Buy or Sell: 10 stocks with Adam Keily & Andrew Page

Speaker 1: [00:00:03] Pick what they like. 

Bryce: [00:00:16] Hey Equity Mates. Bryce and Ren here again for the Tuesday Buy Hold and Sell. 

Alec: [00:00:21] That's why we launched this last week. Adam Keily from Comedian V Economist, speaking through an investment expert and getting their take on ten Australian companies don't always have to be Australian, but we started with Australian companies. This week we've got another cracking episode. Adam is speaking to Andrew Page of Strawman. You've probably heard Andrew on the podcast before. He's been my mentor this year, helping me invest better. In this episode, Adam speaks to Andrew about ten stocks and asks Buy, Hold or Sell. 

Bryce: [00:00:52] And just a reminder, before we get stuck in that any information on this show is for entertainment and education purposes only. Any advice is general. Adam and Andrew don't know your personal circumstances. And finally, if you have any feedback, head to our Facebook discussion group. We'll post the episode today and we'd love to hear how you think it's going. 

Alec: [00:01:11] Yeah. All right. Well, with that, let's get to the show. 

Adam: [00:01:27] Hello and welcome to a little place that I like to call the No Holds bar. With me, Adam, host of Comedian Versus Economist podcast and widely regarded as one of the simplest minds in finance. Each week I'm joined by an actual expert, though, to educate me and hopefully you on how they're thinking about stocks and the stocks they're thinking about. It's Rapid fire, though. It's 20 minutes. Ten stocks, one choice, buy, hold or sell. And we will put our money where our mouth is. We'll be tracking each stock on the equity markets website so you can see how things pan out good, bad or otherwise. But on with the show. And today I am delighted to be joined by Andrew Page, founder and managing director at strawman.com. Andrew, welcome to Buy Hold Sell. 

Andrew: [00:02:12] Hi, Adam thanks for having me.

Adam: [00:02:14] Absolute pleasure. I am super pumped for this. Andrew I you gave me a list of the ten stocks that we're going to be talking about today, and I can confidently say I've not heard of nine out of those ten. So I think today is going to be a lot of fun. But before we get started and speaking of fun, we are, of course, broadcasting from the no holds bar, the best stocked bar in the world. And I'd like to offer you a drink to get started. Andrew, this week's signature cocktail is the ex on the beach. Not sure if you'd like that one or something else. What can I get for you?

Andrew: [00:02:46] I don't mind a bit of a cocktail, but I'm a simple man, Adam. I think I'm going to go for a good old gin and tonic. Classic. [00:02:54][7.7]

Adam: [00:02:58] My wife says Maximum three G and TS before things start to get a bit shaky. Is that your experience? 

Andrew: [00:03:07] Yeah. Yeah. To be honest, it doesn't it doesn't take a lot. So but I, you know, I used to hate gin and I've, I sort of rediscovered it like later in life and just like a duck to water love it can't get enough. 

Adam: [00:03:21] Yeah, well, there's no shortage of choice in the gin market these days. They're very, very different. More gins than stocks that we'll talk about, that's for sure.

Andrew: [00:03:30] So there's an investment lesson to be drawn from all of that a little while ago is more the craft beer sort of occasion. Yep. And now we're sort of getting to other sort of microbrewery type fads, if I want to use that. Is that time? I suspect not many of them will survive, right? It's a brutal, cutthroat industry. Bud Yeah, great. Great for a consumer standpoint, right? Like lots of. Lots of really high quality gin just sloshing about. This is great. 

Adam: [00:03:58] Brilliant. Yeah. What's next, Brandy? You're going to make a comeback. 

Andrew: [00:04:01] It's only going to take one influencer. Put it out there and all the kids, you'll be on a brandy. 

Adam: [00:04:07] This could be it, Andrew. This is what we're doing. This could be the start of the brandy comeback. All right, let's crack on. We've got ten stocks to get through. We are looking for your buy hold and sell predictions. And we're going to start with Laser Bond Ltd. ASX, LBL currently trading at $0.88 a share. Buy, hold or sell for you, Andrew.

