the call: Thursday 28 May

[MUSIC] The call is brought to you by Centuria, an ASX-listed property fund manager with $21 billion in assets under management. Want to diversify beyond equities? Explore the Centuria Sydney CBD Prime Office Fund at centuria.com.au. [MUSIC] Well, good afternoon to you and a very warm welcome to the call. One hour action packed, we will discuss 10 stocks that our viewers have told us they'd like a buy, hold, or sell call. On end, we will also cover a stock of the day. To do so, a very warm welcome here in studio with me is Howard Coleman from team invests. Thank you. And also joining us is Adam Dawes from Shawn Partners didn't feel like braving the rain in Sydney today. Did you? Yeah, it was a little bit tough to get out, but yes, you're right, Nadine. Yeah, now Adam, today, we've given up all of yesterday's gains, at least this far, into the session just past noon here in Sydney. What do you make of this off on geopolitical tension that continues to either boost or sour sentiment? Yeah, it's just the increased volatility. I think that, Dan, it's sort of unnerving investors. And we're certainly seeing that gap up and gap down in the market over the last two or three weeks, which has really been really tough for investors to just to get a handle on which direction this market's going to go. But yeah, I think the volatility is unnerving people, as well as then, you know, this market is very headline driven. So we're just continuing to jump from headline to headline and with no real sort of fundamental side of it. And then if you look into the US market, does the NASDAQ really care about what's happening in Iran? They probably don't. They're more worried about what's happening in the AI space. And so this NASDAQ market, which is very much quant driven and sort of just, you know, not fundamentally driven just, you know, sort of these computers just moving in and buying it. NASDAQ really doesn't care too much. And that's why you've seen the, you know, the NASDAQ just continue to create new eyes going forward. So that volatility does unnerve here. Investors here in Australia, then you overlay some of these RBA stuff. You overlay rates, you overlay CGT and the government, the budget just seems a bit hard at the moment for us here in good old Australia. Yeah, I know. It is. What are you keeping your eye on right now, Howard? Well, of course, we love volatility because that gives you the opportunity every now and then to pick up some company at a lovely low price, a company that's really a good business and you'd like to own. And of course, if it's volatility in the other direction and in the very occasional time that our members decide that the company they've owned for a long time, they no longer want to own, it's nice when it goes up there, but I think Adam touched on a lot of obviously what's been going on. But the two big things sort of that our members seem to be talking about is number one, the standing joke is that this volatility goes every morning when Donald Trump wakes up. He has to figure out what would make him in the news that day. And if he says the same thing he said the day before, that's not newsworthy. So every day he's got to say something contradictory to what he said the day before. That gets him in the news. The market gets carried away with this other than Pepsi, and it says the Nasdaq. And the second thing, of course, is we're in this peculiar situation at the moment where every time a government minister in this country opens their mouth to talk about the budget, it shows even more how little I understand economics and how little I understand how businesses are created, built the risks on troppo news, take the risks investors take, and that on troppo news don't work the same number of hours per week as people in a regular job. They probably work twice as much. I mean, I've started a number of businesses over the years, and if I was only working 60 hours a week in a business in its early stages, I thought I was doing really well, and I paid myself almost nothing later on. I reap the benefit, but to quite working in a job should pay the same as risking your money, working longer hours, not paying yourself much as an entrepreneur. It just shows that the people who come up with these things have an acclue. Absolutely no idea. Some of them are career politicians, but this is a conversation for another day. We will take that on board Howard. Thanks to you both for setting the scene. Let's get to our stock of the day, which is SiteMinder. So SiteMinder has launched its powered platform, and it's doing so in conjunction with a group called Muse with its first partner, embedding its distribution engine into third-party hospitality systems, which SiteMinder, of course, says will unlock new revenue opportunities. Under the new system, hotels will be able to integrate SiteMinder's technology directly on their platforms without using the SiteMinder platform. So an evolution, so to speak, of SiteMinder. And shares have