Buy, hold or sell with Adam Dawes | ASX Week

HOSTS Alec Renehan & Bryce Leske|31 May, 2021

Brought to you by Australian Securities Exchange (ASX)

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

Welcome to ASX week! This week we’re dropping one episode every day, thanks to the ASX Investor Day – who gave us access to their array of incredible presenters to bring you some of the best sessions and experts from the conference. Today we’re joined by Adam Dawes, Senior Investment Advisor of Shaw & Partners, who held a buy, hold and sell session for ASX Investor Day attendees. We wanted to replicate this session on the podcast, so we reached out to the Equity Mates community in the Equity Mates Facebook Discussion Group and they gave us a huge list of stocks to talk about. This is an epic episode, so we hope you enjoy it.

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Bryce Leske: [00:01:38] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, or whether you're an absolute beginner or approaching Warren Buffett's status. Our aim is to help break down your barriers from beginning to the dividend. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? [00:01:53][14.5]

Alec Renehan: [00:01:53] I'm very good, Bryce. Not only am I excited for this episode, I'm excited for this week because we've partnered with the ASX and we're doing something pretty exciting. [00:02:01][7.8]

Bryce Leske: [00:02:01] We are. This week is all about the ASX Investor Day. In case you missed it, the ASX has been holding live sessions around the country over the past month and we've partnered with them as a Ren said, to bring you some of the best sessions and experts from the conference. And today it's going to be a great way to kick. [00:02:19][18.1]

Alec Renehan: [00:02:20] So today and every day this week, we're going to be releasing an episode on this feed with a different expert covering the topic that they presented on Investor Day. So hopefully gives you a taste of the day. Hopefully, it gets you excited for the next Investor Day happening later this year. [00:02:38][18.2]

Bryce Leske: [00:02:38] That's right. So it is our pleasure to welcome Adam Dawes to the studio. Adam, welcome. [00:02:43][4.5]

Adam Dawes: [00:02:43] Thank you. Yes, it's great to be here. [00:02:45][1.9]

Bryce Leske: [00:02:46] So Adam is a senior investment advisor at Shuren Partners, and he held the buy, hold and sell session for the ASX Investor Day. And we wanted to replicate that session today by essentially getting as big a list as possible, the stock market. And we're just going to play by HODO so. [00:03:06][20.3]

Speaker 4: [00:03:06] Yeah, yeah. Could it get any better? [00:03:08][1.4]

Alec Renehan: [00:03:09] No, no. This is probably the hottest, hottest session at Investor Day. Only people wait around all day to hear Adam speak. Yes. So we're lucky to have you on the show. Yeah, I'm going to use that for forty five minutes to really [00:03:22][13.8]

Adam Dawes: [00:03:23] looking forward to it do a lot of talking. [00:03:25][1.6]

Alec Renehan: [00:03:26] So the way we've structured this is we've got a bunch of different I guess, sectors or categories and some of the companies that the equity mates community have asked us to ask you about. But before we get into that, we do like to hear the story of people's first investment. We generally find there's a good lesson or story that comes out of it. So before we get into buy, hold or sell, can you tell us the story of your first investment? [00:03:51][24.8]

Adam Dawes: [00:03:52] Yeah. So my first investment was certainly something that wasn't very large compared to what I'm doing today. But it gives you once you put your own money into a stock, it gives you that sense of skin in the game. And Holy Dooley, you know, like your heart starts to race and it's like, you know, you press the button and you've bought it. So my first investment was very, very boring. And potentially that's what everybody should be doing for their first investment is to be a little bit more cautious about what they're going to do. And I still hold it today. So it's very boring. Everybody, I know you love the tech space and everything else, but BHP was my first investment. The stock was at twenty five dollars and basically through the global financial crisis, it went to fourteen point. So I took a very, very view that I like the stock and I was happy to buy more. And I bought a little bit more when it got back up to 15 and 16. And I still hold it today, but it's been a very good stock, good quality. And obviously ESG has been a bit of an issue for them. But going forward but something safe and boring for your first one, I think is is the best advice I can give anybody. [00:05:02][70.4]

Bryce Leske: [00:05:03] Yeah, I love that. So let's crack into it before we do. When we say buy, Holder sell, do you have a particular time horizon in your mind or is it literally just right now? [00:05:14][11.1]

Adam Dawes: [00:05:15] Yeah. So most of our analysts and I can and I'll somewhat talk to some of our analysts price targets in those kinds of things. They look at it within a twelve month view. OK, now we have some of these stocks in these that we're going to talk about today that have one fallen even today, fallen by 40 per cent or some have risen by 12 per cent. So when I preface that, I'll probably say this is a strong buy or something like that, that now is the time. But we basically look at it from a larger perspective, that it should be a sort of a six to 12 month horizon, that if you do buy or sell and I'll be very vocal on the sell side, pretty much sell will be getting out straightaway. [00:05:54][39.8]

Speaker 4: [00:05:55] So right now, I can give you a couple of examples of some good sales. [00:05:59][3.6]

Alec Renehan: [00:06:00] We don't want to hold back here right now. We should just establish we're recording this on the 19th of May. It won't be released for a couple of weeks. So we think it's important to ground it given we're going to be talking by holding cell. [00:06:15][14.3]

Adam Dawes: [00:06:15] And plus also, this is not advice. This is I haven't taken into anyone's personal circumstances or anything like that. So this is general in nature. So please, if you are going to invest, please seek professional advice before you do anything nice. [00:06:27][11.9]

Bryce Leske: [00:06:27] All right. Well, let's kick off with potentially the hottest sector in the equity markets group, and that is the buy now. Pay later. [00:06:33][5.6]

Alec Renehan: [00:06:35] There will be a close second in terms of policy, [00:06:38][2.7]

Bryce Leske: [00:06:39] so the two community picks, again, no surprises after pay and zip that one pay by Hill to sell on both of those. [00:06:47][8.5]

Adam Dawes: [00:06:48] Well, look, certainly, we've seen after pay from one hundred and sixty points down to eighty point where it is today and obviously zip from fourteen point down to seven point. So, look, there's certainly some value now starting to creep back into that by an hour later sector. We have seen a huge sell off in both of those stocks and in the sector in its entirety. But you've got to remember that these guys are still doing what they were doing six months ago, two years ago. They're still winning customers. They're still putting people onto their platform and they're still making these things work. So I think they're both by zip is my favored one at the moment. So that's a strong buy. I think after pay you getting a lot of this hot money starting to come out of the sector. So you need to be really, really careful about that one that potentially could fall a little bit further. But the whole reasoning behind this in why it's buy is that we think that and after pay are getting huge numbers in the US, absolutely ridiculous numbers and quarter pay for Zerbe is outstripping or beating after pay, you know, sort of three times. So we think that those quarterly numbers and you can look to when they're reporting dates, it could be a good trade for those quarterly numbers coming out. As those quarterly numbers come out, we expect them to be beating expectations and you'll start to see a bit of love coming back into that sector once they start to talk about it. Now, obviously, there's a big player in the space by Kleiner, but then what about it? [00:08:10][82.1]

Adam Dawes: [00:08:11] Forget about it. How could I forget how? [00:08:13][2.0]

