EM Chat: Bull case for A2 Milk & Calling the Specky Hotline

HOSTS Alec Renehan & Bryce Leske|7 March, 2021

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.

This is a busy episode! There’s a new ‘What The?’, with the arrival of the SUBZ ETF (The Roundhill Streaming Services & Technology ETF) which is designed to offer investors exposure to the streaming industry. Then our Equity Mates community member Kevin Skafte gets on the line and pitches us A2 Milk, a company that Alec has long been a fan of.

Then the guys call the Specky Hotline for a hot take from Specky Macgee. Not sure if this is one we’ll be adding to the portfolio, but it did make us laugh.


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Bryce Leske: [00:00:55] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status, our aim is to help break down your investing journey and the barriers that you're facing from beginning to dividend. My name is Bryce and as always, I'm joined by my Equity Mates Ren. How are you going? [00:01:13][18.3]

Alec Renehan: [00:01:13] I'm good. I'm good. It's that time of the month again. Where we talk. Portfolio? [00:01:18][4.8]

Bryce Leske: [00:01:19] Yes, talk portfolio. This is an episode where we're going to be trialing a few new things that we hope will be entertaining. But we'll get to that in a second. Some housekeeping. We do have a listener survey up at the moment. It is currently live on our social feeds. Head to our Facebook page to find the link or our Instagram and Twitter or our Twitter or [00:01:43][24.1]

Alec Renehan: [00:01:43] Linkedin [00:01:43][0.0]

Bryce Leske: [00:01:44] or our social feeds. And it would be really appreciated if you could fill that out so that we can get a sense for what you are really enjoying and not enjoying about Equity Mates so that we can continue to improve the quality of content and your investing journey. Over the course of twenty twenty one, there is five hundred dollars on the line for some lucky person who does complete the survey in full. [00:02:07][22.4]

Alec Renehan: [00:02:07] Yeah. And look, we've, we've heard the feedback so far and survey responses. You want more and less price. We've heard you don't need to keep saying it. Bryce unfortunately isn't going anywhere, you know. [00:02:19][11.6]

Bryce Leske: [00:02:19] And Erens obviously daydreaming because I'm reading something completely different. The survey closes on the 31st of March 2021, in case you were listening to this and you can't find the link as well. We do have our fund manager of the Year competition going, which we introduced in last week's episode. There is a poll currently live on the Facebook discussion group where we have put the four experts from the last month of the month of February. We had Hamish Douglass, Emma Fisher, Andrew Brown and Charlie Violi. We'd love to get your thoughts on whether or not you think they should be standing on the podium at the end of the year for our fund manager of the year. [00:02:59][39.8]

Alec Renehan: [00:02:59] I feel I feel like we may be pulling it may be a little bit premature to ask that. It may also be a month. It may also be a little bit unfair to the other three to put them against the hundred billion dollar fund manager that is home. [00:03:12][13.3]

Bryce Leske: [00:03:13] You obviously haven't looked at the results then. [00:03:14][1.2]

Alec Renehan: [00:03:14] Really? I haven't I didn't know the poll was that. [00:03:17][2.3]

Bryce Leske: [00:03:17] Yeah, well, there you go. So anyway, let's move on today. We're going to be doing a what the segment will be doing, obviously a portfolio update. Then we're going to be hearing a community stock pitch from Kevin. And we'll be closing out with a new segment, this Specky Hotline, which we're going to be trialing and will appreciate your feedback. So, as always, will not as always. But I'd like to start with the what, though. [00:03:46][29.3]

Alec Renehan: [00:03:47] Yeah. Yeah. A segment that's going well in twenty twenty one. Let's play that opener. [00:03:52][5.0]

Bryce Leske: [00:03:54] So ran my watch. And this is again, we don't need any substance to it, but I just thought this was something that caught my eye during the week. We've been speaking a lot about the streaming industry. Hamish Douglass speaking about Netflix, Spotify. There is a ETF now that is specifically made up of companies that are targeting the streaming service and it's called subs. [00:04:16][22.2]

Alec Renehan: [00:04:17] ETF providers always come up with a good note. [00:04:20][3.3]

Bryce Leske: [00:04:21] Yeah, as you said, I just thought it was fitting, given the conversations we've been having over the last few months and a good way to introduce it to our community if if they were interested in following that trend. [00:04:32][11.3]

Alec Renehan: [00:04:33] That's that's not a I mean, for me, that's not what they're like. That's an interesting. Yes. [00:04:38][4.8]

Bryce Leske: [00:04:38] What the interesting. [00:04:39][0.6]

Alec Renehan: [00:04:41] Yeah. Okay, well, they can be flexible. So what is it. Audio streaming and video streaming. [00:04:45][4.4]

