Buy, Hold or Sell with Adam Dawes | ASX Week

Bryce: [00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How you going? Alec: [00:00:30] I'm very good, Bryce can't wipe the smile off my face. Excited for this episode, we're joined by a returning favourite, Adam Dawes. Absolutely. He's back. And we're back with another buy, hold or sell. Bryce: [00:00:40] Huge episode, one of our most popular of the year. And we're fortunate enough to do it with him twice a year. So we're back this year. Partnership with the ASX Investor Day, which is a day designed to provide investors of all levels with practical tools and knowledge to help improve their investment strategy and build their investing confidence. Those of you in the Equity Mates community will know that we have partnered with the ASX Investor Day in the past and we're here again closing out another great week. It's been a great chance to hear from some of the some great speakers from around the country. Ren. Alec: [00:01:13] That's it. If you enjoy this episode and you want to hear more from the speakers of ASX Investor Day. Over this week we've released four other episodes. We spoke to Dania Zinurova from Wilson Asset Management, and Anthony Doyle from FireTrail. They both shared some of their top investment insights from around the world. We spoke to Lauren Jackson from Fidelity on the key megatrends driving global markets, and we spoke to Rachel White from Vanguard about the changing face of investing. Today we're speaking to Adam Dawes, but before then, if you love Adam, if you loved this week and you want to see all of these speakers and more in person, the good news is you can well, at least you can if you're in Brisbane, Melbourne or Sydney. Bryce what are the details? Bryce: [00:01:58] That's it. Well, Brisbane kicks off tomorrow 14th of May at the Sofitel. Melbourne is the 21st of May at the Grand Hyatt and then Sydney closing out with a big bang on the 28th of May at the Hilton. Alec and I will be there will have a bit of an Equity Mates stall. So if you want to come and have a bit of a chinwag, see Adam do his magic, then join us on the 28th, head to the ASX website to register your details and grab your ticket. Alec: [00:02:25] But look, without further ado, let's get into the episode because we've got a lot of stocks to get to now. Adam, you've been sitting patiently there.  Adam Dawes: [00:02:34] let me at it. Alec: [00:02:35] For people who aren't familiar with Adam, he is a senior investment adviser at Shaw and partners with over 20 years experience in the financial services industry. And Adam is the keynote. I don't know if you're actually the keynote, but he's a headliner every ASX Investor Day he host the buy hold or sell where people from the audience people there on the day can throw stocks out and get Adam's view. We obviously don't have a live audience here yet, so we've gone out to the Equity Mates community to get their stocks that they want to ask Adam about. The good news is basically every stock on the ASX came back. So what we've tried to do is narrow it down some stocks that are well known but you know in the news and then others that the Equity Mates community may not have heard of. So we want to introduce them to some new names. The great news is Adam can speak about them all. But first on social media, we said if people rated and reviewed our latest podcast, The Dive, that we would ask about their stocks first. So we've got ten companies to kick things off. Bryce You want to kick it off? Bryce: [00:03:43] Let's do it. Adam, welcome to the hot seat. Adam Dawes: [00:03:46] Thank you. I'm excited. Bryce: [00:03:48] This one's from Mick - buy hold or sell Healthia Ltd ticker HLA Adam Dawes: [00:03:52] Yeah. Look, it's an interesting one and we've got a lot to get through today, so we're going to be pretty quick, pretty brutal, and we'll just keep moving on. But yeah, it looks like an interesting business. Got 94 clinic's Mr. Foot Doctor and some physiotherapy clinics as well. But really, you know anything around those businesses it is they're they're roll up businesses so they basically go in try and get new, whether it's a vet or whether it's a doctor or a pet store or a podiatrist or physiotherapist. It's all about roll ups. And what they need to do is they need to make sure that they pay a good price or a good multiple for them to do that. So this one actually looks okay. It'd be a hold from me. It doesn't really excite me as far as, you know, sort of podiatry clinics, but I guess it's obviously a need there. But the risk is that they pay too much for some of these businesses. So they need to be really, really careful. And then for that, I think it would be a hold just to see how that goes. But it looks pretty interesting to me. It's one of the ones I had not seen before, so I did a bit of homework. Alec: [00:04:49] I loved that. Yep. Well, that stock may not have excited you, but this excited us. The company is exciting. Also, it was from Pat Lipinski. Shout out the Collingwood player. Great to see you're in the Equity Mates community but Calix. Yes, yes. Adam Dawes: [00:05:06] Yes, yes, yes. Alec: [00:05:08] Yes, yes. Adam Dawes: [00:05:10] Fantastic business. I've been in the media for many years talking about this one and. This one has done very, very well. Look, it's a good ESG, so an environmental social governance business. But basically, it is has technology. And one of the main roots of the technology is to to take heat out of cement production. Now, obviously, there's a lot of cement being produced around the world as one of the biggest carbon polluters and obviously has a very large footprint. These guys are able to take that heat out. And it is a solution. It's not rocket science. Please, Calix, I love you. I love the business. A very, very good business. This one is fantastic. With the latest pullback back, it looks really good down here. I'd be buying this one. We really like it. We've got a buy at Shaw and partners. Yeah. Keep going with that one. That's a great business. Alec: [00:05:54] And I think we should say we're also buying the tagline, best corporate tagline, in