Adam Dawes: [00:08:13] So there is this huge big player there, and PayPal's basically turning the model on its head and saying to merchants, you don't actually have to pay any fee to be there. And this is what the concern was many years ago, that you can't keep making the merchant pay four percent plus to get onto this system. Now, they're happy to do that because here in Australia, we understand layby and that's exactly what it is. But the customer gets the product before you pay it off. So businesses are happy to get rid of all of that inventory and move it while continuing to get the money in the door. So I think overall, zip is a very good one. We do know that Carlana and Matt Coleman are playing that whole game of this is should be regulated. This sector should be regulated. And at the moment it isn't. So the reason why I like Zipp is that they do more control or quality control or credit checks when they put on a customer versus after pay. And I think if it comes down to it and they shine the torch on both the companies, it will come out a lot better than after pay and potentially that is just a little bit of a leg up as the reasons why I prefer Zipp over after pay. [00:09:20][66.8]

Alec Renehan: [00:09:20] You've made a lot of friends in the equity markets. You prefer zip over after pay. So let's get this ball rolling after by now Piloto, we've got to go to Tech. You've got a number of names here so maybe let's go one by one. So first one Altium A you buy hold or sell [00:09:41][20.2]

Adam Dawes: [00:09:41] our use buy. At the moment for us I think that the reason is, is that this business and you can actually look back to global financial crisis and tech rout and these kinds of things where this company was just in its infancy. Our team was one of those ones that every time we use a computer, you press a button on a lift, you use their technology. Their technology is to for chips to talk to each other so they can communicate and do what they do. This is a fantastic business. It has been beaten up with the rest of the tech sector. But I really like this one for good revenue and long term, I think our team is definitely by [00:10:18][36.9]

Bryce Leske: [00:10:19] keeping with ASAP and not [00:10:22][2.1]

Adam Dawes: [00:10:22] going to happen. Now, this is a tough one because even today, this stock has rallied quite considerably, and potentially there's value starting to come back into these stocks. And that value is certainly somewhere where you want to be. But at the end of the day, you need to be really careful about how you step into these things because at the moment they're falling and it's what's called catching a falling knife. So in other words, you cut yourself when you catch a falling knife. At the moment, you don't want to be into these things too much because we're continuing to see the fall. But what will happen is we want to see the stock move sideways for a while. That creates the base and that creates something that you can then go forward with. So a little bit of patience on apon. It has rallied a little bit today because potentially people see value in it. But the issue with happiness is that 80 per cent of the revenue comes from five major clients Microsoft, Facebook, Google, those kinds of things. And what happened does is they've done a lot of voice technology. So the Ceri. So when you talk about ask for what's the weather today, they have a lot of their smarts that go into that. Plus also, when you're going onto a website and you log on and you ask, I'm not a robot or and you tick that, and then there are all these pictures about a mountain and you have to tick the mountain. It's actually people that do that, it's actually not a computer because I cannot do that for them. So this is masses of rooms, of people in rows plugging away on computers to get that data into the system to work it. Now, the issue is, is that now Google, Microsoft, and Facebook have said we can do that ourselves. We don't need you apon because basically, they can get the grunt work done as well. So apan key customer, five businesses, 80 per cent of their revenue, it's a little bit cautious. So it's a hold from me until you find that line where, as I said it before, it'll then move start to move sideways, then you can have a look at it. So it's patients on apon at the moment. [00:12:17][114.7]

Alec Renehan: [00:12:17] So next company in the tech sector is one, I guess, a market darling for a while now. And that's Ariah [00:12:24][7.0]

Adam Dawes: [00:12:25] Group. Yeah. Fantastic business, isn't it? And with the housing market continuing to go ridiculous here in Sydney as well as Melbourne and anywhere else in regionals in regional Victoria just this week, and the amount of property that's moving around the subdivision's land, getting packaged up for people that want to move outside of Melbourne or outside of Sydney to do that, I think it's going ridiculous. Aria is a fantastic business, and the reason why it's a fantastic business is that to advertise in areas free of problems are all real estate agents will want to be there. But what they do is then they lift their services. They then say, well, we'll put you ahead of the pack. We'll put you up a bit further if you pay a fee, if you want premium this if you want premium. And so they're able to lift up these real estate agents because it's so competitive out there. This there's not a lot of stock, but then there's a lot of people wanting to buy. But being competitive is really, really important so they can lift up those services. And what a fantastic stock this has been. The other side of it is if you want to own something like News Corp or News Corp owns 60 percent of Ariah. So, you know, you can get a pseudo exposure to both of those companies via by buying one or the other as well. So it's an interesting way to play something if you're looking at News Corp as well. But RSA will continue to be a buy in this low interest rate environment and the way that they can lift that average spend, I think it's fantastic. [00:13:54][88.4]

Bryce Leske: [00:13:55] So, Adam, what about Digital X DCC? [00:13:57][2.2]

Alec Renehan: [00:13:58] And maybe for people who haven't heard of this one, a quick primer on what they do. Yeah, so. [00:14:02][4.2]

Adam Dawes: [00:14:04] Well, nobody's heard of Bitcoin. So did you want me to talk about Bitcoin [00:14:07][3.4]

Alec Renehan: [00:14:08] and explain, like, how the value is there? [00:14:10][1.7]

Adam Dawes: [00:14:11] Whining. It's no, I can't explain any of that. [00:14:13][2.6]

Adam Dawes: [00:14:14] So Disqus is a store of bitcoin and they've got actually a fair bit sitting in cold storage. And so this one is a is a tough one. It is a high risk one. So to be careful with this one, because Bitcoin is moving around ridiculously and volatile and hence there their storage will be up or down depending on what the bitcoin is done. But it's an interesting way to get access to Bitcoin if you don't know how to do it if you don't know or just to invest in a company, because there are not many ASX companies that are really sort of aligned with Bitcoin. So this is I think for me is is I like this story. I think it's a buy due to the fact that it's a way to get exposure to another asset class that potentially you might not be able to get access to. So they hold Bitcoins and store bitcoins. They've got a couple of other businesses as well that will do well. So it's a really interesting story for me as far as the ASX, just to give us a little bit more insight into that. But look, certainly Bitcoin is here to stay, and I think that also means that DCC will do quite well out of it. [00:15:19][64.7]

Alec Renehan: [00:15:19] Now, we've got one more company in the tech sector, I guess one that maybe shouldn't be in the tech sector. They would like to think they're in the tech sector. Absolutely. And that's Telstra. [00:15:30][11.0]

Adam Dawes: [00:15:31] Well, what an old world stock. [00:15:32][1.2]

Adam Dawes: [00:15:33] I know that's the problem with Australia. I mean, we are an old world market. We've got a couple of resources, a couple of banks, some supermarkets and a telco like that, that that is pretty much what our top 20 is. So and then, yes, there's lots of other things and we're doing well in that tech space. But Telstra is one of those ones that really has lagged. And it was always seen as a conservative stock. And I don't think they've really shaken that conservativeness away from investors. And there are still a lot of people. When I was at the ASX Investor Day on the weekend, everybody put your hand up who owns Telstra and, you know, at least twenty five thirty per cent of the room still holds Telstra. [00:16:11][37.9]

Alec Renehan: [00:16:11] I think everyone will hold some in their super account yourself managed or if you own an index fund. [00:16:17][5.2]