Bryce Leske: [00:04:46] So it consists of companies from across the globe who are actively involved in the business of streaming. So it doesn't have to be. Yes. So including services such as video, audio, live streaming and companies that create infrastructure or technology necessary to facilitate strolling. [00:05:02][16.5]

Alec Renehan: [00:05:03] That's interesting. [00:05:03][0.2]

Bryce Leske: [00:05:04] So pretty interesting. What the what the. All right. But let's move on to some more serious parts of the episode, I guess. And that is our portfolio. [00:05:13][8.8]

Alec Renehan: [00:05:14] And yeah, now, as we always say, when we start these episodes, um, this is a learning exercise for the two of us, hopefully for everyone listening as well. It is not a buy, hold or sell recommendation. We cannot be clearer about that. We are not financial professionals. We do not know your personal circumstances. And most of all, you should never take financial advice from a podcast. Yes. So we're doing this to learn to learn by doing and you should always do your own research. And yeah. [00:05:49][35.1]

Bryce Leske: [00:05:49] So I've just got the portfolio up here. And a reminder. To anyone who's just joined the show, we're building two hypothetical portfolios here, one is a core portfolio consisting of a select group of ETFs that would give us exposure to different asset classes around the world. And then the other one is a satellite portfolio where we're having a bit more fun and adding individual stocks. We've also slipped in Bitcoin and we'll be building that out as we go. We actually have an added to that portfolio in a while. And I'm okay with I'm [00:06:20][30.4]

Alec Renehan: [00:06:20] okay with that as well. Look. So at the start of the year, we were about 10 percent up in our core portfolio and about 20 percent up in our hypothetical portfolio after about six months. But our satellite portfolio was quite tech heavy and there's been a bit of a sell off in the US in those high growth stocks. And that's affected our satellite portfolio. We're now 14 percent up in our satellite, still about 10 percent up in our core. But I'm okay to sit in a little bit of cash at the moment, keep just getting paid every month, saving that money and just waiting for the right time to buy it. [00:06:56][35.9]

Bryce Leske: [00:06:56] Yeah. So I'm just looking here, and you are right, we have had a bit of a sell off. And to your point, you know, we have said that we'll be taking a thousand a month or two thousand a month for each of the portfolios. And I agree. I think for the satellite, it's a good time to start building up a bit of a cash position so that should the tech sell off continue or we see a bit of a fall in the market, we can pounce. But given the strategy for the core portfolio was to continue to just buy in [00:07:25][28.3]

Alec Renehan: [00:07:25] the core portfolio, is dollar cost average regardless of the weather? [00:07:28][3.4]

Bryce Leske: [00:07:29] That's right. So this week we will be buying into the fixed income investment, which is Ovie, which is the ticker, and that's the global government bond. [00:07:38][9.7]

Alec Renehan: [00:07:39] Terrible time to be buying a fixed income. [00:07:41][1.8]

Bryce Leske: [00:07:42] And and also the beta shares ASX 200, a 200, which will be buying into. So again, the strategy there is just to dollar cost average into our ETFs as we go. [00:07:54][12.1]

Alec Renehan: [00:07:55] No, it's not. That's easy. No emotion, not much to talk about SEP portfolio of ETFs that cover the world in a few different asset classes and we just drip feed money in there for the next 40 years until we retire. Yeah. [00:08:07][12.0]

Bryce Leske: [00:08:08] Now we will be shortly after the break hearing a community stock pitch that has potential to go into the portfolio. We haven't made that decision yet because we haven't heard the stock pitch, but we'll address that after the break. However, we do want to talk about briefly, too, I guess, partnerships that we. [00:08:29][20.4]

Alec Renehan: [00:08:29] Yeah, yeah. I think the context for this, the most common question in the discussion group is what broker should I use? Yeah, probably the second most common question is what websites and tools do the community use to like research stocks and find information about stocks? And it's a good question because there's so much like article based stuff out there that probably isn't as valuable as it should be. And so we've done a bit of work. We've spoken to a few different people, both in Australia and overseas, and we found two that we personally really like and that we personally are using now. And we've partnered up with both of them. Well, one, to give access to the Equity Mates community because it's just been built and then the other just to sort of tell you guys about it because we like it. So, um, do you want to keep it off shore? [00:09:23][54.2]