Andrew: [00:04:31] This is a buy is a buy, Adam. I'm going to very, very quickly, I'm going to insert this as a disclaimer of all that follows, right? Because you can guarantee that if I've liked it, it's gone down 30%, right? In the next weeks and months. It is. So you've been warned and I'm not just covering my backside either. You are warned. Okay. And the other thing I'm very fond of saying is that you can borrow an idea, but you can't borrow the conviction you've made. You've made the disclaimer. But I'm just underlining this. Okay.

Adam: [00:04:58] Okay, good. Tonight. All right. What is a laser bond? 

Andrew: [00:05:02] Laser bond is the name of the company and the name of a technique. It's a surface engineering process. And the tldr here is basically it makes componentry a lot tougher. So if you've got a shovel, head for a bulldozer. Or dig blades. Any kind of machinery that is used in an industrial purpose that suffers a bit of wear and tear. These guys all make it much stronger. So the value prop here is like, Well, come to us and your equipment will last a lot longer and it will work a lot better. 

Adam: [00:05:35] So are they aftermarket like fitting the hardening on the tools or they're making the tools as well.

Andrew: [00:05:40] Now our aftermarket for the main pocket, but there's some OEM stuff that's in there as well. But what's nice about this is it's a family owned business. I know it's a public business, but the Hooper family started it. One of the sons is running. It definitely is a major shareholder here. It's a company whose revenues have been going consistently well for a long time. I mean, even as recent as 2015, they were doing 10 million in revenue. It's close to 40 million today. Right. And unlike a lot of small cap sort of growth, they're profitable, not just profitable, but 12% net margin profitable. They paid. Yeah, right. To a 2% yield fully franked and earnings per share is growing like, you know, 23% year on year for the last full financial year. And that's compounded at close to 15% per annum over the last three years. So great company, good pedigree aligned management and their target for whatever it's worth is 60 million in revenue by FY 25. So that's sort of like, you know, a good 50% above where we are at the moment. I don't think it's being priced in.

Adam: [00:06:46] Brilliant. All right. That's a that's a perfect start. Love it. Laser Bond. And that's a buy. 

Andrew: [00:06:50] It's a buy. 

Adam: [00:06:53] All right. Next up, we got Envirosuite Ltd ASX EVS, currently at $0.06 a share. Andrew I'm sure as a lot of our listeners do, I spend a lot of time on Waste management review.com today, and there was a nice feature on enviro suite the other day actually. So I think this is only good things for the stuff. 

Andrew: [00:07:12] Who doesn't go a day without reading that wonderful publication.

Adam: [00:07:17] Waste management review.com.au It's the go to source. 

Andrew: [00:07:20] I've got my subscription yeah 100% and good for gifts to you know everyone. And you can share the love.

Adam: [00:07:27] Christmas is coming up. Buy Hold or Sell. 

Andrew: [00:07:30] It's a buy. I've had a long association with this company. I think I first was positive and put a position on it back in 2016-2017. You wouldn't get it by looking at the share price because it's come back a long way, but it's actually like I've done 29% average per year over the last six years with this because things got pretty stupid there for a while. So I took the opportunity to sell, so I got stupid on the upside. It also periodically gets stupid on the downside, which is where I think we're at at the moment. So at $0.06, what do they do? They do environmental monitoring. They take third party sensors like electronic noises, things that measure dust, vibration, noise, all kinds of, you know, methane, everything you can think of. And they've got a bit of software that sort of takes all of that and allows you to sort of see what's going on. What's happened in the past has forecasting applications, have you running a mine? So if you're running a waste facility, does any of that kind of stuff? They've also got another, well, three segments. One is they do water software as well. So for modelling design plans, working out dosing for treatment plants and the rest of it, this is a nascent sort of blue sky kind of aspect of the business. And the bigger part is they do noise monitoring for airports, which they acquired a couple of years ago. But what you've got here is you've got a business that I think like a lot of businesses, they were caught off guard by not being cash flow positive when the funding dried up. And so they've now secured some funding that wasn't through equity. So it's non-dilutive. They've been growing, I think, very well. Like the core on this product has been growing at 22% compound over recent years and they're they achieved EBITDA positive in the most recent year. They're going to even if you account for growth CapEx, they're forecasting to be EBITDA positive in the current year. So the pitch here is, is that will continue to see some decent top line growth hopefully in the vicinity of 10 to 15% and we'll see them actually starting to scale effectively. So we start seeing that profit emerge and then grow at an even faster rate than that. So I think there's a few hairs on this one, but it's too cheap at the moment. 