my opinion, because Mars is for quitters. Adam Dawes: [00:06:00] This is all they wear. So yeah. Alec: [00:06:03] Absolutely. Bryce: [00:06:04] So this next one's from Bo Nitro Software Ticker. Enter. Adam Dawes: [00:06:08] We've got a bar on that one as well. It's Showroom Partners, so I'm going to stay with my analysts on this one. Well, this one is it's all about PDFs and e-signatures DocuSign, those kinds of things. Now, Adobe does this. There are some very big players in the US. For me, this one is is a buy. But I'd be cautious. I'd be trying to buy the US. I buy Adobe over this one due to the fact that it's like the third player in the space. I do like the e-signature side of this business. I'll stick with Shor's. It's been pretty hard done by at the moment, so there is certainly value in the tech space at the moment. Just be a little bit careful with this one. That's probably got a little bit more downside to just keep an eye on that one. But I'll stay with my research analysts and stay with Abi as well. Alec: [00:06:48] I think the theme of some tech being sold off is going to be a recurring. Yes, but let's keep going. Next one is from Daniel, the company I haven't heard of, fiducian group. FID  Adam Dawes: [00:06:59] Yeah, I do. Yeah. So they're basically financial planners and we've got another one coming out which is IFL, which is to be I f but fiduciary in a small little business they've got around about 66 planners across 46 offices around Australia. This is an interesting one as far as they just got the People's Choice Credit Union, which is added another sort of 3.4 sorry, 1.1 billion of funds under management. They've got about 4.8 billion at the moment. So it's actually held up really well. It's got a funds management business, got a platform business, and it's got financial planners in there as well. I'll stay with a hold on this one because I think financial planning as a as a business is very, very tough. And there is more royal commissions to come. There'll be more things to go on this one. But if you have it, I would definitely hold onto it. And any weakness at around that sort of $7 mark, you would definitely stick a buy on this one. But it's a tough business being in financial planning at the moment. So would be a hold for me on that one. Bryce: [00:07:55] Nice one. So this next one is from Ash and they're looking for a buy hold or sell on adairs ADH. Adam Dawes: [00:08:02] Yeah, so this is an interesting one because the government came out with the budget and basically gave pensioners and gave low income earners another $250. Now that doesn't sound like a lot, but you times that by many, many, many people in the in the in the population. And that's a fair bit of a swing for for the government to do that. But Adairs is one of those businesses that will take advantage of the lower cost group, not investor but a buyer. So it is is sort of more cheaper household goods, those kinds of things. And so they do sort of decorations, they're a retailer and those kinds of things. So I think they'll benefit from the government spend and they'll benefit from a lot of that, you know, going forward. So this one, I think that you'll be okay. We really like there's a couple of other business in there. Super retail group I think is probably a better one. And we're going to talk about Kogan and City Chic. So for me, I think this one is a hold again because it is at that lower end. We want to see that premium market going forward a little bit further. But yeah, for me it's a hold on a days. Alec: [00:09:03] So Adam, we'll keep ripping through this, Tom asked about Fortescue Metals. Right. Adam Dawes: [00:09:11] So what's not to like about iron ore. Hey, everybody was not it wasn't a lot not to like about iron ore. So overall, you know a couple of years ago Fortescue all in cash cost was about $16 to produce a tonne of iron ore. Now they were doing 188 million tonnes. Now it's costing them around about 20 bucks to sort of do that. Some cost pressures have started to come into the business. So that's been a really, really tough one for Fortescue. But still at $20 when iron ore is in at $150 a tonne and they're doing 185 million tonnes per annum, you do the maths, there's not enough zeros on the calculator to find how much profitability that's going to be. But the first thing that I need to do and push to everybody, that obviously is going to be a very good dividend coming forward. But everybody repeat after me, do not buy a resource stock for a dividend and potentially your audience doesn't like too many dividends, but we never buy resource stocks for dividends. However, the dividends will be very, very good for Fortescue, BHP and Rio going forward. They will always do well. Now Fortescue is definitely moving into the hydrogen space or into the more sort of. In our energy space. I think they need to diversify because the risk is with Fortescue is that they've got one customer and one product iron ore and China is their only customer and we've seen over the last couple of months, weeks that the market has a little bit of a split. If China turns around, has some slower growth numbers. So be cautious on Fortescue. It's definitely a buy all day long because if those costs at $20, they're making for $150 and they're pumping out 185 million tonnes per annum, it's definitely a buy from me. Alec: [00:10:42] I know that we are sacrificing companies to ask, but by doing a follow up. But I have to ask it alone as well. You say don't buy resources companies for the dividend. What's the logic behind. Adam Dawes: [00:10:52] The logic is is that commodities move in cycles. Okay. And when commodity prices are moving higher, that means share prices are moving higher. But also that means more cash that the resource companies have in their back pocket to then give back to shareholders. But we know iron ore, we know coal. We know oil three years ago was -$20. Yeah, iron ore was definitely nowhere near 100 bucks. It was 80, $60. Now, even if they're making them at $20 a tonne, at $60 a tonne, they're selling it in the open market. That's still not great. And it means there's still costs and