Adam Dawes: [00:16:17] Absolutely. So everyone does own this thing. So is Telstra buy, hold or sell? That's what you're asking me. I think actually Telstra is a buyer. And the reason why I say that is that we saw them about three months ago and it's the first time in five years that we walked out of that. Meaning going, yeah, actually, these guys now are starting to turn this business around and starting to make it go. The reason why is that they're looking to move assets or hive assets off. And when you do that, you clean your business up potentially for it's easier for people to understand the business. But then it's also easier for people than to take it over or generate extra revenue. So the first business off the rank that they're going to sell is all of the mobile phone towers. Right. So that's a fantastic business in itself. Infrastructure. We all need it. It is going to happen. There's no way around it. We need those kinds of things. So Telstra in in the short term is actually turning this business around now. They've done the right thing by reducing dividends. That's the first thing, you know, Yahoo! Like all of these massive companies in the US, they don't pay dividends. They just put all the money back into the business. And that's where the old world needs to be shaken off a bit because everyone expected their dividend yield to be seven, eight per cent plus franking credits. It's not going to happen anymore. They're going to reduce those dividends and put money back into the business to it to grow. So along the lines of that, they're splitting the business up or taking chunks out and simplifying it. And they've got this new sort of vision that they are going to be a tech stock versus or a tech telco versus an old world copper wire business, landline business. They've got the infrastructure. They've got it all there. It just got to get the market back in, back in its corner. And that's and I think that's yeah. That's happening. So it's a buy Telstra from a tech telco. [00:18:07][109.8]

Bryce Leske: [00:18:12] All right. Moving sectors into my favorite. That is retail. [00:18:16][4.3]

Adam Dawes: [00:18:17] Yeah. [00:18:17][0.0]

Bryce Leske: [00:18:18] Let's kick off with the e-commerce disrupter, and that is Kogan. [00:18:22][3.7]

Adam Dawes: [00:18:24] And so it is a definite disruptor in this business. However, it's had such a fantastic run. Yeah, it's now coming back like we're seeing with the after pace or the by now pay later sector. And it's really about this pre covid, covid and then post covered world because improved covid Kogan was doing very well and everyone was happy and it was being bought up in a middle of covid these numbers just ridiculous. Ridiculous. Why? Because everybody's sitting at home. Templin, Webster, JB Hi-Fi. We'll talk about all of these business where you couldn't get out. So and you're sitting there looking at that wall going, I really need to do something that or I need a new fridge or I need a new TV or whatever. Kogan is there to go click, click, click, deliver. And then basically within three days you're getting this item and you couldn't get out, so you had to use these services. Now, has people's perceptions changed of buying Internet? Probably to a large degree. Do you then still go out to the store to buy your goods? Maybe you like to look at the fridge before you buy it or something like that. But I think attitudes have changed. So PreK over they were doing well covid they were doing amazing. Now it's about postcode. Are they going to be able to keep those numbers moving? I don't know. I think that might. And this is why we're seeing the temple in Webster's, the Cogan's and all sort of coming off a bit because those numbers will not continue forever. So Kogan is a hold for me because I want to make sure that those numbers that, you know, that they've they've obviously had a fantastic run. Are they going to move through? And I don't think they will. So we're going to have to normalize somewhere along the line there. And we've seen that with our supermarkets, the whole pantry, DIMMICK, everybody. [00:20:18][113.8]

Adam Dawes: [00:20:22] Everyone was buying toilet paper. Yeah. Why we did that, who knows. But it was supermarkets were flooded with those like for like sales and they've all come off because they can't go at 12 per cent life like sales. They'll have to go at three to five where they normally sit. So you've got these massive sugar rush coming in. And I think Cogan's in that same space, you just got to wait till the sales normalize. They're doing really good stuff on energy. You becoming the the place to go to get your Internet, your energy, you know, all those kinds of things. And that's a great way to keep people's wallet closer to them. So it's a hold for me just at the moment trying to work out how they're going to figure out in this post covid World Pantry Domecq. [00:20:59][36.2]

Alec Renehan: [00:21:00] I'm still thinking about that. Bryce was Woolies at Coles during the start of covid and neither of us have even heard of that. [00:21:06][6.0]

Adam Dawes: [00:21:07] They're you go. So now it's a great one. Yeah. Everyone was like, oh my goodness, you know, I like you know, I bring my wife and said, What are you doing? She's like panic buying. And I was like, you don't need to just like everyone else. So I'm going to say, yeah, that Dimmick was huge. [00:21:21][13.8]

Alec Renehan: [00:21:21] I was getting people asking me, like, when's a truck when does this dog get a delivery? I need to buy toilet paper. [00:21:27][5.8]

Adam Dawes: [00:21:27] Yeah, it's crazy, isn't it? [00:21:29][1.4]

Adam Dawes: [00:21:29] Yeah, but it was like three Christmases in one week from those guys. Unbelievable. [00:21:33][4.2]

Alec Renehan: [00:21:34] So so we will put the sort of markers to one side. We actually don't have them on this list. Maybe we should add them in. But I want to stick on the e-commerce theme for a moment. A company that was recently listed last year, Book Topia B.K.. [00:21:49][15.0]

Adam Dawes: [00:21:51] Yeah, we listed them. Oh, there you go. Yeah. So our firm Suran Partners listed them. So, look, this is an interesting one because, you know, I sort of liken it to the GameStop right. Where GameStop or, you know, you used to go into a store to buy your books. Right? Used to go in there. GameStop used to go to EB games or whatever to buy your games. But you don't do that anymore. You buy them online and you get them delivered. Now, obviously, with an online business, you can take 15 per cent, 20 percent off your purchase price because you don't have to pay rent. You don't have to pay staff as such. And so it's a huge benefit to shareholders, to people buying that you can buy these things at a discounted price. What that does then is Dymocks has to close book stores all around Australia and only really got two or three bookstores now. George in Sydney, you know, in the city and maybe Bonnar Junction, something like that, the bigger stores will be able to handle it. So I think Book October has a way of disrupting. Yes. That area. I do wonder how many people are reading books versus listening to podcasts, looking online YouTube content on demand. So I think I think it's a hold. My my daughter is an avid reader and Will will read, you know, in her school holidays, read seven books or eight books like She Loves Them, but she likes going to the bookstore unless she's like a kid in a candy store because she can touch them, feel them, though, that kind of things. But she's got a lot of book topia vouchers. I just think that that disruption needs to be qualified because it is a new business. I want to be careful that, you know, I'd say a hold because I haven't seen the numbers for the six months to 12 months. And if they're able to beat prospectus forecasts, then I feel a little bit more comfortable about it. It has had run up and it has come down as well. So I think if you've got it, hold it. I think it's a very good business but wait till their sort of Cordelia's and half year before you can make an investment decision on that one. [00:23:53][122.0]

Bryce Leske: [00:23:54] The company that just keeps on giving is JB Hi-Fi. [00:23:57][2.8]

Adam Dawes: [00:23:58] Unbelievable. [00:23:58][0.0]

Alec Renehan: [00:23:59] Yes. [00:23:59][0.0]

Adam Dawes: [00:24:01] I'm going to step away from this one because I missed it when it was at two point fifty and it was Brashers. Right. If everybody remembers that one, it used to be Brashers, which is the store. It turned into JB Hi-Fi and at two point fifty the RPI missed it. And at fifteen point I said it went too high. And at twenty thirty dollars I said, nah, can't go any higher. And now we're at fifty dollars. [00:24:21][20.0]