Adam: [00:09:41] Okay, Envirosuite at $0.06 is a buy. Next up, we've got Catapult Group International, ASX Cat. This is the one I did know about, currently trading at $0.92, specialising in sports bras for men. What's not to like here, Andrew? 

Andrew: [00:09:56] And directly sports bras that have some very clever machinery embedded into it. It's not just about that all important support, which we could all do with more of that, but also to do with the fact that. 

Adam: [00:10:09] I never get tired of seeing burly footy players walking around when they take their shirts off post-game and then they've got the Sports. 

Andrew: [00:10:18] Absolutely. love it and think of it as a Fitbit on steroids. So this is Fitbit for Elite. Elite Sports is another one. I've got a very long history with this one, as it has had a few missteps with management having this core wearables division, which came out of the Australian Institute of Sport back in the day. It's like since day one has been growing its top line at 20%. They do all of the major sporting teams and codes around the world, whether that sort of be the gridiron over in the US or the Australian cricket team that they do this and but they made some big investments. They weren't prudent with a lot of their capital management and they kind of came out of favour with the market. My thesis here is that you've still got annualised contract value growing at 20% they are management new management team. A guy who came from Audible actually from from Amazon's division. Very astute in terms of knowing how a SAS business should operate or a software focussed business should, although they've got some hardware, but they are, I think, at an inflection point where you're going to start to see every incremental dollar of revenue generating a 30% profit margin. They've got a video segment as well with a lot of cross-sell opportunity. Look, things are just too cheap. It's too cheap. So you and I, one, that you can probably sell when things get a bit crazy on the upside. But at this point in time, I think it's good value and pretty defensive too, because even if things get a bit wobbly on the economic front, professional sports isn't going anywhere.

Adam: [00:11:45] Yeah, absolutely. And wouldn't it be great to see someone like Dustin Martin in the AFL just rocking the just listening to his favourite audio book as he was running out for the third quarter through the Audible integration. 

Andrew: [00:11:58] So yeah, it's, it's got everything. 

Adam: [00:12:00] That's a match made in heaven. All right. So that's a buy catapult at $0.92. 

Adam: [00:12:10] All right, Andrew, this one is a stock that could be flying under the radar. For most people, it's Stealth Global Holdings, ASX, SGI, $0.16, buy, hold or sell. 

Andrew: [00:12:21] So I said off at Am, I misread the brief. But they're all buys. I know brilliant. And I like all of them. So they're all buys. 

Adam: [00:12:30] Andrew, you don't make friends with holes. Who want to sell even, right like for you to make money. 

Andrew: [00:12:39] I will. I will do a bit of arse covering again. I will say. Peter. Peter Lynch famously said, if you're good in this game, you're right. Six out of ten times. So my hope is that in like five years time when someone listens back to this, six out of ten have been all right. 

Andrew: [00:12:52] Six Out of ten. 

Andrew: [00:12:53] That'll work out to be something decent on average. Okay. Stealth is super super under the radar. Very hyper illiquid. Very small, I guess is like 16 million market caps. Isn't this isn't a small cap. This isn't even a microcap. This is a nano cap stock. Right. Right. So be warned. That means that it can be like if you've got $1 million to deploy, this is not the stock for you. If you've got a few thousand dollars, they're not going to be a problem. So this is a feature that keeps the big money away, frankly. And this is a profitable business. This is growing revenues very strongly. They What do they do? Oh, sorry. So think of it as the Bunnings of industrial supply, the maintenance repair and operations MRO market. So they'll do things like hives, vests, drill bits, parts via tools. They've got a huge number, what they call skewed stock keeping units. So there's a very big sort of inventory here of a wide range of products that miners use. The transport industry uses construction. These are the big ones. They're based in Perth. They're doing a run rate of 115, $220 million in revenue. And as I said, the company is trading at, I think about $16 Million in revenue. 