they can still produce a good dividend. But the reason is, is that that cycle that happens is like a clock. Yeah. And potentially they might hit 12 and then all of a sudden you're buying this thing for a dividend, which isn't going to be there. Alec: [00:11:38] Yes. CBA and Woollies, a lot less cyclical very much than a racehorse. Adam Dawes: [00:11:43] Very much so. Alec: [00:11:44] I Bryce let's keep a rolling next. Bryce: [00:11:45] One from Jordan. Ava Risk Group. Adam Dawes: [00:11:48] Ava I mean, it's an interesting one, this one because I think they've changed their name. I think they were F, C, T or FTC when they first listed. But it's a business that does logistics but also sells fibre optic intrusion detection and location systems. It everybody get that one. But basically it's they detect and locate perimeter intrusion. So you've got a big fence around your big warehouse and then someone tries to come in and snip the fence to get in to try and steal your stuff. There's automatically there's an alarm that gets set off straight back to base saying that somebody is doing that or trying to get in oil fields or oil pipelines. You know, people like to protest about oil and then potentially someone's, you know, hacking in to take some oil away, all of these kinds of things. So it's an interesting business has struggled previously in the past. There's some brokers out there with a 33 cent price target on it. I think this one is probably a hold unless they can really show us that. I mean, obviously the technology works. They just need to get some really big contracts. And I think that one would be one that I would be cautious of going forward. Alec: [00:12:50] Next company from Sean Megaport MP1  Adam Dawes: [00:12:53] So this is a yes, it's a buy. We've certainly seen in the last coming couple of weeks the tech stocks getting absolutely belted and there is certainly value in this one. Megaport came out with their quarterly just the other day saying their earnings and there was a little bit of a misstep in their tech services side of things. But Megaport is a business that connects people to the hub or connects people to online or connects people to the cloud. Now, if you go to Telstra, it can take you up to three months to connect to the cloud. These guys can do it in 30 minutes, right? So this is their differentiation and they have a very, very good business. It is getting thrown out with the bathwater as such. At the moment we think that their fourth quarter revenue is should improve slightly and then it should be back on track by 2023 going forward. So I think this is a great opportunity to look at buying Megaport around these levels. Bryce: [00:13:39] Nice. So this one's from Sharley beauty retailer BW X. Adam Dawes: [00:13:43] It's an interesting one. We've got a buy on it. And so I'm going to stay with our show and partners research. The headline is currently on sale, 40% of our price target. Okay. Anyway, that was Basically we've got a price target of $4 on this one. BW X is a business that owns brands like Sue, and I think it's because you can skincare products, those kinds of things. Now, it was really interesting the other day our analyst did a bit of a tour around Australia with BW X and talked to a lot of the key chemists, basically Terry White Chemist Warehouse on Priceline and things like that. And so they're saying that those products are still really selling quite well, so those profit margins are still going to be there. So I'm going to stay with ABI. We've actually got Chemist Warehouse coming in in a couple of weeks. They might be IPO ing soon. Okay, everybody, have a look at that one. You always look at the number one business in the space first and chemist warehouse is definitely number one. So that'd be a really good IPO or a good buy if it does come to market. Alec: [00:14:46] Chemist warehouse is in the top three retailers in Australia. Yeah, yeah. Bunnings, Kmart. Adam Dawes: [00:14:51] But yeah. So it'll be it'll be a good coup if they can come to Mark has always been a private business. Yeah so yeah be good interesting. Alec: [00:14:58] And BWX also owns 50% of Go-To Skincare from Zoe Foster. Blake. Oh, there you go. Yeah, yeah, yeah. Adam Dawes: [00:15:05] I'm learning something. Well. Alec: [00:15:07] The only thing you're going to learn from this episode. All right, we've got one more in this space. To start things off. Insignia, financial, IFL. Adam Dawes: [00:15:16] Right. So we talked about fiducian in being another financial planning business. This is the number one in the space. Okay. So I was buying some of this today. I think this is a good value. The only reason why I'm saying that it's a buy is because it's number one in its space and it's got a truckload of funds under management. These guys go around about sort of just shy of $100 billion of funds under management. And this is why, because they are the biggest in the baddest in the industry. They've got instead of fiduciary has got 66 financial planners. These guys got 1600 financial planners. So this is the sort of the scale and the size and they obviously offer a fairly good dividend in there as well. So look, I think that's a buy from me IFL or insignia used to be either by the way, if they just bought MLC, which is very large platform which is giving them lots of fund inflow at the moment. But yeah, really, really keen to stay with ifl as the number one player in the space. Bryce: [00:16:11] Nice. Alec: [00:16:12] So that brings us to the end of the space around. To start things off, we want to say a massive thank you to the Equity Mates that went and rated and reviewed. The dive will move. We've sort of grouped companies into sectors from here. But I've got to ask Adam, seven buys three holds from the first ten companies. Yeah. Where do we find the money to buy all these stocks? Adam Dawes: [00:16:31] Well, yeah, you got to sell some of your dogs. And we're, like, talking about. It's like gardening. Yeah. You pull out the weeds and keep the flowers growing, right? So you always get rid of the stocks that aren't performing. That will give you the capital then to buy something