Bryce Leske: [00:09:24] So the first one that we you know, we like what they're doing and that is simply Wall Street. You may have come across it if you haven't check out their website, simply Wall Street. And they really take a whole bunch of analytical information about the company and put it into easy to understand, I guess, and visual ways to understand a bit about the valuation of companies. Now, of course, this is something that we will refer to, but we don't solely use this as our basis for research. They have stocks from, you know, all over the world and we use it as a gauge to understand or help to build out our thesis. So, for example, they'll walk through things like executive summary share price valuation, Futuregrowth, executive summary. [00:10:17][52.8]

Alec Renehan: [00:10:18] That's as far as you go. [00:10:19][1.1]

Bryce Leske: [00:10:20] That sounds like I don't need anything in the executive summary. [00:10:22][2.5]

Alec Renehan: [00:10:22] I think the thing about simply Wall Street that makes it different to a lot of the other platforms out there is that they they don't just try and give the data. They try and take the next step and analyze it and then visually represent it. Yeah. So they have these things called snowflakes where they talk about like, you know, the value, the financial health of the company, the growth, the dividend and how that compares. And it's like a shortcut for some of the analysis that there [00:10:48][25.2]

Bryce Leske: [00:10:48] was an investor. Yeah, it's a good place to start to get a to get a view of what's going. So, yeah, it's just a call out that if you do hear us mentioning simply Wall Street with these portfolio episodes, that's just because it's a resource that we really enjoy using. And you guys obviously don't have to, but we're all about helping everyone in their investing journey. [00:11:07][19.2]

Alec Renehan: [00:11:07] So just call out and they've got a free level where you can sign on to the other one that we're particularly excited about, both of them. But the other one is Ticha. And it's spelt like, ah, um, this this is a company based in the US and they have they're basically the best source of raw data we've come across. It's awesome. So it's often hard to find, you know, like revenue, profit, blah, blah, blah, going back years. I mean, like Yahoo! Finance has a bit, but there's no great ones. And then, you know, unless you're willing to pay 20 grand a year for a Bloomberg terminal or, you know, some are in the low thousands like, you know, the girl folks of the world. But Tica, we found, is the best of our favorite in terms of that raw data. Yeah, the base in the US, they're in beta at the moment. But if you want to sign up now, you can for free at ticker dot com slash Equity Mates. Otherwise you can join the waitlist and not not sign up for our link. But that wouldn't really make sense. But there's a few things I really like about it, including they have transcripts of every analyst call. Yeah. Yeah. And so you can jump on and you can read, you know, what the company executives are saying and what investment banking analysts are asking these company executives every time the company releases results. [00:12:30][82.8]

Bryce Leske: [00:12:31] We just did an episode on 13 FS as well. You can find all the information on the thirteen FS for all these companies. You can find out, you know, who's invested as instead of historical data that goes back many years. And the beauty as well as its stocks all over the world. It's not just Australia, it's not just America. [00:12:49][18.7]

Alec Renehan: [00:12:50] Both Teka and simply Wall Street are global. And for me that's a sort of non-negotiable. When I'm looking for a platform, I don't care about just Australian data. [00:12:57][7.0]

Bryce Leske: [00:12:57] Yeah, exactly. So pretty amazing platform. As Alex said, it is in beta and we have exclusive access for the Equity Mates community. For you guys, [00:13:07][10.0]

Alec Renehan: [00:13:09] exclusive free access, free jump, jump the wireless queue and you can sign up if you go to ticker dot com, slash Equity Mates, jump the queue, sign up for free, give it a try. [00:13:18][9.5]

Bryce Leske: [00:13:19] And that is tikr.com/equitymates. So we use a combo of both [00:13:24][5.5]

Alec Renehan: [00:13:25] just a wrapper bow around it and explain how how I personally use both. Um, I find that Tikr is great for Raw Data to understand what the company's numbers are and to sort of rate those analyst calls and the 13 FS look at what big funds are holding. So a lot of that raw data stuff tick is grateful. And then I find simply Wall Street is really useful when it comes to the analysis side and comparing companies in industries and, you know, in markets and stuff like that. So I think well, I mean, again, just me personally, I use a combination of the both. Um, but it's really dealer's choice people. There's a bunch of different platforms out there. But for me personally, I think for you as well, they're the two that have really added value for us. And so, you know, hopefully they add value to the community as well. [00:14:15][50.1]

Bryce Leske: [00:14:15] Absolutely. So that's simply Wall Street, Dot City for their website and ticker dot com Equity Mates ticker. And look, our attitudes might change as the years go on and we'll keep you updated as they do if [00:14:30][14.1]

Alec Renehan: [00:14:30] you're building a fintech out there and you think you can build a better platform. My website that is the same as Brokers', same as everything. Like we're living in this golden age of retail investing where things that used to be thousands of dollars or hundreds of thousands of dollars are getting cheaper. And we're all for that. So, yeah, hit us up. But yeah, we'll we'll be talking about ticker and simply Wall Street throughout the year, like when price finally comes on and does another stock pitch when we talk about community watch list, will will mention them because that's where we're going for information. [00:15:05][35.6]