Adam: [00:14:08] Yeah, Well.

Andrew: [00:14:08] And they've been growing through a combination of organic and acquisitive growth through judicious use of capital. They've got a big opportunity in front of them. They reckon they can do 200 million in revenue by FY 25, so close to doubling it there. And also as they scale this, they've invested a huge amount in IT systems, which seems like, well, how do you not have them. Well they did it right. And this is.

Adam: [00:14:36] Not a cause for concern, is it, that they didn't have IT systems already or we're we're excited that they're finally adding wood to their portfolio of tools. 

Andrew: [00:14:46] Well, they're becoming a very different beast. So they've grown from these very tiny, incredibly fragmented industry. And it's like, wait a second, there's no dominant player here. And dominant players scale advantages. So you get to purchase things cheaply, get more leverage out of your distribution and warehousing, but it does require its own software. And so they've been investing heavily in that. And I think too often investors miss the fact that businesses spend overnight. Success that are ten years in the making. Like they didn't just rock up and people started giving them money. You know, they invested in infrastructure, they invested in product, they invested in brand. And this is a company that has been doing that consistently and just starting to hit its straps. Now, where I think you will start to see this is something that in 5 or 10 years, I think could be worth 100 $200 Million in market cap compared to where it is today. It's going to be very illiquid, but that's the advantage of being early to this. So it's it's it's yeah, it's I as I say, it feels speculative and because it's so small but it is a profitable business, it's trading on a PE of 14 and they and they've got a I think they've got a bright future. So it's one of my largest positions.

Adam: [00:16:02] Right, right, right. The piggy bank can light up. 

Andrew: [00:16:04] Yeah, I think so.

Adam: [00:16:05] All right. Brilliant. 

Adam: [00:16:09] Next one is DroneShield asx DRO trading at $0.26. Makers of some of the most ridiculous looking weapons on the market. From what I could say, they actually look pretend the carry also the footage that this guy carrying this big thing that looks like he made it out of like bits of old pieces of barbecue on his shed or something. But anyway I drones. He would buy, hold or sell, Andrew. 

Andrew: [00:16:34] It's a buy. Definitely a buy and this is so it's not a weapon it's a of countermeasure.

Adam: [00:16:42] Countermeasure. Yeah. 

Andrew: [00:16:42] So what it does, it'll knock a drone out of the air using a certain frequency of electromagnetic radiation. So I'm not going to pretend that I understand the tech, but I think. 

Adam: [00:16:53] I could use one of those down at the beach near our place. There's people flying drones all the time. I might just. 

Andrew: [00:16:57] You know, have a lot of fun on base. 

Adam: [00:16:59] Just knocking faceless drones area using by easy drone countermeasure weapon. Not a weapon. Sorry. 

Andrew: [00:17:06] Not a weapon. Yeah. So it's kind of I mean, I got to be careful here because there's a massive tailwind here, but it's for all the wrong reasons. It's because the world's going to shed, basically. But we've seen what's happened in Ukraine and now it's happening in the Middle East, and it absolutely breaks your heart. But warfare is increasingly I mean, we've seen in Ukraine in particular how important drones are. You know, you've got equipment worth millions of dollars being taken out by a bit of kit. It's worth like, you know, $5,000 and piloted remotely with a bit of C-4 embedded in the top of it. And so this is big. This is a big deal. And they have leading products globally. They have again, this is a business that has been developing this stuff for yonks. Always been there bleeding cash. Yes, they've been growing revenues. But again, they're coming into their own. They've recently increased their sales pipeline from 200 million to 400 million. They're on the approved lists for a lot of European and US arms manufacturers who are taking big, big orders. They've got a lot of government support. They should do 70 million in revenue this year quite easily, just based on what's already been locked in. And that's A4X improvement on last year and they think they can. We spoke to the CEO at Straw Man recently. He thinks he can do 300 to 500 million in revenue in five years time. So that's from, you know, a 70 million current value. There is a bit of spice with this one. Again, often what happens, companies that are growing very fast also grow their expenses very fast as well. So they hope to sort of make that past that move past that inflection point. But, you know, they maybe they don't. We also know that procurement with military organisations can be very lucrative, but they can be very slow moving and maybe they just decide they don't want to put an order in this year, in which case you help with a bunch of inventory and costs and the rest of it. But it is an interesting play if you want, if you want one for the end of the world. 