Adam Dawes: [00:24:25] it's one of those ones where I used to use the store and I go I love it. The reason why I'm going to say nothing about it because I've never got it right. So I'll be totally honest with you. It's a buy. Yeah. It's a fantastic business and we'll continue to go. Now the reason why I like JB Hi-Fi is that they've got a certain amount of retail space or floor space that they have. Remember, CDs, it used to be 50 per cent of their store right side started to go out of fashion. They move the seeds to the back. They put more gaming stuff for Xbox and stuff. So that's taken over that. Now, our records are really becoming a fad at the moment and outstripping CD sales. So now when you go into JB Hi-Fi, you can actually see record vinyl sitting there, pride of place. So they're able to use their floor space and move that floor space around really efficiently. And whatever the next apple comes out over the next this comes out, the next speaker, the next headphones, they're able then to use that in Victoria, make it work. So they're very smart. They're very shrewd operators. They've got a great online presence. But I missed it and I've missed the whole thing. So it's a very good company. It's definitely it's a buy, but I just yeah, I missed it enough. [00:25:42][77.2]

Alec Renehan: [00:25:43] So we've always covered three sectors and we haven't had a sale yet. So I'm looking forward to when we sign this next stock, we'll be. Well, I'm not here to play. Absolutely. So the next one is Tyro Payments T.Y.. [00:26:00][17.1]

Adam Dawes: [00:26:00] Ah, it's hard to put a sale on this one due to the fact that every time you tap your card, it's the smarts in between the tap when you tap it to the bank and it's just infrastructure that is just collected clips, the ticket, you know. And every now well every time you see the merchant you say they pay by card. They charge you an extra little bit. That extra little bit is the bank's fee. But it's also tiro getting in there and taking that fee for that connection. So it is real. Good business, it's a fantastic business, come on, a bit of pressure of late, so I think that's a really good reason. So it's a buy from me due to the fact that infrastructure is not going to go away. Cashless society is is coming. And there is people now not accepting cash. They just have to tap it. So I think it's a captive market. [00:26:54][53.7]

Alec Renehan: [00:26:55] I couldn't tell you the last time I got cash out. [00:26:56][1.5]

Adam Dawes: [00:26:57] Yeah, I might. My son asked me the other day because he wanted to get a lunch order and I don't have any cash. [00:27:03][5.5]

Alec Renehan: [00:27:04] All right. I can't. [00:27:05][0.7]

Adam Dawes: [00:27:06] Yeah, they do. But, you know. [00:27:07][1.4]

Adam Dawes: [00:27:08] Yeah, you're right. I don't know. The last time I've had cash in my wallet, I mean, maybe I put 100 bucks in. It looks to look rich, but that's about it. I never use [00:27:17][8.3]

Alec Renehan: [00:27:17] Yeah. Bryce takes time out to hit the pokies every now and then, but that's about it. So we've got a number of other sectors to hit financials, travel, health care. But before we do, we're just going to take a quick break to hear from our sponsors. [00:27:30][12.8]

Alec Renehan: [00:28:38] So, Adam, we've hit by now pay later tech retailers, some big names in there still haven't had a sell. They're waiting in anticipation for that. That's coming. You'd hate to be the CEO. That's the first cell [00:28:50][12.4]

Adam Dawes: [00:28:52] I'll get in trouble. [00:28:52][0.3]

Alec Renehan: [00:28:53] So let's move to financials. The first company from the equity markets community is a big one. I'm going to hazard a guess that not you have to be brave to sell this one. Yeah, and that is Macquarie Group. [00:29:05][11.4]

Adam Dawes: [00:29:05] You're absolutely right. Absolutely right. Look, even at one hundred and fifty hundred and forty dollars where it is today, it's still Abai like this business. Shimaa is doing a fantastic job. The only thing that could potentially get Macquarie unstuck is this net zero emissions by a certain time. They invest in a lot of businesses that aren't ready to get that net emissions zero. So they might struggle with some of that, even though they're pouring billions and billions of dollars into the ASG side of things. But Macquarie is one of those ones that comes out to the market. It says it tempers market's expectations. Oh, we're probably not going to do so well this year. We're probably it's going to be, you know, not as good, but then coming out and just beating it, beating it hands down. And so this is a business that does very well in good times and bad times. They've got commodities traders, they've got infrastructure, they've got a role. They're very smart operators. It's a buy, even though at one hundred and fifty dollars, you know, we thought CSL was never going to get to 200 dollars. We never thought Commonwealth Bank nearly getting to 100 dollars. And it will. But, you know, these kinds of things are 150. I don't think it's too expensive. You can continue to buy this thing. They will do well. [00:30:16][71.0]

Bryce Leske: [00:30:17] It was my stock to take for the next 30 years. [00:30:20][3.1]

Adam Dawes: [00:30:21] Yeah, yeah, yeah. Absolutely. Yeah, absolutely. [00:30:23][1.9]

Adam Dawes: [00:30:23] Good idea. Great, great. [00:30:24][1.1]

Bryce Leske: [00:30:25] Great to close out financials. Magellan Financial Group. So the actual business. [00:30:30][5.5]

Adam Dawes: [00:30:32] Like Macquarie, they Magellan have lots of underlying funds that they use to get our fold, to get performance. Macquarie has got a lot of those smaller sub funds as well. You always buy the Macquarie or the Magellan due to the fact that they have all these underlying funds have to pay performance fees that come up into it. So really, they're not doing much, but they're getting all of these fees from Magellan is a tough one at the moment because they I think they've called the market wrong for the last six months. And the reason is that they've been overweight cash. The reason why they've been overweight. Cash is there now so big even in the US market, if they try and take a position, they move share prices. Now, that's probably a bit hard if you're buying visa or something like that. But then they have to go down or up the risk curve to find these ones that are going to get that outperformance. So I think what we've done is that we've had issues with high levels of cash. They're still getting the inflows, which is fantastic. But the inflows then divided into retail as well as institutional retail pays a fair sum to get those funds in there. And that's really what they want. But there's been more institutional money coming in, which they don't get a huge fee on. It's very, very small. So when you look at the billions of dollars that have fund inflows, you need to look at where that's coming from in the mix going forward. But then on top of all of this, anyway, we're getting to it to hold on. [00:32:00][88.5]

Adam Dawes: [00:32:01] On top of all this is that the Aussie dollar is continuing to stay stubbornly high. And if you've got a business in the US and you're trying to then bring everything back into Aussie dollars, you're going to struggle. So the time to buy this one is when you see the Aussie dollar falling. I think inflows are going to stay the same. I think everything's going to be doing well. How much does a fantastic job in the business? But at the moment, if soon as an Aussie dollar rolls over, that's the time to buy this one. So I think it's a fantastic business. Very, very good. Pays a good dividend as well. But just be a little bit cautious on their stance of the world. I guess they'll be right one day. But at the moment, the market is definitely moving in the right or up and they're losing a lot of that performance. So it's a little bit of a key there for me. [00:32:45][44.4]

Alec Renehan: [00:32:46] So moving to a sector that has had a lot of trouble over the past years, a lot of question marks about when things will open up again. You know, the Virgin CEO and the prime minister are at each other about everything. We're not going to talk about Virgin. We're going to talk about two stocks in the travel sector. Our first one, Sydney Airport, buys, hold or sell. [00:33:08][21.9]