Bryce Leske: [00:16:21] And we are now up to what is fast becoming one of my favorite parts of 20, 21, and that is the community stock pitch. [00:16:30][9.0]

Alec Renehan: [00:16:30] Yeah, definitely the best part of Equity Mates in 2020. It's because, [00:16:34][3.2]

Bryce Leske: [00:16:34] man, because we don't have to do any work [00:16:35][1.0]

Alec Renehan: [00:16:37] that you never do it. That's also that's also true. [00:16:39][2.1]

Bryce Leske: [00:16:40] So generally, we have been encouraging our community to come on and pitch some stocks for the portfolio. However, the volume of stocks coming through and stock pitches coming through is starting to become too much for what we actually want to add to the portfolio. So we're changing tact here a little and and doing a bit of a community watch list. So we'll be getting as many of the stock pitches from our community as possible and interspersing them just into episodes that we do each Monday, not with the intention to add them to the portfolio. If, of course, if it's an amazing pitch and it feels like we can, then we will. But we just want to obviously [00:17:18][37.5]

Alec Renehan: [00:17:18] know what we'll do is we'll take what the community has said and then claim it as our own fault. [00:17:24][5.5]

Bryce Leske: [00:17:25] But we just want to recognize the work that the community is doing and. Yeah, and give you guys the opportunity to come on and pitch. And so it is without any further ado that we welcome Kevin, a community member from Equity Mates to the show for a community watch list pitch. Kevin, how are you going? [00:17:41][15.8]

Kevin: [00:17:42] Yeah, really well this morning. Thanks for having me on. [00:17:44][2.4]

Bryce Leske: [00:17:45] That's OK. It is early Thursday morning, so thank you for taking the time, I'm assuming, before nipping off to work too. Well, this is going to be the most important part of our day anyway, [00:17:55][10.1]

Kevin: [00:17:59] usually put on the spot like this. [00:18:00][1.3]

Bryce Leske: [00:18:00] But now, Kevin, you have actually been wanting to pitch this for a number of months now and apologies that we've only been able to get around to it now. And I'm hoping your thesis for this company hasn't necessarily changed too much over the past few months. So apologies, but you're wanting to pitch A2 milk and add that to the community watch list, is that correct? [00:18:27][26.6]

Kevin: [00:18:28] Yeah, that's correct. Nice. It's probably good that I'm pitching it post the results. It's a little bit cheaper than what it was a few months back. Yes. [00:18:37][9.5]

Alec Renehan: [00:18:38] This is really throwing you under the bus with that, I think. [00:18:42][3.5]

Kevin: [00:18:43] Oh, well, no one knows. I was pitching in a few months ago. I will just say that I think the story is still intact. It's probably one where we just need to wait for you know, we'll get into that overseas travel start. [00:19:01][17.7]

Alec Renehan: [00:19:01] Let's get let's put a pin in the faces, A2 milk stuff close to my own heart for a long time, listeners of the show. But for people who are unfamiliar with the stock, maybe let's start at the beginning. Can you tell us what it does? [00:19:16][14.8]

Kevin: [00:19:18] Yeah, sure. You know, well-known brands, dairy producer to only protein cows, milk and nutritional products, and the well-known infant formula, their own Arpey inbreeding process, A2 only protein cows, which are the old Jersey cow, and they're in export out of New Zealand and have a dual listing in New Zealand and Australia. So it's not an Australian brand, which, you know, is actually in way quite good given some of the tensions going on between Australia and China, I guess. Well, in the media at least, [00:19:51][32.9]

Alec Renehan: [00:19:52] yeah, definitely. And just for people unfamiliar with the A2 A1 distinction, don't give us a 60 second 101 on what that means and why it's important. [00:20:02][10.6]

Kevin: [00:20:03] Traditionally, I think all cows were actually A2 protein cows and through years of breeding and genetics, the one protein has formed throughout a lot of cows. And that said, through research, to have some digestive issues. So the protein is easier to digest. People who do not know drinkers have stated that they've had a lot more comfortable drinking this. And, you know, they put it in all the products [00:20:31][28.3]

Bryce Leske: [00:20:32] I remember so ran and I obviously have retail background at Coles and Woolworths, and I'll never forget that period of time where the moment you would put in a to milk powder on the shelf, it was gone like just that you couldn't even fit. You could fill the store with pallets and it would and it would be gone. [00:20:51][19.0]