Adam: [00:19:02] And hand handy to have something on board. If you are being attacked by a drone swarm any time in the future, why don't we? Why don't we take a break here? We'll be back with more Buy Hold Sell right after this. Welcome back here and buy a house. So I'm talking with Andrew Page from straw man, dot com founder and managing director at straw man.com. We've done five stocks already. We've got five to go and we're going to crack on with our city in our kitty. And how do we pronounce this one? 

Andrew: [00:19:35] Alcidion 

Adam: [00:19:37] In ASX, ALC. Currently at $0.10 a share. Smart products for health care, Andrew. Is that what this one's about? 

Andrew: [00:19:45] Yeah. Gosh, there's so many of these companies that have the most uninformative descriptions. Like that could mean a lot of things. 

Adam: [00:19:52] It worries me. It worries me knowing how smart devices in the home have played out and things like we've got a Google device here. And yeah, it worries me that these things are making their way into health care. If that's the case. 

Andrew: [00:20:04] Well, let me flip it around. I would say you want to be careful rolling technology out too quickly, particularly in such an important area, health care. Anyone who works in health care, I'm sure there are people out there listening will understand that the hospital systems are leaving decades in the past, and it is the last bastion of a fax machines and pages. I'm going to say that again. And there's people who don't even know what that is. I won't forgive you. 

Adam: [00:20:31] And of course. 

Andrew: [00:20:33] There are things called faxes, which would be kind of like a printer that you could send the print job through the phone. And there were pages that would say, You need to call this number.

Adam: [00:20:42] You might even need to explain the printer. To be honest, I don't know. There's a lot of seniors. I don't think there's a lot of printing going on anymore. 

Andrew: [00:20:49] Like it's just it is so amazing. And because these are big organisations, very bureaucratic. Yeah, lots of embedded investment is very hard to change. And so anyway, I see this has got a whole bunch of modular software under their Meyer product suite. Basically what's cool about this is it's bringing hospitals essentially into the 21st century so you can look after your beds, your wards, what needs to happen, what needs to change? It's cool because it sits on top of existing infrastructure, so it doesn't require a complete rebuild out of things..

Adam: [00:21:20] Plugs into the fax machine. 

Andrew: [00:21:22] It's modular, plugs in and jets to the fax machine, I think. 

Adam: [00:21:27] Yeah. Let's say it does. 

Andrew: [00:21:28] As I say, it does, But it's sort of like every company, every company, without exception. When you read their prospectus, when you read their reports are all good. Like no companies saying, Oh, this things are really bad. 

Adam: [00:21:40] Yeah, yeah, of course.

Andrew: [00:21:41] I would sell. Yeah. You know, things are great. And so where this is going, a very good story. But I think what's interesting with this is that you have seen very strong growth in revenue in recent years, has more than doubled in the last three years. Some is something like three quarters of the revenue is recurring, very high gross margins that they get there, they're operating cash flow positive. There's $14 million of cash there. There's no debt. Founders and management own 20%. Shares have gone way off the high because growth in tech has been a little bit on the nose and a whole bunch of stuff deserve to be on the nose, frankly. But a lot of I think a lot of babies have been thrown out with the bathwater. And I think I'll citium it's not cheap by any stretch of the imagination. There is there is some decent expectation in this, but they've got a good foothold, particularly at the NHS over in the in the UK and a good product set. And I think, I think well I think it's one to watch. Yeah, I like it. Buy.