responded pretty well indeed up 33 cents to $3.37, or roughly speaking 11% right now. So let's find out what my guests think of our stock of the day site. Mind, I might start with you on this one, Adam. Do you guys cover it there? Sean Partners, do you know it? No, we don't cover it. However, I've been in and out of this one a fair few times. So it looks quite interesting and it looks very interesting now that they've put this thing together because it does feel like it's now starting to break out to the upside on this one. And I think for that, that M.E.U or the Muse does give some more bullish commentary around what's happening. But it was also that the Australian accommodation software provider, which is SiteMinder, has more of an incentive and Muse has more of an incentive to sell SiteMinder products in a partnership that could increase their overall access to new customers, as you said in the Dean. But this one does look like it's picking itself off the canvas, which is quite good. But we remember that SiteMinder has around about 7,000 properties that they use those channels and they have their system in place with that. But that's really, there's around about 53,000 properties that they could actually have access to. And remember, it's not the large ones like Hilton, those kinds of things. It's a mid-tier space where those hotels sit and it maybe motels and those kinds of areas where maybe they've got four or five properties but nothing like a Hilton or a core or something like that. So there's a lot of market share that these guys can actually take. And I think this is one step in the right direction for it. Obviously the stock has been hit with the AI overlay. Can AI do exactly what SiteMinder does and do you need SiteMinder to do that? But potentially with this new agreement, this does sort of somewhat cement SiteMinder as a way for medium-sized hotels and small hotels to keep that booking engine moving forward. So it does look good and if this thing does continue to sort of rise, I think this is a buy because this is the first turnaround from, as we saw on that chart, the sort of the peak and then all the way down and now flattened out and now starting to move higher. I think if that momentum can continue, I think this one does look quite good for a quick buy or a good trade in the market. Okay, so buy but you'd want to be on it. You'd want to keep your eye firmly trained on the information. So look how are this? Is a company that has been growing? It's AR, growing, it's revenue, it's guiding for strong growth and improving profitability in FY26. What do you make of it? Well, it's a profitability because it would have to improve infinitely to be equal to zero. But you know, it's a company that doesn't make a profit. It's a good thing they didn't call themselves profit-minded because they would have been something that A triple C could have maybe got upset with them about. But be called SiteMinder is fine. It certainly won't be a good money mind in our opinion when you look at it. I mean our members would look at the Nate Sates, be listed for four years. It's made big losses every year for four years. It's return on equities about minus 40% on average per year, which means 40% of all your money in the company is evaporating. It's smoke every year. And look in the end, it's a story. You have to come up with a new story every now and then if you're not back any profits because you can't report your profits. And at a may well turn out to be right in that it's a good trading opportunity. But as a long-term investment, you want to be invested in companies that actually make profits. And this isn't one of them. So team investment members would look at it and shut us. So a cell if you own it from us. But I don't know anything about the company. I wouldn't spend any time looking at it. Yeah, got it. Well, on a stancer's own, Lisa, I always say how are it? So Thanks for keeping us real. All right, let's get to the first five stocks. These ones have been picked by you. That includes Remi for TabCorp Zipco Flight Center, Cogin, which had a pretty well-received update earlier in the week and AML 3D. That one's for Roman. If you would like us to answer one of your questions, just go to osbus.co/callpix. Let's get to the first stock of the day. Pick by you, Remi. It's TabCorp, T-A-H. Look, what do you make of TabCorp? We've got UBS with a buy. Morgan's in Accumulate. Otherwise, pretty lackluster ratings from the brokers. What about you? Yeah. I think Remi's one of our regular viewers, and quite often says in question. So thanks, Remi. TabCorp, when I look at its numbers, it's almost impossible to predict. It had a terrific profit in 2022, which is probably the sale of one of its pods. But other than that, its return on equities incredibly low, which is strange for anything to do with gambling, because usually these are very profitable businesses. And it's earnings per share today are a fraction of what they were 10 years ago. So the company has really