Alec Renehan: [00:20:51] We had to hold A2 milk infant formula behind the counter at the service desk because it was so in demand space. [00:20:58][6.9]

Kevin: [00:21:00] Did you get many customers asking you about the more [00:21:02][2.4]

Alec Renehan: [00:21:03] so many were the most common thing you'd get asked to check if there was any in the back was infant formula and A2 was top of the list. And I so I, I bought a two second investment when it was less than a dollar. And I always said when I was working at Coles that my cell signal for this company would be when. We could keep it on the shelves. Yeah. [00:21:24][21.2]

Bryce Leske: [00:21:26] So, Kevin, that's a sort of a bit about what I to does and no doubt that it's certainly becoming more and more popular as I guess people are becoming more and more aware of their dietary requirements. What else is it about A2 milk that you like about the company? [00:21:45][19.1]

Kevin: [00:21:46] It's a premium product. What I love is that I don't think I've ever seen it discounted, which is a really good sign for a company when it's never, never been discounted. You know, clearly infant formula is their name, high margin business and the way they're making a lot of their earnings from that, the liquid milk market share is now grown up to like 11 per cent. So, you know, despite it being a premium product, you know, quite a lot more expensive than other brands. You know, people are choosing oatmeal. You know, I think it's fresher and it lasts a lot longer in your fridge because it's turning over quicker. I've also found. So you buy two ladies and it's going to be used by day one weight to weight. They are sometimes. So that's, you know, just something small that I think is a reason why people buy the milk. Also, China really loves the product. So the Chinese want the best premium product. And it really is that. And you can't just set up an eye to milk only formula company. It takes a lot of science and breeding. And I say it takes about a decade to be able to get to a sort of commercial producing facility. [00:22:54][67.9]

Bryce Leske: [00:22:55] Yeah, yeah. No doubt that the China, I guess, influence is important for this business. But we also know that it can be a risk. You see what happened to Bellamy's and you saw it happen to Treasury Wine Estates. So I guess we'll touch on risks in a minute. But what about from a I guess, a price perspective? We've seen it come off in the last few months. Is this a concern for you or is this something that is exciting you given the thesis that you have [00:23:24][29.7]

Kevin: [00:23:25] looked like you are sort of originally got in the lower dollar? But I did do some buying about ten dollars a number of years ago. And I when I thought that, you know, they'd reached a new sort of platform for growth, some sort of down on that. I'm not necessarily buying more personally at this stage because I feel like I've got enough in and we just get it. Get silly for anyone. Not I mean, you know, you've got a company that's not a cap, six point six billion. They've got 770 million in cash. So, you know, really high cash balance. And if you add the seni equity stake that they've got, I think just purely on cash and it's in their investment, it's like a dollar 30 per share. So I get that there's a lot of risk to China and obviously the Digo issues, but they will come back and the brand in China is actually loved. So the infant formula brand in China, the China levels grew at 45 per cent last year. So the issue purely is around just the mobility of the day. Shoppers and those shoppers obviously emptying the shelves at the supermarkets and then going and putting that on the on the day to e-commerce network. So, yeah, you know, I think it's a company that's profitable and a lot more profitable in the past, but should get profitable and then for the 30 per cent DAVIDAR margins. [00:24:55][90.1]

Alec Renehan: [00:24:56] So let's talk about the Digo and the China story. And for people unfamiliar with that term, it's essentially tigers are shoppers in, you know, Australian stores and in other stores around the world that then sell product back to China. And that that's been an incredible distribution channel for Aitor Milk, you know, a lot of prices and not being able to keep product on the shelves because the infant formula was being bought in Australia and then sold back to Chinese customers or sent back to China to be sold. Trade tensions. Cowbird, there's a lot of there's a lot of things weighing on that channel, I guess you could say. So how do you think about the Tiger story and its future with that? [00:25:45][48.4]

Kevin: [00:25:45] They said in their outlook statement, well, for one to rebuild the segment, they're going to work with the large Tiger distributors and help sort of underpin their business with support. They didn't go into too much detail with that, but I'd gather, you know, helping get them back on their feet so that once travel does begin, they can quickly get into action and start start distributing the teams again. One of the threats, I think is. And what sort of does can say why they haven't put a lot of the teams in. PADA is director. Into China to make up. For the guy who is clearly the end user is in China, so we would like to see some more information about potentially how they can actually get it into China as opposed to, you know, losing out on the revenue growth for Diageo in Australia. But, you know, they are positive on getting back up and running once trouble begins, sort of in the latter part of this year, depending on when you see overseas travel will be unrestricted. [00:26:50][65.3]

Bryce Leske: [00:26:52] Nice. What is the reason that we've seen this price come off because of this tiger issue or what's been leading to that? [00:27:02][9.8]