Adam: [00:22:37] That's about a buy.

Adam: [00:22:40] All right, next one we got Dropsuit ASX DSE, currently trading at $0.25 and I saw DSE and I was a bit worried you were going to buy Dick Smith Electronics, huh? Surely. Surely we're not there. As much as I'd love to see the Aussie Aussie company back, but that's not all we're talking about here, is that it's.

Andrew: [00:22:59] Not Dick Smith, and I wouldn't invest in that. This is a company that does back up for full enterprise. So we all have, you know, Google Drive or Dropbox or something like that kind of thing. But think for a big organisation that needs to back up all of its emails, all of its files, yes, that is all held through as your server or an Amazon server. Our mike, you know it, but they're not backed up independently and this can be a huge deal if ever you're the subject to a ransomware attack or there is just good precedent in the modern age to have backups. I don't know if I need to make that case, then, you know, you need to catch up.

Adam: [00:23:43] A lot of regulatory compliant stuff needs, you know, you need to to prove that you have the back up so you have those available and all that sort of stuff. So I can I get it, definitely.

Andrew: [00:23:52] So it's really good. Sharif, the CEO is a very experienced tech business person, owns a lot of shares. This is a business that has been growing really strongly and is profitable and is cash flow positive. So we tend to assume all growth is not profitable. And that's definitely a general truism in recent years. But this one is revenues tripled in the last few years. They resell well, they they offer their products. Through resellers. So you have like basically small IT companies that go in and implement all of this for AMP or Telstra or something like that, and they go through and then, which means their very capital lite model, which means they basically provide the software and product for others to sell and install. It's quite a clever model. The vast majority of enterprises, small medium enterprise, end up do not have adequate backup solutions. Can you believe that? So there's a big tailwind here. Annualised recurring revenue up 37%. $24 million of cash on hand. Very well capitalised. This is probably the most expensive one on traditional measures of the ones we've discussed so far. But I think it's justified. So it's still a buy for me. It's probably not screaming, you know, it's not dirt cheap. But I think if you bought that under the mattress for five years or so, you'll probably be pretty happy with it. 

Adam: [00:25:11] All right. Very good. Next one we're looking at is Jumbo Interactive, ASX JIN currently 13.6. This stock feels like a bit of a lottery, if you ask me. Thank you for laughing. Jumbo Interactive. What are they? What are they? 

Andrew: [00:25:31] They are a lottery reseller. So if you're buying a lottery ticket online in Australia from ozlotteries.com, you're buying it off of these guys so they buy it off the lottery company. It's actually called the lottery company these days. Used to be, yeah. Touch in the day But they got a pass through margin on that. Now there is a little bit of counterpart well a lot of counterparty risk there. Fortunately, a few years ago they signed a ten year contract. So there's nothing the next seven years that is all stitched up. And again, it's surprising in the year 2023 to realise how many people still buy lottery tickets at the newsagent or online. It's just crazy. 

Adam: [00:26:09] And it's not declining. It's like lottery tickets, I think in the age of online sports betting and all that sort of stuff that hasn't eaten into the. Not at all. The lottery ticket market. We're still chasing the dream.

Andrew: [00:26:20] Now it's growing. The lottery is also the most ethical of gambling. When you hear problem gamblers, you never hear problem lottery. So you buy your ticket? Who's right? Like, that's just. It's a 1 in 1,000,000 shot, but you know, you're going to lose. But you do it because there is that slither of hope. So, you. 

Adam: [00:26:39] You're not sitting for four hours at a time in a dark room buying lottery tickets either. I think that's them.