that's going to perform better. Nice. Bryce: [00:16:47] Yeah, nice. I like that. All right. Well, let's jump in. The first grouping is a couple of just, well, knowns to kick us off, and that's Qantas airport chaos at the moment. Adam Dawes: [00:16:57] Yeah, absolutely. We're looking at Qantas is an interesting one and I'm going to reserve my judgement. Usually I'm not a huge fan of airlines. It takes a lot of people to get you on to a plane. You know, obviously even with online and everything else, that it still takes a lot of people to get you there. But as of June 30 this year, what's happening with Qantas as well as Virgin? But Qantas is their hedging runs out on a lot of their fuel. Right. So they're able we saw Rex up their prices by $10 to take it example of that fuel excise. But what's happened with Qantas is they've hedged those numbers out for a little a lot longer. So they're able still to keep those prices quite, quite low. But as of June 30, when these prices or these hedging starts to finish, you watched those prices start to move with oil at $100, $110. It's really hard for everybody to get on a plane cheaply. And that's the whole idea of airlines. They are always undercutting everything. I'm comfortable with Qantas and if you wanted to buy an airline, it's probably one of the best in the world, best managed in the world, but I'll be cautious after June 30. So I'm going to say it's a hold because that hedging does run out and that's going to put some pressure on those over all those domestic as well as international flights. Alec: [00:18:06] So another company that has got a lot of the Equity Mates community talking zip was z1p changed its ticker to ZIP. Yep, are down what, 85% in the past year? Yeah. The big takeaway from Afterpay is you've got to know when to sell because they sold at the right time. But it. Yeah. What are your thoughts? Adam Dawes: [00:18:32] Well, if you go back and look at my last Equity Mates podcast, I was saying this is a buy. Alec: [00:18:37] Oh, no. Adam Dawes: [00:18:39] And look, we're not we're not a no one's perfect. Again, it shows you that you really should be in the number one position, Afterpay or Square or whatever it's called, whatever it's called. Now that you should be in that number one position. And number two. Number three. Yes, they do. Well, now, ZIP is, you know, is struggling at the moment. But if you actually look at the numbers, 82,000 merchants are 11 million customers transactional. I mean, just just those two metrics alone, like a bank would love that kind of database. Like it is just amazing to see that it's all there. They kind of now integrate Sezzle into it, and I think they're sort of clutching at straws a little bit here to sort of because they were already in the US and it's just sort of yeah. So I just be really cautious on that. I think the buy now pay later sector has definitely moved and the story has definitely played out. It's got a lot to do with rising interest rates. As rising interest rates come, more defaults start to come and people can't spend as much money and hence that discretionary spend comes back as well. So look, I'm going to say hold, I got it wrong. I took some up on the share purchase plan. I'm wrong. I'm wrong on this one. And look, there will be better times. There will be better times. This because the database, the transactional volume is still not making any real money. And that's the problem. They've got a lot of transactional volumes, value making, 140 million, something like that. It's just it's just not getting there at the moment. But there will be a time for this thing. So what if we talked about Warren Buffett before, but he always says buy things when nobody else wants it. Nobody wants this at the moment. Right. So potentially it could be a buy. I'm going to. Stay with home because if you've got it, you might as well. If you didn't sell it at $14, you shouldn't be selling it down here at $1 ratio. Alec: [00:20:18] Yeah, we often talk about surely it's primed for a takeover like a PayPal, maybe even an Apple. Every tech company that sells off, everyone's like, Well, I should just buy it. Yeah, I'd like to see Blockfi down. Adam Dawes: [00:20:32] Well, I mean, the customers there, I mean, you know, potentially that would be a great synergy. But the problem is most people that have got a block account have also got a zip accounts and potentially that they're spending more on block than they are on zip and zip might be the second one in place, but we no harm. You know, there was a lot of these players and there's got to be some more consolidation in the industry. But yeah. Yeah, it's it's a hold. Bryce: [00:20:57] Yes. Alright, well, let's move on. So we've got resources now. It's not a sector that we often speak too much about, leaving it to the experts. So we've included a few companies here. Just briefly, Adam, what are your thoughts on the sector at the moment? Anything that you really like or dislike? Adam Dawes: [00:21:13] So commodity prices are moving in the right direction. Russia and Ukraine, everything is moving in the right direction. And Australia has been again has been wrapped up in cotton wool because we've got so much commodities and commodities that are growth engine but also a defensive mechanism. When Russia attacked Ukraine, oil went for a ride. Russia Ukraine is like the fourth largest producer of a lot of commodities. And so everybody then coal, everybody came to Australia and said, can we get your call? And we're like, sorry, we've we've got nothing left. And so hence the commodities. Now commodities is all about supply and demand. So if demand's high and supply is low, prices go higher, vice versa. If there's supply, lots of supply and lower demand, prices go lower. But at the moment, there's lots of demand for commodities. So really, really comfortable. But stay in the big end of town, don't go into the small space. BHP definitely with the demerger of Woodside at the moment it's going to be fantastic and that will do very, very well. So I saw, you know, BHP was $54. Now whatever it is, it's, you know, it's had a big whack on this raw milk of