Kevin: [00:27:02] Yeah, yeah. So now look, the price of sticking up around 20 bucks, they were growing earnings at around 40 per cent. Revenue was growing strongly early on in that they saw some serious uptick in sales growth and everything looked really good. But as coded more on the actual performance of the company is being affected by that daku. You know, the drop in revenue from DiGRA because that's a higher margin channel as well. Yeah. So, you know, you've got total revenue of 16 per cent, but, you know, earnings come off bit, die off 32 percent and the margins being affected, obviously, due to the Digo channel being higher margin. So our channel distribution and plus they also made that Maturer Valley acquisition of the largest dairy in New Zealand, which they seem to be in partnership with the actual Chinese state. Yeah. [00:28:03][61.0]

Bryce Leske: [00:28:05] So it feels like it's the price to the upside is the is to play with this at the moment, given that it's somewhat come off and given the balance sheet that they've got and some of the strategic acquisitions or investments that they've made, should their profitable channel of the Diago get back online, then it could be rosy again for A2 milk. [00:28:30][25.3]

Alec Renehan: [00:28:31] Yeah, yeah. I look, I'm reading some of their latest earnings call on on ticker at the moment, and the company is very aware of it like they're talking about how they understand that their business was built through Daigo. They're talking about how they're trying to build a corporate Digo channel as well as the retail one, as well as throw significant resources at their China label, direct business like they're committed. They understand where their bread is buttered for the past five years. So I guess it's just can I execute? Yeah. Yeah. [00:29:07][36.0]

Kevin: [00:29:07] Hopefully, the travel opens up and gets back up and running. I don't think it would be any problem. But, you know, until that happens, you just got to [00:29:15][7.9]

Alec Renehan: [00:29:15] you just got to hope that Jacinda Ardern keeps on China's good side. You know, if she starts butting heads, then all bets are off. [00:29:23][8.1]

Kevin: [00:29:26] Just saying, well, New Zealand, I think Agri is the largest part of their economy. So she probably will keep on the good side. I would think [00:29:34][7.9]

Bryce Leske: [00:29:35] that is, unfortunately, all. We have time for this morning, Kevin, but very much appreciate you spending the early hours of a Thursday morning before work chatting through stocks and sharing your thoughts on it. And we will add that to the community watch list. And, yeah, keep an eye on the progress with this Diago, because if it does take off again, then who knows what's possible. But thank you very much. [00:29:58][23.9]

Kevin: [00:29:59] Thanks very much. Thanks, Kevin. Thanks for us. Thanks for coming by. [00:30:02][3.0]

Bryce Leske: [00:30:03] All right. So before we jump into the second half of the episode, we'll take a quick break and hear from our sponsors. OK, so we have introduced a couple of weeks ago a new segment called What The and now it is time for another new segment that we're introducing, which is The Specky Hotline with Specky McGee. [00:30:21][18.2]

Alec Renehan: [00:30:22] Uh, look, we hear some in the Equity Mates community love talking about Spassky's [00:30:29][7.1]

Bryce Leske: [00:30:31] speculative [00:30:31][0.0]

Alec Renehan: [00:30:31] stuff. Yeah. Yeah. Microcap stocks are highly volatile, highly volatile, highly risky. Yeah. But have the potential for big returns if they come off, um but also have the potential to go to zero. And so look, we look, we're all about long-term investing here, and playing the speccy game isn't really in line with what we want to do, but we figured let's have a bit of fun with it. We've got someone from the community. [00:31:05][33.9]

Bryce Leske: [00:31:06] Well, I mean, he's not someone from the community. He's a mate. [00:31:09][2.4]

Alec Renehan: [00:31:09] Well, he's also from the community and he's [00:31:11][1.3]

Bryce Leske: [00:31:11] from the community who just loves taking silly. He's pot shots at stocks. [00:31:15][4.7]

Alec Renehan: [00:31:15] Group charts because he just will pick the most random nothing stocks. A lot of them won't pay off, but if they don't, he'll tell you about it. But anyway, look, we got to say before we start this segment, obviously, nothing on Equity Mates is a buy, hold or sell recommendation. Never take financial advice from a podcast. Do your own research, but never is that more true than in this, uh, what are we calling it? Specky Hot, speccy hot line. Um, if you buy based on whatever you hear in this segment, then we obviously haven't done our job well enough here at Equity Mates because you need to do your own research. You should not be taking advice from a podcast. Know so just. Well, every time we do this segment, I'm going to stick that caveat in the show. [00:32:09][53.2]