Adam Dawes: [00:33:10] This is not going to be my first call. It's a buy. The reason for this bye is that domestic travel, they charge about seven dollars per customer per passenger, OK? In international travel, they charge about twenty nine points. Right. So this stock is through covid had zero people coming through the door and still maintains six to five dollar level, like just the infrastructure that everything is about. It screams quality and around that five dollars with no customers coming in, which means no revenue for retail, parking, everything else that goes in it. This stock should have been a dollar. Well, it really should have been, because it was making no money, but everybody could look past it, look through the valley and say, this is a fantastic business. So you've got domestic travel. Now, remember, the Sydney to Melbourne route is the third or second busiest route in the world. And if you're getting seven dollars per passenger, they're fitting more and more people into planes these days. And the movements are still saying the same. So the movement, meaning the plane moving in and out, there's still got capacity there and about 85 per cent at the moment. So they can still grow that capacity. Obviously, the world isn't traveling. So the kicker to this one is going to be when international travel continues or comes back. So it's a buy, but it's that 12 month, sort of six to 12 month outlook. Now, nobody knows when the travel ban is going to finish and everyone speculate in 2022. But when we get to 2022, there'll be 2023. Like nobody knows when this is going to happen. But I bought some of this stock at the start of covid knowing that this will you know, this stock should trade seven to eight dollars all day long. Right. So it's about six bucks at the moment. There's a little bit of upside there when international travel kicks in. I think that's the time you really should be buying this really heavily. But it is a very, very, very good business with a quality operator, a somewhat of a monopoly. But even when Badgerys Creek, which is the second airport for Sydney, actually gets opened up, I think you'll see Sydney airports take that over anyway. So, yeah, I really like the business. It's a by [00:35:22][132.0]

Bryce Leske: [00:35:23] so continuing on travel. [00:35:24][1.1]

Adam Dawes: [00:35:24] Yeah. [00:35:24][0.0]

Bryce Leske: [00:35:25] Corporate travel management. [00:35:26][0.7]

Adam Dawes: [00:35:27] This will be my first sell go. All right. So look, it is a good business. You know, I think I think it goes hand in hand with the Webjet of the world, which I think is also struggling at the moment as well as flights. And I think you could sell that one as well. So there are a couple of sales in that in this sector, corporate travel is going to be very, very tough to get back up and running. We're all doing Zoom's where everybody does Zoom's. So, you know, and it's very difficult for a corporate to plan out how they're going to do travel around the world. And that alone just in Australia without them potentially another country estate going into lockdown. And then basically all those plans get as get moved around. So it's really tough. So it's basically Zoom's and I think corporate travel is going to struggle with that. I think Webjet also highly shorted. That is also going to be a tough one. These are bonus stocks, everybody. Webjet is is a tough one. And flight center also very, very tough. If you remember, Flight Center recapitalized their entire business down at nine dollars. So in other words, it came out to shareholders and said, we need more money. Shareholders gave them more money, and in other words, recapitalized their whole business from nine point flights. And it generally trades around forty bucks in the new world. That means it's worth twenty dollars. So any time it gets up to twenty point, don't be fooled to say, well it was at forty dollars, it's now twenty dollars. It's got further room to move because you've got to look at the amount of capital, the amount of shares that are on issue means that the forty dollars is now there is twenty dollars is a new level. And so we saw that it got up to twenty bucks and then got belted back down again. So if you just be careful in that sector or any of those sectors, the first one to take off is Qantas. That will be the first one to move. Then the Sydney airports, then you can do you Webjet flight centers, corporate travelers after that. That's how I see this reopening trade start to happen. [00:37:27][120.3]

Alec Renehan: [00:37:28] I love this Adamu. So across the ASX that we ask you about one company and you give us five [00:37:33][5.7]

Alec Renehan: [00:37:36] Bryce and I was joking before this, we should just go down the list of the ASX 200. We could probably go down the list of the All Ordinaries. [00:37:41][4.8]

Bryce Leske: [00:37:41] But hang on, there's a lot of stocks there. Yeah. [00:37:44][2.4]

Alec Renehan: [00:37:45] So moving on to another sector that is particularly interesting at the moment. A lot of great companies in there and the sector is health care and the number one company has to be CSL. So let's start at the top, buy, hold or sell CSL. [00:37:59][14.7]

Adam Dawes: [00:38:00] I want to know why this thing hasn't moved after the government turned around and said we're going to make vaccines here in Australia. Yeah, that should have been. That should have been the biggest boost to Seattle's overall business, that homemade vaccine coming through. Now, these guys are very, very good at what they do. It's a hold for me at the moment. And only reason is, is that one large part of their business is blood fractionation. So in other words, they take blood from people, especially in the US. They take blood. And it's generally in that sort of low to mid to financial range and they pay people to get their blood. Now, if you can't go into a collection center because of covered, then basically Sarcelles business has been at a standstill for that blood fractionation. They get that blood, they spin it around, they take out all the proteins and all those kinds of things and then use that to save lives in hospitals. It's a fantastic business. But if you don't have the input, which is the blood or the supply to get that through into the hospitals, it's very, very difficult for you to continue to make your business. Now, obviously, they've said we do vaccines, we can do this, we can do that, we can do all these other things. But the mainstay of their business has been hamstrung. So if we can get back to that level where the United States was the biggest customer, the United States starts to open again. It's definitely a buy, but at the moment it's a fantastic business. But I'd just be a little bit cautious in this space at 277 somewhere and it actually looks okay. It looks good. But there's a couple of things that need to happen before you could slap a buy on this. And I think that's that reopening of the US. And there is still in a world of trouble. It's going to take a lot longer than probably expected to reopen again. [00:39:51][110.4]

Bryce Leske: [00:39:54] Race, oncology, RACC. Yeah, been flying [00:39:57][3.2]

Adam Dawes: [00:40:01] More than flying this year. It's a really interesting business. And RISC, I think for me as a hold, it's not a sell because I think that what they're doing is very, very good. I'm always cautious about buying biotech stocks or stocks in the health not CSL in the healthcare space, but these biotechs, basically it's a binary outcome. Does my technology or does my drug work? Yes. Stock rises. Does my drug work? No. And it can force. So Mesoblast is a classic example where the market gets really hyped up about it. It doesn't meet its end point and the stock falls. So I think for RSA it's a little bit different. They've got some revenue driving businesses in there, so it's not just about their technology. So the thing is, I don't know how much it's run up, but it's ridiculous percentages over the last six to 12 months. I think it's a hold. You'd sit back and wait for this one. And potentially when they do come out with that next blockbuster kind of drug, then that's when you can get into it. I'm always cautious because sometimes these things don't work. So it's a whole for me just on the price action is just spin out of control if you can pull it back. There was another small business, Ireland Pharmaceuticals, which is a really good business. Some of the directors from RISC moved on to that one. That's a good little interesting one. Good little technology and that's doing dengue fever and things like that. So there's lots of these things floating around. So you just got to be a little bit careful. But RISC on price action I think is run too hard. [00:41:30][89.0]

Alec Renehan: [00:41:31] So we've got real estate to go and then we've got another bucket where we've got lots of stocks that the equity markets community asked for that we didn't think fit neatly. So we're going to cover all that. So, Adam, real estate is an interesting one. We've got three stocks in this space. We'll start. Yeah, we'll just go down the list again. We'll start with chart a whole CHC. What do you think of that one? [00:43:06][95.3]

Adam Dawes: [00:43:07] So CHC is a very, very well run business for me. They've got some fantastic it's there's actually one inside of that. It's called a long while, right? Yeah, that's fantastic. While mining is weighted average lease expiry. So in other words, how long you've got rent on this business. And I think that's good. I like charcoal as a business. It's not my favorite one in the space. We will get to my favorite one. But so it's a whole for me. I think they're going to do well. I like them. They're just good managers. So you're going to be okay in that business. [00:43:46][39.1]