value in that. So BHP, Rio and Fortescue were my top three picks in the resource space and we can go into gold and everything else and copper, those kinds of things. But generally my thoughts on the sector is will continue to do very, very well over the next 3 to 4 years. Bryce: [00:22:30] Yeah, nice. Alec: [00:22:31] So we've got a couple of smaller names that the Equity Mates community asked about because who doesn't love a mining spec? One that came up a few times was core Lithium CXO. Adam Dawes: [00:22:40] So yeah, so it's an interesting one because the market got really behind this a couple of years ago or even a year ago, and it's gone on an absolute tear. So it's done very, very well. But one of the things that we saw in March this year was the resignation of the managing director. Stephen begins now. He's been with this company for many, many, many years and it was a real surprise to us as to why. And we still don't know why he's left the business. The stock actually rallied quite, you know, sort of 20 to 30% after he made that announcement. Now starting to come back and some realisation or rationalisation has come through in a little bit of a extra pick for you on this one. Stephen Biggins is a very, very well known director. He's gone to a small little stock SLB so have a look at that one, everybody. He might do some quite well on that one just IPO about three weeks ago. So that's a little bit of an extra one there for you because lithium I think is going to do okay, minus the director resigning. I'm always worried about when directors just sort of disappear or don't have a succession plan. That says to me that there's some fighting in the boardroom level and potentially there might be some issues. So I'd just be cautious with this one at the moment. Six So it's good business. It's got some great northern tier in South Australia and gold, iron ore, silver and obviously lithium, which is a big one at the moment. Remember, lithium is not rare, lithium is everywhere. Speaker 1: [00:24:03] Okay. Adam Dawes: [00:24:04] So everyone's getting excited about these battery technology and everyone's getting excited. But lithium isn't is an infinite resource. There is a lot of it around, so just be really careful. We don't know if everybody remembers a couple of years ago when the lithium story was running and then all of a sudden the Argentinians just came out and turned the tap on supply and demand and just flooded the market and the whole thing just went crashing down. So just be a little bit careful in that lithium space at the moment. But the demand is very, very good and the battery technology is very, very good. Bryce: [00:24:32] Also nice. I like that. So we have plenty more to come. Health care, retail, media, fintech, plenty more to go. But we want a bit before we jump into it, Adam, we're going to take a very short break to hear from our sponsors. All right, Adam, the hot seat continues. And health care. Let's just crack straight into it. Mach7 Technologies M7T. Adam Dawes: [00:24:59] Always look for the leaders in the space. So really, you know, in health care, we really should only be looking at ResMed, CSL and Sonic Health Care. Ramsay Health Care just got a takeover bid the other day. So they really are the three biggest companies and you really should be looking at that for me. Any of these other ones that we're going to talk about. So I'm going to say it's a sell. I just don't think you need to be there on this one. And the other one that we've got is Bain Tree Holdings as well. Both of them, I think, aren't fantastic from my side of things. I think that it's going to be a sell for me. I want to stay in the big end of town because these businesses do travel overseas or work overseas. You got to worry about what's happening with the Aussie dollar at the moment. We did see the price appreciate and the Aussie dollar which when they repatriate that money back into Australia that means they don't get as much when a higher Aussie dollar, obviously a lower Aussie dollar does well for these kinds of businesses. So I just don't think that you need to be in this small space. It's been a really tough space. I was speaking to a fund manager today at lunch and he was like, Oh, my small cap, you know, biotechs, small cap stocks, I'm getting burnt. So I don't think you need to be there. I think you need to be in the top end of town. Alec: [00:26:06] Well, let's let's move to another sector, which has some big players. But the big players weren't the ones that the Equity Mates community asked about is retail generally. Any thoughts on the sector? And then we'll get into some of the specific stocks. Adam Dawes: [00:26:20] Yeah. So the stocks that we're sort of talking about today are going to be more of, I guess retail being sort of close, those kinds of things because retail can be consumer staple, consumer discretionary, and there's lots in there at the moment. So let's stay with that sort of closed sector. It's all about the online businesses because of COVID and what's happening. Yes, you hear COVID the word lots and lots of times, but the general effect that it's happened in the street traffic now street traffic's back, but the general effect is really slowed down and online has obviously done very, very well. So generally I think retail is very, very good. Premier Investments is probably your number one pick in that space, just jeans, smiggle, those kinds of business. I think you really that that's that's sort of where you want to be if you want to sort of supply in this retail space. But I do like the next stock. Bryce: [00:27:11] Which is City Chic CCX. Adam Dawes: [00:27:13] This one is absolutely been belted. Yeah, absolutely been belted. And I think there's some real value here and probably coming down to sort of every two year lows at the moment. One of the things that that as the reason why it has been hit is that it's store sales or growth has been negative for the last two. The revenue is sort of by half has been down sort of 16%, online sales are up 72%. Right. So that's that's sort of exact analogy. We're talking about the online businesses. I really like this