its differentiated approach compared to sister companies through a concentrated all-cap portfolio. AMH has successfully achieved its objective of delivering above-market total returns over the medium-to-long term, both on a Net Tangible Asset (NTA) and shareholder returns basis. The company's portfolio typically comprises 30-40 stocks across large, mid and small caps, with a medium-to-long-term investment horizon resulting in low portfolio turnover.

You can access the report below:

Broker Ratings

• Macquarie has upgraded Paladin Energy to an Outperform from Neutral despite lowering its target price by 9% to $8.25. The broker notes that the acquisition of Patterson Lake South through the Fission Energy purchase has improved the company's asset quality, while the current share price discount compared to peers stems from management withdrawing FY25 guidance due to wet weather in Namibia and "disappointing" production at Langer Heinrich.

• Morgan Stanley notes that Reject Shop has entered into a binding scheme implementation agreement with Canada's Dollarama, with the latter acquiring it at $6.68 per share. The broker highlights that this price represents a substantial 112% premium to Reject Shop's pre-announcement price of $3.15.

A Little Extra

 ⬇️ Short Data

Top 10 shorted stocks on the ASX - as of March 22

The Insiders

Director buying and selling.
On-market and Off-market trades only.
Net Buy/Sell positions in the last 30 days

💵 Dividends

Companies which traded ex-divided today

1. Bravura Solutions (BVS)

2. Comms Group (CCG)

3. Rural Funds Group (RFF)

4. Dexus Industria REIT (DXI)

5. Dexus Convenience Retail REIT (DXC)

6. Centuria Office REIT (COF)

7. Centuria Industrial REIT (CIP)

8. Garda Property Group (GDF)

9. Charter Hall Long Wale REIT (CLW)

10. 360 Capital Mortgage REIT (TCF)

11. 360 Capital REIT (TOT)

12. Arena REIT (ARF)

🔍️ ETFs

Best and Worst performing ETFs today, min. $100m FUM

Top 5 ETFs Today

Bottom 5 ETFs today

The Last Word

Let us know what you thought of today’s newsletter 😀 

DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your own research before making any investment.