gone backwards over the last 10 years. So little all from our point of view to enthuse us, and it's also done some capital ratings in that time over the 10 years. So they've been asking their shareholders for more money by the looks of it than they've been giving to shareholders. So these very look like and see in any of the fundamentals that makes me enthuse. So from our point of view, no. Yeah. A sell. But, Remi, if there's something you know about it, that makes you enthused about it, and it's in your circle of competence fine. But certainly nothing about its fundamentals that would suggest it would be a worthwhile investment. Yeah, and looking at that chart out of it kind of reminded me that we had OzTrack looking into TabCorp just, I think it was earlier in this month. So looking at its ability and its willingness to really keep an eye on and mitigate money laundering, terrorism, financing risks. I mean, it is a betting agent, right? So does that sort of-- Sorry. And who would have thought that things where you can be? Would not be used for money laundering. Yeah. What is a problem? I know. I know. It's sort of like Captain Obvious gives you seen that one coming. But I mean, it's just going to be an overhang on the stock for quite some time until it's resolved. I think so. And I think I'm just probably the only one that Howard and I are going to agree on today. So it's going to be a good one to actually go with. But yeah, look, TabCorp basically said that they're cutting costs. And so obviously they have to. And you can see that that for-- it's obviously when Tatisels was rolled out or TLC, the lottery corporation was rolled out. And basically, TabCorp came in with like $1. That's where it sort of landed. And that's where the split wasn't now. Obviously, I think it did hit around $0.50. But now, at $73, I'm agreeing with Howard. It's a cell. I've moved away from this one for a while now. I don't see too much going on. They are talking about wagering yield compressions driven by unfavorable results. During AFL and NRL finals. I mean, usually these guys would be able to hedge out a lot of that kind of stuff. And they shouldn't be really too fast about what's going on. But yeah, there's no real need to be there. And I don't see it getting up back up the fight bucks, or even $2 anytime soon. So it would be a cell for me also. All right, so we'll see if that's the last time these guys agree or not. Let's get to stock number two. On the list, that's zip code. This one is for Nathan. Howard, I'll start with you on zip code. Look, many think it's sort of on its way as far as the turnaround story goes. Yeah, I mean, one thing it's clearly very good at. And that's raising money because it has had a capital raising almost every year. It looks like for about the last five years. So it's very good at asking its shareholders for money. When I look at the company overall, it's only made a profit once in the last 10 years, but it is the most recent year. So I suppose that's a positive. But it's so easy to manipulate your figures to make it look like you made a profit once that even unprofitable companies can show a one year. If profit, I'm not saying they did that, I'm saying that it is easy to do that. And our members and team invest one company to be consistently profitable before they're interested in looking at it. And it's so, I would say definitely no from us. But it's certainly not a company we've ever spent any time looking at it, just looking at those two things, the constant capital raising and the fact that it's only once made a profit would mean that it would be, if anybody suggested it and a team invest in eating everybody, it's saying now we don't talk about that, let's move on. All right. Gosh, I wonder, I'm going to come to one of these team invest meetings. I don't know what you guys talk about there. We will come up in one. See us out like that. Yeah, all right. I know. I have been invited. I can't get away from the office. I love being here so much. Adam Doves, what do you think about Zip? Because I know that there have been moments where we've thought that the ship is really turning. But as we've said many times, takes a long time to turn a ship around. Yeah, it certainly does. And I think the market's definitely focusing on the US expansion. And that obviously is continuing to do quite well going forward. Obviously, the Australian New Zealand side of things is very mature. And so it doesn't really see a lot of growth in there. But this is a growth company. And to how it's point, it does raise capital, yeah, because it is a lender for money. And it needs to continually top up the coffers to allow more people to borrow and for them to lend. So it does-- it is a-- yeah, it's a broker's paradise, as far as continued to raise capital or a corporate paradise, because they just need to continue to raise capital. But one of the things that we're seeing and the reason why the stock has rallied a little bit is that those credit losses that we saw have