business. I think this has got a long way to go. It's got the Americas in there, it's got them, it's got some fantastic stores. It's got Europe, Australia and the Americas as well, and we've got a great online presence. I think it's been unfairly traded down there. So it's a buy from me. Love it. Alec: [00:27:57] Well, speaking about companies that have sold off, this company is down 80% from its 2020 highs. Yeah. Kogan KGN. Adam Dawes: [00:28:06] It's a tough one, isn't it, because everybody loves it or everybody does love it. I think, you know, they've done really well. They've done really well to expand their database doing insurance. I think they did something with QBE.Yeah. Yeah. So like, you know, he's got a share of your wallet. Okay, so if you go and buy a TV, he's got your account details, he knows what you're doing. So then he can then get more of that share of your wallet. Now discretionary spend might be 5% a year, but if you can get 15 to 20% of the wallet, then I think it looks, looks really, really good. The problem is the thing has been absolutely belted and the confidence I think in the market isn't there. Most analysts are downgrading their price targets from sort of the highs that I saw was about nine bucks and the lowest is about 570. So there's a big range. And when analysts have that big range of price targets, they don't know what's going to happen either. So I think it's really, really important that you be careful with this one. I think potentially there might be a time when you could start to jump into this one. But at the moment, I would say it's hold or close to one avoid until you can get some real confirmation on that stabilisation of the of the stock price. The business is fantastic. He's done really, really well. We always knew he was a seller. I don't know if he's a seller anymore at these levels. That's the problem. So I'm a bit cautious on Kogan at the moment. Bryce: [00:29:33] We're continuing with the trend of retail stocks that have been absolutely slammed. We'll move to Cettire, which is also down over 80% since November 2021. This one sits in my portfolio, unfortunately, buy hold or sell. Adam Dawes: [00:29:50] It looks okay since it sits in your place. Speaker 1: [00:29:53] Not unlike. Adam Dawes: [00:29:54] I think it's a sell right? Right. Because I'm the moat when we talk about a moat is and everybody hopefully knows what a moat is, it's the defensiveness of the castle, the water that goes around it. It's moat isn't very large. Very large. It's a retail luxury goods retailer online offering clothes, shoes, bags and accessories. I mean, but, you know, there's thousands of other websites that are doing a clinic. Everybody everybody's doing that kind of stuff. So the moat isn't there. The reason why I think it's a sell is that Dean Mintz, the former Fast Story, the founder and CEO, sold 35 million shares in this business just a couple of months ago, and that represented about 9% of the company. Now he owns 51% of the company, so he's absolutely within his right to sell some stock. I mean, we've all got, you know, sort of have a living, that kind of thing. But he's then also turned around and said, I won't sell anymore until the full year, 2022 results, which is going to be the 31st of August this year. We know that is a seller in the market. Yeah, we know there's an overhang and that's why it's a sell because there's a very large so that we know he's he wants to get out, he wants to do some more. And that's what's destroying the share price at the moment. No Moat, founder wanting to get out. I think it's time to sell Alec: [00:31:09] Yeah love that. Well love that explanation. Let's move to a sector that doesn't get spoken about a lot, but a sector that we're in here. Media are two stocks that were asked. The first one, Market Herald, TMH, and people may not be familiar with it, but it owns Hot Copper, the forum. So buy, hold or sell and careful you will get flamed in Hotcopper. Adam Dawes: [00:31:35] I know it's a bit of a tough one. Look for me Hotcopper is not all covers serves a purpose, but you've got a lot of uneducated investors trying to do some educated analysis. So I'll be really cautious on that. They're one lawsuit away from closing this thing down. The Market Herald is another website that they run. It's a good little business as well. I'm surprised how well they actually the business has done. It's actually done okay. But I'd be cautious. It would be an avoid from me on that one. Bryce: [00:32:04] Well, then we've got a random grouping, but there's no other way to group it. We've got fintech payments and gambling all in one. Alec: [00:32:10] It was very good. The combination of knowledge and money will make another sector. Bryce: [00:32:15] Yeah. So if you're listing ASX new sector on the horizon, it's a well-known stock, one that we use here in the business Xero. Adam Dawes: [00:32:25] So it's a yes, it's a buy from me under $100 at the moment. I think it's a buy. These guys have done very, very well. They're a fantastic business. They've got more of the wallet share now. I use business. I use zero in my business as well. Once they've got your data in there, once you've got your payments in there, you ain't going anywhere so sticky, you ain't going anywhere. And then in fact. Bryce: [00:32:45] Subscription here and. Yes, that's right. Adam Dawes: [00:32:47] And then they've got AI technology to do those new subscriptions to get you to say, oh, well, you've got extra cash in your balance sheet. Why don't you look for a business loan or you know they can then add services on their Xero is a fantastic business it's it's all day it's gone from 150 bucks. It's below 100. It's getting thrown out with the tech sell off at the moment. But they do make money. It is a very good business and it's growing rapidly. So it's a yes from me. Alec: [00:33:14] So Bryce introduced Xero as a company that we use in the business. This is a company that Bryce uses in his spare time, Aristocrat Leisure, but also not true. Adam Dawes: [00:33:27] Aristocrat has been obviously unfairly treated as well, I think at the moment. So it's a buy from