Bryce Leske: [00:32:10] So we will we'll play the opening for the Specky Hot Line, where we're going to call Specking McGee. And really what we're going to get from him is hopefully a bit of a lay of the Land of the Specky scene. And I think he might have stock on his watch list [00:32:25][15.7]

Kevin: [00:32:35] You've reached the Specky Hotline. Yeah, thank you. [00:32:38][2.2]

Bryce Leske: [00:32:38] Again, we've reached this very line the first time on the first time we've reached the speccy hotline here on Equity Mates. And so looking forward to this one. Yeah. [00:32:49][11.2]

Alec Renehan: [00:32:50] Yeah. Specking McGee. How's things going? [00:32:51][1.6]

Kevin: [00:32:52] Well guys just looking at the market a bit red in the US overnight, so I don't know how that's going to bode well with my spathis [00:32:58][6.0]

Bryce Leske: [00:33:00] mind you, we are recording on the 4th of March and so I think things were a little rocky over in the US. And given your focus on very short term speculative trading, that is an issue for you, but not an issue for us. [00:33:14][13.8]

Alec Renehan: [00:33:15] But you wouldn't care about how the indexes go because you only care about Specky microcaps. [00:33:20][4.3]

Kevin: [00:33:20] Don't you like flavor of the Month? Is ASX microcaps? So and that's the one I've got for you today, boys. OK, ok. What do we got so. Well we're looking at eye candy, eye candy, interactive stocktake, sky blue horseshoe loves. I can [00:33:37][17.1]

Bryce Leske: [00:33:40] do you say we as if you have a team around [00:33:43][2.5]

Alec Renehan: [00:33:43] you, three of us on the line here. [00:33:46][2.8]

Kevin: [00:33:47] That's true. [00:33:48][0.3]

Alec Renehan: [00:33:48] All right. So, Becky, tell us about eye candy. [00:33:52][3.1]

Kevin: [00:33:54] OK, so it's a mobile gaming company. So they manage a portfolio of mobile games, and that's pretty much what it is that it's called. It's small trading at 12 cents at the moment with a sixty eight million market cap. So we've got a lot of upside here, boys. [00:34:10][16.5]

Alec Renehan: [00:34:11] Oh, yeah, apples, two trillion. And this is sixty million. So much upside. [00:34:17][6.0]

Kevin: [00:34:19] What's to trade divided by sixty eight. [00:34:21][2.0]

Alec Renehan: [00:34:21] No, I don't know. We didn't get into this today. That's all right. So it makes mobile games prices a notorious mobile game. A lot of well ran. [00:34:35][14.1]

Bryce Leske: [00:34:35] It's funny you say this because and I hate to admit this because it does pump up the times of Specky Margay over here, but I haven't looked at I can not fact. I think I in fact, I, I think I'd have I'd had discussions offline with Specky McCain told Specky McCain. I think months ago we spoke about it. It may have come across Specky McCain's desk and he mentioned it to me and I kind of liked the look of it but didn't pull the trigger. Am I right this weekend? [00:35:05][29.9]

Kevin: [00:35:05] OK, well, we haven't met before. Brian, this is. This is a private line. This is private, no matter how you got it. This will continue. [00:35:15][9.6]

Alec Renehan: [00:35:16] I think Price has been doing some sneaky close to the speccy hotline when I'm not around. [00:35:20][4.2]

Bryce Leske: [00:35:22] It hasn't paid any dividends yet. [00:35:24][1.2]

Alec Renehan: [00:35:24] So, Specky, tell us, why do you like this company? I'm sure there's a bunch of companies out there making mobile games. What is it about eye candy that you like? [00:35:35][10.4]

Kevin: [00:35:35] OK, so if you're looking for a proper Day-Day, we're not going to get it. [00:35:39][4.2]

Alec Renehan: [00:35:39] Oh really? No, that's not what I miss. The point of the segment. [00:35:43][3.7]

Bryce Leske: [00:35:45] This is short in shot. We call it a sister company. And what's going on in the Reddit scene? Yeah, we're not getting a debugger. [00:35:51][6.5]

Alec Renehan: [00:35:52] Go. Hey, Specky Specky. I apologize. I was for that. [00:35:56][3.5]

Kevin: [00:35:58] So look, the same. The same is good for me. So mobile gaming, low marginal costs, all it takes is for one big game to take the market by storm. You know, I like your big candy crush. So so you can sort of see just how quickly and rapidly a game can just go bonkers and bring in revenue. So that's what it is. It's high risk. It will I can find the next Candy Crush. So I'm getting my candies mixed up, can crush Clash of clans, Angry Birds, anything like that. And we might be moving. [00:36:34][35.9]