Bryce Leske: [00:43:48] Staying on the real estate theme, Goodman Group. [00:43:50][2.3]

Adam Dawes: [00:43:51] Now, this is my favorite. This one is my favorite. The reason why I like it is that industrial parks remember a couple of years ago, everybody was saying Amazon's coming into Australia. You know, it's going to decimate everything. You've got to be Amazon ready, these kinds of things. These guys were Amazon ready. They've got these massive amounts, massive amounts of land value, and then they're putting these industrial parks in there. And these industrial parks are good quality tenants going for a long, long period of time. I really think the government group needs a bit of a rerating to the upside because it really hasn't had any kind of fall, which we saw through the Kovar period, that because their businesses will continue to run office is tough. You're always going to struggle with that. Regional supermarkets, they're going to struggle because people are as well as supermarkets here, but they're not going to survive. But government groups will always be there and will be very good. There's another business that's going to be listing called Milestone Logistics. That's another one that's touted to come onto the market this year that's going to help with the valuation and potentially lift Goodman Group's valuation on the back of this new IPO that's coming on. So Goodman Group is a buy from a nice one. [00:45:06][75.0]

Alec Renehan: [00:45:06] And then one more in the in this sector center group, ASX Ticker S.A.G.. [00:45:11][4.7]

Adam Dawes: [00:45:12] So this is a sell from me. We go. All right. The reason why I think that is that. It was horrible through covid well, we all knew that the shops were closed and they made people pay rent fine. Now, there wasn't trade. There was a trade-in that going up to the reopening trade of the world. Right. That there was a trade there. And certainly, the stock rallied on the back of that reopening. But the reality now is coming back. One like the Cogan's people potentially change. So they're not going into the supermarkets or the big Westfields center group is the Westfield of Australia and New Zealand. And then there was Universal Reddam, which is the global one, which is the London, UK and London and French and whatnot, the shopping malls over there. So Centigrams, the Aussie one. And I think that over time, you know, we've seen a lot of shops closing because they just can't stay open. And, you know, if you've got your own, you know, you're renting, you basically want to try and get a cheaper rent because your sales aren't there. So I just think that there's this whole line of court cases potentially that these guys are going to suffer from now. Shops are back open again, but are they open to their full extent? And is there another lockdown, yes or no? I think it's too dangerous that as well as our vicinity centers are. Acel, there's an extra one there for you vicinity centers because their regional shopping centers and regional shopping centers struggle because, yes, you've got your Coles and Woolies, you've got them in there and they're they're their anchor tenants getting four per cent rent. And then you've got all the specialty stores around the outside, the butcher, the baker, the dress maker, you know, that kind of thing. But they're all on 13 per cent rent, but they're not open at all. So the regional vicinity centers, I think also is something that I would I wouldn't be in all right. [00:47:11][118.3]

Bryce Leske: [00:47:11] Items. So I've got tend to close out with that. We couldn't bucket into a nice sector. And some of these are fan favorites. So let's let's rip through them. We've got more broadly supermarkets. [00:47:21][10.3]

Alec Renehan: [00:47:22] Well, let's let's just go to Coles and Woolies. Let's not worry about that. [00:47:25][3.1]

Adam Dawes: [00:47:27] So did you work for Coles? [00:47:28][0.8]

Alec Renehan: [00:47:28] I worked for Coles, but I don't know [00:47:31][2.6]

Alec Renehan: [00:47:33] the Redbeard much as [00:47:35][1.7]

Adam Dawes: [00:47:38] All right. First of all, Coles is definitely a buyer. I think that the world is normalized back again. So I'm not going to spend too much time on Coles. I'm going to spend all my time on Woolies. Okay. I think Woolies is a fantastic buy at the moment. June 16th is the record date, which you need to be on the share register before they divest the Endeavor group and once they divest the Endeavor Group, why they aren't divesting fantastic business. Endeavor Group is Dan Murphy's Beat US Jimmy Brings, which I wasn't aware of that as well as L.H., which is the Australian Leisure and Hospitality. There's 2000 pubs. Yeah, something like a lot of pokies, a lot of gambling, a lot of alcohol and a lot of tobacco. So the reason why they're divesting that is they've had large pension funds around the world saying we want to invest in Woolworths and we can't because you've got all of this gambling, alcohol and tobacco in there. So they said, right, they were going to do this a year ago, covid hits and now they're doing it this year. What's going to happen? You own one share Woolies at forty dollars, then you're going to get another share in the Endeavor group. This is a great way for young people to expand their portfolio by buying one share today and then getting another share in another company nine times out of ten. That child being endeavor will outperform the parent in the first 12 months. Okay, so you're going to get access to that. Second of all, when they do sell Endeavor, there's two billion dollars that's going to go into Woolworths back pocket. They'll do a capital, they'll do a buyback, a capital return to shareholders or keep the dividend nice and solid as well. Plus, then you'll get a lot of these pension funds who have been waiting to buy this stock because it is a good quality business. You'll start to see volume started to kick up in Woolworths as well. So Woolies is a buy you need to get in in the next sort of two to three weeks to be on the record date for that one. But that is going to be a fantastic spin off. And you get two businesses for the price of one. [00:49:25][107.4]

Alec Renehan: [00:49:26] And just because we're recording this on the 19th of May, but won't be releasing it until early June 30 for thirty first in May. So what just what's that Woolies record date again, sixteenth of June. Okay, good to know. Expect strong buying pressure. Yeah. So so another stock I reckon after Zipp. This is the most discussed stock in the equity markets community at the moment. Yeah. And that is a true milk. Obviously a darling for a long time beaten down recently. Buy, hold or sell. [00:49:56][30.1]

Adam Dawes: [00:49:58] OK, so before I give my bio to sell this one, generally, what happens with the business that is going very well and we saw this thing up at twenty four dollars or something like that, and it's now five dollars. Right. So generally we saw this thing was a fantastic business because they have a fantastic brand here in Australia and New Zealand. They had really good capital management and a fantastic board. Right. We then came started coming into covid and they said, look, don't worry about covid because most of our revenue comes from Australia and New Zealand. Okay, so we're really happy with that. But then the next quarter we saw that it's what's called the Digance putting all the powdered milk into their backpacks and then going home with it, that that was actually a major part of their revenue, that they really didn't sort of tell us that that was part of the overall mix. They said don't worry about it. And so each quarter we've had a downgrade or at least each half we've had a downgrade on this business due to the fact that basically that Diago, all those Chinese or that those customers aren't coming back in to buy those powdered milk. So for one, there is a fantastic business in Australia and New Zealand. So that's great. But that revenue source has just disappeared now. Generally, what happens with a recap of a business is there are usually three downgrades, a management change and then a final downgrade. Once the once the new CEO comes in and cleans out the closet, he says, I'm going to get this thing as low as possible because my bonus is predicated on how high I can get this share price. Right. So he goes in there, flushes it out. We've actually seen four downgrades and we've seen a management change. So we're damn close to getting to a buyer with this one. So it hold if you've got it, because you've written it from twenty four, it's down to five dollars. I bought some a personal account at ten dollars. I'm still holding it today. I still think that business is going to do well. It's just going to take some time. So we wait for that last downgrade from the new management coming in, cleaning out the closet, getting it. The stock potentially could go to two bucks. I don't know where it could go, but that's the time to be picking this thing up and doing the same with AGL, AGL to sell this. There's a bonus, 140 AGL is a sell. We've had three downgrades. And then they came and said transformational business. We're going to we're going to change all this. We're going to divest this, do that. Two weeks after that, CEO and the CFO resigned. Now, if you're a business that's going to do a generational change in what you do, you need to have that leadership. And there's obviously not. Well, there's obviously a lot of arguing going on in the back in that we're not seeing. And hence, that's why I don't think AGL will do well. I think A2 Milk will do well. But you just have to wait for that last flush out. It's a tough one. [00:52:46][168.0]