been a lot less than what we previously thought, as well as then we thought that credit losses are peaked in the third quarter of this year. So we're thinking that that will continue to go through. This is in the US. But spending trends in the US is actually quite interesting to see the spending trends. We use Ziv here in Australia, if you need to go by potentially birthday present, or you need to go get a new trampoline for the kids or something like that. We're seeing-- or Ziv is now telling us that in the US, Ziv is being used for more nondiscretionary items. So in other words, food, petrol, those kinds of things. Ziv is actually seeing the bulk of their transactions is nondiscretionary, which is the fastest growing spending category in the US at the moment. So that's really interesting to see how that is being used. And as well as the product innovation in the US, they're doing pay-in-two. So we pay-- not pay-in-four, which is normally what they do. It's pay-in-two, so you can pay it off quicker or pay-in-eight. And that has increased their customer engagement substantially in the US. So I think it's all about the US. I've always been a positive one on this one. So I'm going to say it's a buy from me. I really do like the story. I like the way that they've concentrated on the US, and they're doing quite well. And it does give us some real insight into the consumer and the behavior in the US. But I think the US being the largest consumers in the world, I think Ziv is very well placed to take advantage of that. And that's a buy from me. It's also a buy from city or its UBS. Macquarie is outperformed with a 52% to reach its price target. Consensus price target is $3.27. So make it up what you will. Don't forget, folks, out there. This is information. Only this is not financial advice. That's it, Koshy. Here, did you know becoming an Osbus contributor gets your stocks straight to the front of the queue at the call? And to the expert of your choice, if a big if, you become an Osbus contributor, it's our small way of saying thanks for your support. The link to become a contributor is in the show notes. And we'd love it if you could leave us a review as well. Thanks for listening. OK, let's get to the next stock on the list, which is Flight Center. This one's for Aaron. Aaron, what do you make of it? I don't know if he already holds it or if he's looking to get into Flight Center. Well, Flight Center has been a very well-run company for a long time, but unfortunately for it, it's got the problem that circumstances beyond its control every now and then come and beat it up. We had COVID, where people couldn't fly for a number of years. We had volcano erupting. We had a whole lot of travel got disrupted for a while. And now we've got wars. So, and the sort of wars that don't look like they're coming to an end very quickly, either, if anything, it looks like more and more countries are getting to the same sort of state. It's terrible for the world. Not great for Flight Center. The one good thing about Flight Center, though, is, in fact, a couple of good things, but the one good thing is they really, really report thoroughly. So you always know what's going on in the organisation. you're always filled in, you get the full picture. which parts of the business are doing well, 60 odd slides every couple of months. So you can't ever accuse them of trying to paint a rosy picture of something that isn't rosy, they tell you it as it is. But until all of this international problems that they can't control goes away, all they can really do is try and get more efficient and they're using AI internally to be more efficient. So apparently 16%, they can handle 16% more customer, the customers per worker than they could a year or two ago. They've cut their footprint of stores. If you owned it, I'd say, hold it. But it's hard to get enthusiastic about it until traveling gets easier for people to do and less of a concern. - Yeah, I mean, it recently updated at an investor day, I think it was, saying that, you know, the fourth quarter performance has been impacted quite, I think the word is heavily, heavily by those Middle East intentions. I mean, again, this is a business item that, I mean, is it just too hard basket right now? - Yep, yeah, I mean, how it's absolutely right, the amount of stuff that's been thrown at this company and the amount of stuff that it's had to endure is just ridiculous. I'd like this one to be one of those sort of bottom draw stocks, but I just don't think that you'd want to be there either on this one. The problem is with this flight center, they've got really two segments, which is one is the leisure segment and then the two, the corporate segment. We did, you know, there was a while back where we looked at it and talked about that corporate segment being a growth sector of flight center going forward and we've seen other corporate travel, other stocks getting absolutely out the back door on that. But the corporate still remains resilient. However, the