Andrew: [00:26:45] Spend 5 or 10 bucks a week on a lottery ticket. It's not I'm not condoning gangs, you know, and I do own shares in this company, so I'm probably rationalising to myself. I'm a pretty ethical investor. But and why it matters, I suppose, is that you do see crackdown and regulation on sports betting on poker for good reasons. Because they destroy lives, right? Yeah. So governments of the lottery because they get a lot of money from it. Yeah. You know, in terms of taxes and whatnot. So that's really good. And it's also one that's not that there's no people pressuring to get rid of it because it's destroying lives. It's also growing very rapidly. But the secret sauce here and again, we spoke to the CEO recently, he's just a phenomenal guy, is actually the founder of the business way back in the late 90s. And their secret sauce is the software. So they're actually selling the software to other jurisdictions. Canada and elsewhere, right? Yeah. Which is what you can imagine is we really got to make sure this stuff runs well. If you've told someone they've got the right lotto numbers and they don't and all they can be. 

Adam: [00:27:52] That's a good phone call. That one. Congratulations. Oh, hang on. Hang on a second. Sorry. 

Andrew: [00:28:00] So they do that and they also manage services. Or as a result, there's a bit to unpack here. But look, I think it's good revenue has been growing at 20% per annum since the last 20 years and even over the last five years and even on a per share basis as well. Final thing I'll say, Adam, is that they've got net margins of over 30%. 

Adam: [00:28:21] Wow. Okay. 

Andrew: [00:28:22] Net like, yeah, there are literally less than ten companies on the entire ASX that sustainably do that. So that tells you they've got a pretty good moat. 

Adam: [00:28:29] Now that's a buy. Alright. Next up we are looking at Bailador Technology Investments, ASX BTI, currently $1.16. I had a quick look at this one. I do some research here. founded by one of the most impressive people I think I've ever seen. David Kirk was a former World Cup winning old black captain and Rhodes scholar. Like, Yeah, take a day off, David. Seriously, you're making the rest of us look pretty bad. So the Bailador technology investments, tell us about is it a buy hold or sell for you. Well, these are all buy, right? 

Andrew: [00:29:05] Yeah, it's a buy. Everything, we are not getting out of bed for anything less than a buy. 

Adam: [00:29:10] And you stay with it till the end. Till you know the company is in a screaming heap on the floor. Very good. So, Bailador. 

Andrew: [00:29:21] It is a way to think about. This is almost like a listed private equity company that focuses in early stage tech, which a lot of people don't want. Sounds risky. Well, it is. It's a bit riskier than most, but they have got an incredibly good track record of backing, good investments. If you took up all of their investments that they own, they own a bunch of cash at the moment because they've sold out of some recent investments. They've got a few listed companies and they've got a whole bunch of private, unlisted companies. If you add all of that up and sold everything and then paid tax and everything, you'd have $1.59. 

Adam: [00:29:57] Yeah, well, okay. And they're at $1.16. 

Andrew: [00:29:59] The share price is at $1.16. Now the astute investors out there are going. Yeah, well, that's what they say these private investors know. What's it really worth? You don't know what it's really worth until you sell it, right? Like my house could be worth $10 million as far as I'm concerned, until I put on the market and buyers get not paying out. Yeah. Yeah. So, but one of the things that I think is very encouraging here is that when they have sold out or raised money on these private companies, they have they're they carrying value as it's carried on. The balance sheet has proven to be pretty conservative, in fact. So 40% of that $1.59 is in cash. That's accurately value. You know, 33% is value is on listed companies, which is valued every day on the market and 26% is private investments. And I my I put it to you that they are being conservatively held. So you're getting to buy $1.59 worth of assets for $1.16 and they pay a dividend and management and founders own a huge amount of shares and it's a great great way to get exposure to very early stage tech where you've got technology experts choosing, picking, monitoring these company. 

Adam: [00:31:10] Sounds like a good idea to me, but I am far from an expert. All right. Oh, exciting, exciting times. It is time for The big call, Andrew. Your last pic of the day is AVA Risk Group AVA, currently at $0.19 specialising in risk management. So I feel better already. 

Andrew: [00:31:35] Do you feel safer? 

Adam: [00:31:36] What could possibly go wrong? Tell us about AVA Risk Group. We know it's a buy. You're only about the buys. What's the deal with AVA. 