Bryce Leske: [00:52:47] That one. Interesting. Yeah. Fortescue Metals, FMG iron ore boom. [00:52:51][4.8]

Bryce Leske: [00:52:53] Yeah. Going well. That's going very well. Yeah. [00:52:57][4.2]

Adam Dawes: [00:52:58] So look, at the end of the day, the government and most analysts have price targets for iron ore, about 50 to 80 bucks a tonne. It's trading at the moment at two hundred dollars a tonne. Right. It's ridiculous. Why is it trading so high? Is that China is starting to try and curb steel production. And so what the steel production guys are doing is saying, well, if you're going to curve me, I'm just going to basically keep stockpiling this as fast as I can before you put those mandate or that mandate in place. So hence iron ore, which goes into the furnaces to make the steel, is just getting bought up in droves and hence rising the price. Can that price last know, however, how much can Fortescue make a tonne of iron ore for any guesses? Anyone. [00:53:45][47.2]

Alec Renehan: [00:53:46] Oh, it's like twenty-something bucks. I was going to say this year. Seventeen. [00:53:51][4.4]

Adam Dawes: [00:53:51] Yeah I reckon 15 to 17 bucks with dividend [00:53:54][3.0]

Adam Dawes: [00:53:56] right now if you're selling it in the spot market for let's give him the benefit of one hundred and fifty dollars, let's give him the even one hundred dollars. Yeah. Fortescue makes one hundred and eighty eight million tonnes a year. Anyone got a calculator that big. But that is a lot of zeros that go onto that. [00:54:14][17.2]

Bryce Leske: [00:54:14] Right. And into Twiggy's back. [00:54:15][1.2]

Adam Dawes: [00:54:15] And the dividend, the dividend is fantastic. So. We by Fortescue, BHP and Rio, I've got buyers on all three of them, they're fantastic, but you do not buy these stocks for the dividend. Everybody repeat back to me that you do not buy resource stocks for dividends. At the moment. They look fantastic because they've got so much cash and they're throwing it back to shareholders because they've got they can't do it with it. The problem is with the iron ore price at these highs, you're going to get all these sub producers that are going to come in and basically say that they've got a viable project at one hundred and eighty dollars a tonne where we know that it should theoretically be 55, 80, even 100 bucks is a bit of a stretch. So be careful of those new entrants coming in because they will not be able to produce iron ore at such a lower level, 17, 15 bucks. That's just unbelievable. So it is a buy for the cycle and we are in a resource super cycle. You might have heard that come around a couple of times. So it is a buy from me. Just be careful that the music will stop one day and you need to be cautious about where your positions are. And now, if you bought BHP, Rio, Fortescue at earlier prices, happy days. Hold on to that. This is fantastic. But be careful. Fortescue at 26, BHP at 50, Rio at 130. You've got to be a little bit careful of those ones going forward. So it's still a buy in the next two years. I think they will continue to do very well. [00:55:44][88.5]

Alec Renehan: [00:55:45] Tony Parker. Well, let's stay on the resources and mining theme. Another stock that came in from the markets community was South 32. [00:55:52][7.6]

Adam Dawes: [00:55:54] Yes, so this is a harder one because they've got a lot of coal and that coal is on the nose at the moment, no one's really touching it. Whitehaven, another classic example of getting belted down or unfairly treated. Yes, there is some environmental concerns around coal, but people do like turning on lights and they don't like paying for it. So you need to have cheap power and that cheap power is coal. So it is changing. The world is changing. And we are looking at other alternative sources. And yes, that's working. But the mainstay of the power generation is coal. S 32 has a lot of coal in it. Now, remember, BHP hived off south 30 to and the reason why it's called South Edyta is it's 32 companies below the city in the southern equator. That's that's basically what it is. So you've got a lot of South African stuff. You've got some Australian stuff. And it was all the bits and bobs that BHP had collected over the years. So MAGNES Nickel, you know, all these coal, all of these kinds of things, they bundled it up and put out. Now, in the first 12 months, like we talk about the parent child s attitude did very well for me. I think it's a sell because of that ESG coal access and that and I just don't see that coal market getting any better any time soon. If you had copper, they got a bit of copper in there, but that, again, is going to struggle and some of the magnetite on some of these other projects that they've got. So it is a well diversified business, but I think that coal asset is has to be hived off or moved on. But it's a sell for me, [00:57:26][91.9]

Bryce Leske: [00:57:28] a company that we did a bit of a deep dove on Digital One Ventures. Yes. [00:57:32][3.8]

Adam Dawes: [00:57:33] Yes. Good little business. I mean, look, if you wouldn't have thought digital ones would do really well. Yeah, I you know, I didn't think that [00:57:42][9.3]

Alec Renehan: [00:57:42] they would do it. We didn't think so when we talked about it a couple of years ago. [00:57:45][2.8]

Adam Dawes: [00:57:46] And you've been proven wrong. Yeah, well, [00:57:47][1.3]

Alec Renehan: [00:57:47] the stock prices [00:57:48][0.4]

Adam Dawes: [00:57:49] rise, so this is definitely a meme stock. Yeah, this is a red hot stock. This is one of those ones that everyone's been pumping away now. So lately you're seeing a little bit of a dump back at 10 cents, I think. Got stock, got to sixteen. And now it's sort of come back a little bit like the business. I don't know too much about it. I think that overall selling wine online, I mean, it's nothing new, but they've done well. I just get do get concerned about these sort of stocks that get sort of pumped up with all this hype and then they move on. And that's so fickle about what this sort of media is doing. So for me, I think at ten cents you're okay there. It's not a sell, but it's certainly not a strong buy. I'd just be cautious on that one. [00:58:36][46.8]

Alec Renehan: [00:58:36] So is that a whole. [00:58:36][0.4]

Adam Dawes: [00:58:37] I think it has to be. Yeah, I'm yeah. They had a little bit of a downgrade the other day talking about their vintages and something else about sort of keeping wine in storage and stuff like that. It's sort of what tweeze been doing for years, managing inventory. And if they can't manage that inventory correctly, it's a little bit of a concern. So I just be cautious on that one at the moment. [00:58:57][19.3]

Bryce Leske: [00:58:57] Okay, so appoints another community favorite. Where do we stand? [00:59:02][4.5]

Adam Dawes: [00:59:02] Look, these guys have done a fantastic job of marketing themselves, one to the Australian market, but then two to the US. Now, the reason why I'm a little bit cautious about points at these levels is they did a massive deal with the NFL or NBA [00:59:22][19.2]

Alec Renehan: [00:59:23] with network NBC. [00:59:24][1.4]