leisure segment is the one that's getting really, really challenged. And obviously with that, as Howard said, wars, you know, disruptions, all of those kinds of things are definitely hitting this one going forward. And they're obviously then sort of talking about earnings downgrades going as far as into 2028 as well. So they're really preparing the market for that consumer weakness, the degradation of their booking volumes and everything else going forward. So I just don't think you need to be there. I'll be a little bit more aggressive with this one. I think it's a sell. I've never really liked it as much. And remember, at $20 when COVID hit, they had to raise their entire market cap again to stay alive. So probably $10 actually looks like it's fair value here. But I think there's too many things in front of it and you just don't need to be there. It's a sell from me. Got it. All right. So you two do agree? Although Howard was generous with his full recommendation. Oh, I know. I was surprised. Very surprised. Yeah. Only because at least they thoroughly honest and you always know what's going on. But isn't it likely to make you a lot of money? No, I don't think so. Yeah. All right. Let's see if stock number four can make us some money. If we think about it that way, that being Cogin, K-G-N is the ticker code. This one is for Aiden. Yeah, I'll start with you on this one, my friend Adam, because it did update earlier this week. Have you ever owned this one on behalf of clients, or at least in the past few years? No. No, not really. I think, you know, Cogin did have a great business model as far as selling cheap TVs with his own brand on them. And you know, when it came around many, many years ago, it was probably one of the first online retailers, those kinds of things. I think overall, the results have been good. But I'm a little bit cautious about the second half. We're asking some earnings changes to their revenue and EBITDA assumptions as they did beat in the first half. And the current run rate, but I think the second half looks marginally lower as well. And so I think I've got to be a little bit careful with this one. The price targets that I've seen for some most brokers are around that $3.84. So I think it's fully valued here. It doesn't pay, it's a 3% dividend yield. So there's a little bit of profitability coming back into it. But look, I think that there's plenty of other online retailers that you could get access to, and that are doing so much more. And Amazon is a clear winner in this space. And look, if they even wanted to take Kogan out or even sort of squash, but it's too small. But it's just squash that. I think Amazon could really just change their algorithm somewhere along the line and Kogan would be out of it. So for me, I think you'd take some profits. If we go back to that sort of that yearly chart, you can see it's hitting up around that $4 mark, which is about the third top on that chart there. I think that does show you that there's potentially there you could take some profits and move away from this one. So it would be at hold a best to make sure that it does move forward. But yeah, the yearly one. But anyway, yeah, so it does look a little bit. And I take some profits up here. It'd be a hold from me at best. All right, so that's the five year. We'll bring up the one year when we ask Howard Coleman what he reckons when it comes to Kogan because to Adam's point, you just buy the cheap, you just buy from the cheapest supplier when it comes to this kind of stuff. Well, this is a perfect example of a company that did very well for a few years because it was doing something new. It was using the technology, internet technology, to do something that other people were doing. It wasn't brand new. But it was really doing it well for a short time. And it's priced got up to $25 a share, which is incredibly high. And if you look at its fundamentals for those four years, they look terrific, higher return on equity, low debt growing earnings. But then of course, there wasn't anything unique about it. It didn't have big wide modes. And like all new technologies, they can make people money for a short time in the long term. You know, I mean, we all use telephones. AT&T was once upon a time going to make everybody rich, so it was Telstra. We all fly in aeroplanes and when the Wright Brothers first flew the first few airline companies after that, we're all going to make everybody rich. But of course, the airline companies don't make money. So like all new technologies, they don't have very strong modes for the individual player and Kogan didn't. After a while, everybody else does it as well as they're more better. So if you look at the last four years, they've been terrible. It's lost money three of the last four years and made a teeny weeny bit of money the other year. First four years look good. So you know, the lesson in this is you've got to watch a company for a fair amount of time to know that it's going to be a long-term wealth