Bryce Leske: [00:36:35] So maybe that's what I like to we like some moving. So the other thing before we wrap up, Specky McGee, is that you obviously have your finger on the pulse when it comes to the Specky community across Reddit and another dark black web, dark web sort of communities that you're involved in. So is eye candy trending in these communities? Is there much going on? [00:36:58][23.0]

Kevin: [00:36:59] So that's the interesting thing. It's not actually trending right now, which is why I think there is a bit of potential, because it's not just [00:37:07][7.4]

Alec Renehan: [00:37:09] stocks that are trending right [00:37:10][1.4]

Kevin: [00:37:12] next. Yeah, OK, so I'll start by saying there is an ASX that's read page, which is quite interesting, if you can. I'm reading a bit more about ASX wikis and that sort of thing. I'm sure you guys have talked about the Wall Street that's GameStop saga. Absolutely. Which is just inherently very fascinating. So if you're interested in reading about what's going on in the ASX, Spanky's community, I'll check that out. As opposed to some of the Facebook groups like the [00:37:41][29.1]

Bryce Leske: [00:37:42] Equity Mates, [00:37:42][0.3]

Alec Renehan: [00:37:44] the ones I get. Oh, you would be. I'm just going to say you'd be a moderator of sexperts, wouldn't you? [00:37:50][6.0]

Kevin: [00:37:50] Not quite. I'm trying to be. But the other thing about eye candy is it's got a relatively high RPI at the moment. [00:37:59][8.7]

Bryce Leske: [00:38:00] What's REI [00:38:00][0.2]

Kevin: [00:38:02] so it's the rocket emoji indicate. [00:38:03][1.3]

Bryce Leske: [00:38:08] Okay, that's good. That's good. [00:38:10][1.7]

Alec Renehan: [00:38:11] This is is that a proprietary metric run by the whole thing. [00:38:15][3.9]

Bryce Leske: [00:38:18] We have truly heard it all, especially Maggie. Unfortunately, that is all we have time for this morning. But I think there's a throw out to the community that if if you would like any of your Spassky's to be run past Specky Maggie to get his thoughts on the R A I the rocket emoji indicator, or whether or not it's trending in social circles online, or if you'd like him just to continue with the deep dives and quality discussion that he's brought this morning. Please hit us up on our social channels and we will ideally give him about birdbaths maybe once a month. Yeah, check in on this. [00:38:57][38.5]

Alec Renehan: [00:38:57] Any vaccine, any Spassky's will pass on and he'll if he's got time, he's got a lot of sparkies going across his desk. But hopefully, he'll be able to feed back in REI. [00:39:08][11.0]

Bryce Leske: [00:39:09] he's coming across his desk so that we got an eye candy interactive this morning. The ticker is ISCI on the ASX. This was absolutely not a buy or sell recommendation. As you can hear, there was no substance to any of that. [00:39:25][15.6]

Alec Renehan: [00:39:25] And look, we with a lot of these community watch lists and stuff we say will make a page on our website to track them. We're explicitly saying we will not be making a portfolio of [00:39:35][9.7]

Bryce Leske: [00:39:35] do it offline. [00:39:36][0.3]

Alec Renehan: [00:39:36] All of the spaces that we discuss in The Specky Hotline. [00:39:39][3.3]

Kevin: [00:39:40] Thank you for having me. Thanks for the wrap up. I understand it's not to wrap it up. And I just don't actually buy this stock. It's not a recommendation. It does yet inherently stressful and risky. So I wouldn't recommend it. Yeah, I would. Just before I drop off, I just want to play you guys a bit of analysis. I came across by equities analyst Aaron Carter on eye candy. So that's going to be my finishing moment. So this is what he had to say. [00:40:09][28.7]

Alec Renehan: [00:40:22] Oh, well, I look, aside from the fact that I completely misunderstood what we were doing in that segment. I thought that was great. We got we actually got an Instagram day that we should be more serious. So we've definitely pissed that person. Yes. But I look like, oh, we enjoy talking about stocks and literally that's what he's like in our group chat, so. [00:40:48][26.3]

Bryce Leske: [00:40:49] Well, that was the Specky Maggie Specky hotline. As we said. If you'd like him to give some quality analysis like that, then please hit us up on our Sociales, but ran to close it out. A reminder that we do have Mapei Love, which is one of our new podcasts which discusses the money side of relationships, and comedian VÉ Economist, which unpacks the world of macro economics. So go and check both of those out and don't forget about get started investing as well, covering the fundamentals of investing. But when that brings us to the end. Always good to chat and we'll pick it up next week. [00:41:26][36.4]

Alec Renehan: [00:41:26] Sounds good. [00:41:26][0.0]


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