Adam Dawes: [00:59:25] CNBC, yeah. Yeah, yeah, correct. So basically they had to pay a ridiculous amount of money, so cost per acquisition. And if you're looking at these online businesses, you need to look at the cash cost per acquisition for customers and LTV, which is their lifetime value of how long that customer stays with them and continues to buy with them to get that customer. Now, because of that NBC deal is over five hundred and twenty dollars to get a customer on board. That's a lot of money to get them there. But that LTV is pretty good. It's sort of three, three and a half times. So they stay once they're there, but it costs them a lot of money to get it. So you sort of look at the big headline, it looks great, NBC, but you delve a little bit deeper into it and it's actually a lot of costs for them to get going on. This one, if you still have it. I still think if you if you're holding it, hold it. It's a hold. I don't think that they are going to be able to keep that rate going forever. And I think that that potentially might be an issue. So I wouldn't be putting fresh money into it. I'd be cautious. And in the US, as we know from BET, these guys, each state has their own regulatory issues and they have to go through each state to get that going. So there's a lot of cost to to make that work. So, look, it's a fantastic business. Hold it. If you have it, just be careful putting any new money in. [01:00:47][82.7]

Alec Renehan: [01:00:48] Now, Adam, we're very aware of how much time we've taken. So we, first of all, want to say thank you for giving it to us. We have five more stocks on the list that the equity markets community have asked about, and honestly, this was a list there was a lot of people wanted to hear from you. Yeah. So let's do a bit of a quick fire, one word answer, maybe a sentence. If there's something burning, you want to say, OK, to get through these last five electoral optic systems, [01:01:14][25.6]

Adam Dawes: [01:01:16] it's a hold [01:01:17][0.5]

Alec Renehan: [01:01:17] hold YAML payments [01:01:19][1.3]

Adam Dawes: [01:01:20] after today's action. It's a hold. There's been some things going on with the Irish government. And you need to be a little bit careful about what's going on for their payment system. So it's a hold. It's a buy. These guys are fantastic in what they do. And it's actually 60 per cent held by the management. So it's not a lot of free float. So it's actually quite good. It's a by [01:01:44][23.7]

Alec Renehan: [01:01:45] Alliance Aviation Service. [01:01:46][1.2]

Adam Dawes: [01:01:47] I don't know anything about it. Fair enough. [01:01:49][2.2]

Alec Renehan: [01:01:50] Yeah, that's easy. Should have taken off the list to [01:01:52][2.3]

Bryce Leske: [01:01:52] close out Southern Cross Media Group. [01:01:54][1.7]

Adam Dawes: [01:01:55] So I think traditional media and radio are going to struggle and will continue to struggle any and Channel Nine has done really well with Stand and all these other revenue streams. But I think the traditional media guys, you guys are at the forefront of that. I think that they it's all about on demand. And these guys are still in we're going to tell you what you're going to watch and what you're going to see and what you can listen to. I think it's a sell. [01:02:20][24.2]

Alec Renehan: [01:02:20] We just wanted to hear you rag on Radio four a week ago. So look at them. We want to say a massive thank you for giving us the time. We do like to finish with the same final three questions before we do. If people want to follow you online or if they've got more stocks they want to bombard you with, is there anywhere, anywhere, in particular, they should go? [01:02:41][20.3]

Adam Dawes: [01:02:42] Well, so obviously, Sean Partners is my firm that I work for work with. You can find me there. I can wear a full service broking firm so I can give you personalized advice. This is general advice, but I can definitely give you personalized advice, seek me out online. I do have lots of YouTube stuff and I'm on AusBizz. There's plenty of other media outlets that we sort of go with. But look up Sean partners and you can definitely find me there now. [01:03:06][24.6]

Alec Renehan: [01:03:07] Nice one. So we'll get stuck into these final three questions. The first one is, do you have any books that you consider masquerades? [01:03:13][6.2]

Adam Dawes: [01:03:14] So there's two Robert Kiyosaki does a book about assets and how you it's called A Quadrant. Check out Robert Kiyosaki. I forget the actual name of the book, but it is very, very good. It's what got me into investing in the first place and it talks about assets working for you versus you working for assets. [01:03:33][19.2]

Alec Renehan: [01:03:34] Is that the rich dad? Poor. That's the one. Oh, nice. Yeah. There you go. [01:03:37][3.4]

Adam Dawes: [01:03:38] Right. It's a fantastic book that showed me how investing works and why I should be concentrating on accumulating assets versus working for the man, as it were. So, yeah, that one and anything with Peter Lynch in it. So he's a very, very famous investor. Look, look him up on YouTube. He's got lots of YouTube. I think they're in the US. And if you're really a brainiac, Peter Graham has got a really good one as well. I think it's walk down. We'll know [01:04:07][29.2]

Alec Renehan: [01:04:08] a random walk [01:04:08][0.7]

Adam Dawes: [01:04:08] Yeah, no, there's another one. It just look up. Peter Graham, basically, he's like the other guy from Warren Buffett. Check it out. He's only got a couple of books, but that one is for the smart people in the room. Yeah. [01:04:23][15.0]

Alec Renehan: [01:04:25] So second question, in 60 seconds or less, what's the best company you've ever come across? [01:04:30][5.1]

Adam Dawes: [01:04:31] Yeah, this is a really hard one. I mean, I see three hundred and fifty companies a year and look at the one and I'm already eating up my time here, but I think one of the best companies and I know like we guys don't have a lot of resources sort of people. But Fortescue, I think, you know, they have cut costs. You know, that was it was big going out the door three years ago at a dollar dollar and fifty, like it was literally going out the door. And obviously, commodity cycles done well. But they've taken out costs. They've automated a lot of their stuff. This business is an amazing business. And every time I speak to them, I just go, wow, you guys know what you're doing? So a bit boring, bit old world. But I think Fortescue is one of the best businesses I've come across now. [01:05:17][46.7]

Alec Renehan: [01:05:17] We love that. We love the fact that this question isn't yielding just Apple alphabet. You know, Microsoft, we're getting a mix of companies here, which is. [01:05:26][8.3]

Adam Dawes: [01:05:26] Absolutely. [01:05:26][0.0]

Alec Renehan: [01:05:27] And then final question, if you think back to your younger self buying that first BHP share all those years ago, what advice would you give to your younger self self? [01:05:37][10.0]

Adam Dawes: [01:05:39] Patience, like this game is not about the next big thing or the next hot stock. It is about understanding, learning, and then making good investment decisions, going for. So patience and you I see opportunities every day in the market, every day I see something that I could have done and I should have done or would have, but understanding the businesses, understanding the companies, investing and understanding how you invest yourself. But patience, because I was too gung ho at the start, you know, just tried to do everything and then finding out that this world is way too big for me to look at. So yeah, my younger self, I'd say calm down, relax, enjoy it, but then have that patience to look back and sit and watch. [01:05:39][0.0]

Bryce Leske: [01:06:26] Nice. Well, Adam, it's been an awesome way to start off this week. Thank you for joining us. I know that that would have provided a lot of entertainment for our community. So a world of knowledge up in your brain there. I think next time we get you on, we'll do the second half of that aSX, too. [01:06:43][17.0]

Adam Dawes: [01:06:44] Was happy to come on any time. [01:06:46][2.3]

Alec Renehan: [01:06:46] We were going to take you up on that. [01:06:48][1.8]

Bryce Leske: [01:06:48] Absolutely. But thank you for your time. We appreciate it. [01:06:51][2.2]

Adam Dawes: [01:06:51] No problem. Thank you. [01:06:51][0.0]


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