me. It's got the market power to do a lot. Aristocrat obviously is a business that it started out with pokies and gambling and those kinds of things then moved into social gaming. Now social gaming is obviously a lot of people do it. I don't understand it, but they get an account and they'll play the pokies on their mobile phone and you see the people on the buses with flying these things. And you know, I sort of scratch my head, but social gaming is massive in the US and has done very, very well. The stock's been absolutely belted as well with all of this technology stuff going forward. I think it's looking really, really good at the moment. As a buy, I'd be really comfortable to sort of start picking some of this up around that sort of 36, $35 mark. Do remember that the Aussie dollar, if any strength in the Aussie dollar is negative for these guys. So we've got to be a little bit careful. But the Aussie dollar has started to come off a little bit and if it does fall back below that sort of $0.70 and continue to go back to $0.50, this one will scream higher going forward. So yeah, really comfortable with Aristocrat. It's a great business. Bryce: [00:34:31] Awesome. And then to group two together. Pointsbet and Betmakers. Adam Dawes: [00:34:35] Yeah. Pointsbet. Hey, I can't work out. I mean, yeah, this is another one that's been hit really, really hard and they came out with their third quarter results the other day. They said that they're not going to pay a dividend. The revenue was 139 million, which was up 85% for the year. However, they had a net loss of $146 million, which was up 71% on the year. Right. Extra revenues going higher, but your profit is going low. Orders that say they're spending a crapload of money out there and that's exactly what the problem is with this business is that they are spending a lot of this money getting new regions on in the US, getting new markets, putting out casinos, but having in the US each state has their own regulatory issues and they have to go through via each state 52 different states with 50 different laws to go through to get that it's going to cost a truckload of capital to do that. I'll be cautious on this one. It would be an avoid from me because of that extra money that they're having to put in. But once they sew up the US, I think this is a really good business. So it's not a sell, but it's in a void. Yeah. So it's a hold if you got it. But don't buy any at the moment. Alec: [00:35:43] Yeah. And the challenges, they're also navigating it with a lot bigger like European Flutters of the world and. Correct. Yeah. Adam Dawes: [00:35:52] One good thing about Pointsbet that I did read was that Apollo Group was basically looking at talking about because they just bought Yahoo Sports and from Verizon and that was a $5 billion deal. And they're actually looking to consolidate a lot of these sports betting companies. And Pointsbet is definitely in their sights, so potentially there might be some US interest on this one. That's why I'm saying hold it, but I wouldn't be putting new capital into it at the moment. Alec: [00:36:20] And the other betting related company Betmakers. Adam Dawes: [00:36:25] So I like this business and the reason why I like this business is because it's the back end of the betting technology. So when you place a bet, who does the spreads, who creates all those numbers that you when you make a bet that it actually yeah so it's used to be bookmakers back in you know back in the day when you were at the racetrack and he didn't even know all the horses. He never everything. Well these guys are the technology that sits behind the online gambling. So it's the picks and shovels of the mining sector. This is the pick and shovel of the betting industry. So this one is a buy from me. It has been hit pretty hard. Yeah, it's a good business and I like that sort of back end side of it versus the front end. So yeah, that's. I like it. Alec: [00:37:06] Nice, nice. One more in the payments space. Adam Dawes: [00:37:09] Tyro payments unfairly treated as well. I think Tyro every time you tap your card, it uses the payment system. Tyro is the payment system that links that tap of the card to the bank. So it should do really, really well. One of the things that Tyro has happened in the marketplace is they've been too forthright in giving information to the market. So in other words, updating the market too much, who would have thought? Right. So sometimes it might be alright just to hold back a little bit and have a bit of mystery. Yeah. With your lover. Yeah, yeah. Mystery versus knowing everything about your VCE date. So yeah, I think they're learning a little bit inside and how to sort of talk to the market a little bit. Costs are rising, but the metrics behind it, we're going to a cashless society, you know, we're tapping every day, you know, so it should do well. I'm going to say it's a buy. It's been unfairly treated. I've been sort of talking about this one for a while and saying it's a buy and it keeps going lower. But I think, you know, it's got a great business and the technology behind it is solid and we're moving to a cashless society some say by. Bryce: [00:38:12] Alright Adam six to go, 6 minutes left. All right. Let we do it. Let's, let's close it out first one Audinate AD8. Adam Dawes: [00:38:20] So this is a buy from us at Shaw and Partners. However, one of the things that's really struggled with this one was supply chain issues, because semiconductors, the whole idea of audinate is it is a very good business. It's moving audio cables to digital. Yeah, right. And so massive train stations, warehouses, sporting arenas are all still on cables, you know, red and white cables going in and the yellow one for video, but red and white. Yeah, that's what's happening. So ordinate is, is, is a first mover advantage in that space supply chain issues from China has been an issue we've got to buy and at sure and partners are going to stick with Danny which is their analysts on this one. It is his favourite stock he loves it I think it's a buy. Alec: [00:39:05] Unity group well. Adam Dawes: [00:39:07] Under takeover at the