winner or be able to identify its modes as being really strong, which it doesn't have. So as Adam says, I mean, Amazon could squash it if it was interesting. Yeah, if it even sees it. I don't even see it. So, you know, even at $4 to me who would put money into that. So our team, investment, would look at this and say, now it was a good story for a little while. I don't think any of our members are invested in it because they saw it as they'll make money for a little while out of this technology and it won't last. Yeah. Do you sort of steer clear of retail now anyways in this environment because we've got such cost-deliving pressures? Well, as a sector, retail is going to do badly. But if a retail does really badly, if it's only a little bit badly, doesn't help anybody. Everybody loses. But if it does really badly, lots of retailers go broke, which means the remaining retailers that are left behind have a massive increase in their profits. So if you pick two or three at a maximum, one, if you only want one, really, really good retailers stolen in your portfolio, ones that are likely to be beneficiaries when their competitors go broke and they've got to have no debt, they've got to have reasonably decent leases. If they're really strong, you are likely to be a beneficiary for retail really goes badly. Just a same question to you because we did have that monthly inflation read that came through yesterday, Adam. Seems to have got people excited that the RBA might be able to press pause when it comes to interest rate hikes. Do you start now to look for some value in some of these beaten down retailers? Yeah, absolutely. We've been nibbling away at JV High 5, and we've been nibbling at West Farmers. Obviously, West Farmers is more of a conglomerate, so it's got the lithium, it's got the chemicals, but it does obviously have bunnings and came out and even with cost of living pressure, I think Kmart does very, very well with their marketing and all of their branding and you can go and buy a pair of kids' jeans for $4. So I think naturally Kmart will be, a lot of people will gravitate with cost of living. And JV High 5, that stocks down 30, even 40% from its peak. So that's bare market territory if you're sort of talking about movements in share prices, but these guys are very, very good at what they do. And JV High 5, people will spend money on tech, more than they'll spend money on food or they'll, you know, that kind of thing. It's that recycling of laptops, phones, those kinds of things. JV High 5 is in the box, so we have been nibbling at both of those for our clients portfolio. And I dare say that you and Howard are going to agree on yet another thing today, being JV High 5. Absolutely. You know, it's one of the small number of retailers that is lucky to be a big beneficiary if lots of retailers close. because they can't carry on. - Yeah. Got it. All right. - Good point. - Let's get to stock at number five. And that is AML3D, AL3 is the ticker code. This one is for Roman. So this is a large scale 3D printer, sort of in the manufacturing space. It has one a couple of contracts in fact with the US Department of, I guess this Department of War now, you speak all the Department of Defense. And also the US Navy. So this one, you know, clearly in the more smaller, spec key end of the market. But what do you make of AML3D? Has it got a real business there, Adam? - Yeah, it is interesting because you've got, there's been this sort of this manufacturing or 3D printing or additive businesses that have come onto the Australian Stock Exchange. Over the last coming couple of years, you've got 3D A, you've got AML3. There's a couple of others that have come on to the boards on this one. I think certainly that US Navy demand and the key for these guys is to have some really good appointments in the US that are closer to the Defense Department in White House to try and make these things work. Now these guys get paid at a very large amount of money to be able to then sway the Department of War as you rightly pointed out to get these contracts to make them move. I mean, with the Navy, I think, you know, Oster is probably a better business for shipbuilding versus what they're doing here. But certainly the investment side of things and the additive business that they do run. It is quite volatile and even today we saw 3D A had a fire inside of one of their manufacturing. Nobody was injured and it was fine. But these are the kind of things that you just got to have a bit of a handle on for me. I like 3D A as a better business than AL3. So for this one, it is very speculative and biobie where you've got to understand what these guys are doing and you've got to understand management. So if you hold it, I would say it's a hold. But, you know, for me, 3D A is a better business and I'd slap a buy on 3D A. So for this one, it's a hold for the use of this show. And my bonus buy today from you, Adam. So you can relax now is 3D A. Thank you for that. So Howard, what do you make of