Andrew: [00:31:43] There's been a buy for me for, gosh, least 18 months now. And I'm not covered myself in glory. Right? It's not it's not done at anything. Share price wise. But I think the businesses I think the business is is firming up nicely here. So they do it's very messy because they divested themselves of a business unit. They paid a big special dividend out of that. They've got a new CEO. They've made some recent partnerships and acquisitions. So it's like when you're looking at some of the financials here is like, what is going on? I think therein lies part, partly the opportunity because it isn't clear cut. So what do they do? They do perimeter detection technology that uses fibre optic cable. So you bury this stuff under the ground and if someone walks over the top of it, it sets off an alarm. But it does it doing some cool physics and some cool software.

Adam: [00:32:31] I did read this on the website. It says the company software incorporates an embedded deep learning engine to enhance system performance by referencing algorithm upgrades supported by the company's global data library. So that sounds like some pretty cool tech. 

Andrew: [00:32:46] That's that for a wound. Sellin'. 

Andrew: [00:32:50] Yeah, I hate how companies do this. 

Adam: [00:32:52] I still have no idea what they do. But you've told me the fibre optics under the ground and people walk over and it beeps are brilliant. All right, now I get it.

Andrew: [00:33:03] And it turns out you can run this fibre optic cable along a conveyor belt in a mine or a pond, or you can put it in a whole bunch of stuff and it's just you can put it along a railway line. So if there's a rock fall or a branch falls across, you know, it's there. There was a big thing a little while ago about the Internet of Things Iot, and that was sort of a little. But this is kind of one of those kinds of plays, I guess, in virus is as well to a degree where it's basically.

Adam: [00:33:28] That was prev AI, the Internet of Things. Now we've moved on. We're all about the AI now that replaced the IOT. 

Andrew: [00:33:35] All of that that actually these guys are be using that to well they use actually it's more technically machine learning but they look they've got they've also do locks as well so very advanced like biometric readers that you might put on a data centre or a military base. And in fact that's, that's the kind of stuff where you really want to make sure the right people are going through the right doors and they've got all the other segments as well. But the main one is this one, they are looking for a revenue target of anywhere between 7 and 100 million within three years. And they're currently looking to do about 30 to 35 million in the current year. So this is again, they've built up a good product set over a long time. It should be said. There hasn't always been smooth sailing, but they're starting to get some sales traction. The recent update, they've reiterated this target again, they've reported revenue. That's 8% growth on the first half, traditionally their slowest half, and they're expecting margins to grow from about 8%, 9% EBITDA level in the current year to something it should be, they hope, north of 25%. So if and there's a few ifs in here, but if you take the lower end of that guidance and you apply some conservative numbers, you still get a company whose operating profit should come close to tripling in the next three years or so. And I don't think the market fully believes that at this point in time. And if there is, we need a few more quarters to really firm this up. But I feel as though if they can, you will see a rewrite. I think this is worth at least $0.30 a share and it's currently trading at 18.5. So there's good upside if they get it right.

Adam: [00:35:12] All right. Excellent. Ava risk group currently at $0.19. That is a buy as every stock has been today on the show. Andrew Page from strawman.com. Thank you so much for joining me It's been a lot of fun. 

Andrew: [00:35:24] And good fun Adam thanks for having me. 

Adam: [00:35:26] Excellent. We'll have you back. We'll have you back again. Don't forget, we are tracking all of Andrew's picks on the equity markets website. So if you missed any today or you just want to get the stock ticker or find out the current price or have a look in a few months and see where they're at, then you'll find all that on the equity mate's website. But that is it for Buy Hold Sell this week. We'd love to hear what you thought of the show. Was it a buy hold or sell for you? Flick us an email contact@equitymates.com and if you would like to hear more of me unlikely but on the off chance you can tune into comedian versus economist new episode drops tomorrow if you're listening to this on Tuesday. So yeah love it if you join me over there but for now that is all from Buy Hold Sell for this week. We'll talk to you again next time.