moment. So I don't know why someone's asking about that. Alec: [00:39:11] Well, honestly, someone put Twitter as well, so I guess maybe it's just because they're in the news. Yeah. Okay. Adam Dawes: [00:39:16] Okay. So Uniti group down to take over at the moment. I think we'll just talk a little bit about the telco space because the telco space is right for for like the pie down pie later space is right for that consolidation. You've got so many of these stocks in there that have got sort of small market share but not really doing well. Aussie broadband was a great call. We've been on that since two bucks was still really light that that can go to $8. I was looking at talking to John and Guy the other day Aussie broadband looks good and you well with that being taken out there's there's getting less and less players in that space. I would not buy any more because I don't think that there's going to be anything higher from here. There's two ways to play a takeover. None of this is only take 30 seconds, everybody. There's two ways to play a tie to play a takeover. One is you sell a little bit here to get back your money that you've originally invested and you let the rest run. Because what happens is there's excitement. And then it takes up to three months for the actual takeover FIRB, which is the Foreign Investment Review Board. It takes a lot of this time for for it to happen and sometimes the stock falls away a little bit. People get a bit bored with it, that that kind of thing. The other thing is, is that you hold onto it because there potentially might be another player in the market. And what was the stock the other day. Alec: [00:40:30] There versus. Adam Dawes: [00:40:30] Health versus health? You know, there's now four different players all vying for this one. So that's what you want. One players in there, that's great. But you want three or four to come in and that's where it's going to start to rally. The other side of it is, is that the upside is only going to be 5%, but the downside is going to be 30%. So you've got to be really careful. So I think with this one you hold onto it, there might be another player and that's what you wait till the 11th hour and see how you go. I'd hold on to this. Don't buy any more because the upside is pretty much going to be capped at another 5%. But UWL is a hold. Bryce: [00:41:04] NextDC? Adam Dawes: [00:41:05] Has struggled really recently. The reason why they struggled is, is that it's all about data centres and data centres are expensive or basically they're, they're big warehouses that stack racks. Where does all the data have to go? Right. Where does it all have to go? Every time you open your phone, YouTube emails, it's all data. That data needs to go somewhere. Big businesses need to put that data somewhere and store that data. Next sees the is the big player in the space. Again, let's stay with the big player. I do. There is another one, GDC, which are global data centres, which is a smaller one but we're, we're staying with the big boys. Yeah. We'll stay with that. I think next is a by the problem is with Nextdc is that they're in Australian capital cities and most Australian capital cities property markets are gone ridiculous and it costs them more money to find these warehouses. And you have to be it's like electricity, it has to be in a hub, it has to be closed because that data needs to be accessed quickly. And if you can't access it quickly, you go somewhere else. So next week's got some issues with that sort of costing, but if they can get that right, it's probably the best player in the space. Alec: [00:42:10] All right. Next one is an interesting one. Camplify I hadn't heard of, had you hired? I have, yeah. Bryce: [00:42:15] I don't think any of my own. Alec: [00:42:17] Peer to peer marketplace for RVs thoughts. No. Bryce: [00:42:23] You can put that one in there. Alec: [00:42:25] No, maybe. Maybe we shouldn't have finished. But this is good. Yeah. Adam Dawes: [00:42:30] It's not like no is the answer. I think peer to peer. Look, I understand the whole concept of Avs and the grey nomads and you know, that kind of thing. I understand what that means, but yeah, no is the answer no. Bryce: [00:42:44] Well then to close out, it's a SAS business. It's Big Tin can. Alec: [00:42:49] Yeah, Big Tim. Captain, can I just try because I like the. Bryce: [00:42:53] Big tin can holdings BTH  Adam Dawes: [00:42:56] A lot of beans does love this stock. All right. I really, really do. They love it. And I think that there's a lot of leverage in this business as well. I'm not too familiar with it. I'm going to say that if I don't know a business and I can't explain it in 30 seconds, then you shouldn't really I shouldn't really be investing it and I shouldn't be telling anybody else to invest in it. And that's a really good reason for anybody who wants to invest in a stock. If you can't tell your friend, your mother, your girlfriend, your boyfriend what this stock does in 30 seconds, then you shouldn't be investing in it. Yeah. So you should really understand the business before you invest in it. I think this is an interesting business, but it's not one for me. So I'm going to say voids nice. Bryce: [00:43:35] Well, Adam, a great way to end. We both got through it. We've got through it. I am not sure how many stocks we covered there, but it was almost the entire ASX. There's a reason you're known as one of the only advisors in Australia that can give a buy or sell at the drop of a hat, almost any stock in Australia. So if you've loved what Adam has done today and you want to see him in live, then you should head to the ASX investor days. Brisbane is tomorrow, 14th of May, Melbourne is the 21st of May and Sydney is the 28th of May. Some big weekends coming up. You can head to the ASX website. There will be a link in our show notes. Register your details, come say hello, say Adam, work his magic. We're also pretty stoked that Adam's going to be involved with Fin Fest, so we'll announce some details on that later. But Adam, thank you so much. It's been a pleasure, as always. You continue to amaze us. Adam Dawes: [00:44:29] Thank you.