it? I mean, some of these contracts, whilst they are good, you want to see this technology being proven up, you know, a $2.6 million contract, I think it was with the Department of World with the Navy, I think it was for 3D A. Like that's not a massive contract. No, so the profit on that may be 250,000 or 500,000 and they lost 7 million lost here. So it may make a slight dent in their losses, but it's a company that's lost money every year and it's another one of these ones where a new technology sounds like a great story. Everybody wants to pile in, but in fact, it's not all that new because at a Harvard, one of my Harvard class reunions in Portugal about 15 years ago, it made me 20 years ago. One of our classmates is based in Portugal and there's factories there in Brazil and in Israel. He was already involved in 3D printing and his biggest customers were the motor industry. And he was a pioneer, so he was giving us a talk on 3D printing, which to all of us at that time was brand new, exciting technology, we all got very enthused. That's a long time ago. So by now it's old hat and there's plenty of people doing it around the world. So the margins of shrunk dramatically. So even though they want a defense contract, they're not going to make even though defense waste money like crazy or department award ever, it's cool. I can't see that this makes much difference and the company's been listed for six years. It's made big losses every year for six years. There's got to be better places to put your money on the ASX. - Okay, so that's an avoid or a sell. All right, Roman, you make them all that what you will. Oh, let's let the guys wet their whistles and I'll just run you through quickly but we've learned so far, SiteMinder, a buy for Adam but a sell or an avoid for Howard. So losses is what Howard is pointing to, but look, Adam isn't saying this is going to be necessarily a long-term hold. You have to watch this one closely but it looks as if it's breaking out to the upside. TabCorp, they agree on this one. It is a sell for both of my guests. Howard points out that it is impossible to predict and if they're cutting costs, Adam says they're doing so for a reason. Zip, it is a buy for Adam. He reckons that they're doing quite well in the American execution. It's a no or an avoid sell for Howard. It only has been profitable once and that's just not enticing enough for him. Flight Center, a hold because I think Howard has a lot of respect for how the company has been run, which is very difficult for Flight Center through most of the circumstances out of its own control. That's why Adam says that it's just too hard basket it's a sell for him. It looks around fair value right now. Cogan, it's a sell for both of my guests or take any profits if you've made him in the past year or so says Adam fully valued plenty of other retailers out there. They both like JB Hi-Fi and no real notes. Howard points out as well. And AML3D, it's a hold for Adam 3D A. So Amaro, I think it's called Amaro, is a buy and AML3D is a sell because it's a loss making business. All right, guess what, next week we'll be bringing you a fresh episode of the Investment Committee, can't wait. So check out the last one on osviz.com.au if you haven't already. Here's a look at the PyGraph. If you are listening to this in podcast form, we've got 9.8% BHP exposure, 3.8% market weight to CSL. We've got new month up at 8.8% of the portfolio cash to spend 7.7%. So we'll bring you that new episode on Monday. So far, the fund is up by 32.25%. So please do keep sending in your requests when the stock gets a double buy, which we have not had on this program. So far, at least, it gets sent to the Investment Committee. You've worked hard for your money all your life. Now your money needs to work hard for you. Whether you're building, transferring, or drawing down, the right information makes all the difference. At osviz.com, you'll find the latest news and insight from trusted experts all in one place. Osviz.com is powered by RAN. Retirement income done differently. Well, let's get a look at the next five stocks on the list. Ventia is coming up, Judo Capital for Adam, not that Adam, but another Adam. Thanks for watching or listening Adam. It's like the healthcare, Dexas convenience retail rate, and data three. I wonder if that's been directed to Howard himself, but let's take a look at the first on the list. And that is Ventia. So VNT is the ticker code. I'm not exactly sure who wrote this, sent this one in. So maybe I'll just start with you on this one, Howard. How resilient to businesses is likely to be, even if we see some sort of an economic slowdown. Well, it's in engineering services, which means it does well when the economy's booming, doesn't do well when the economy isn't. And Kenber seems to be trying very hard to cause the economy not to do well. So, and particularly in the sort of engineering and construction, would you start a new mine in Australia now, when you could rather start when somewhere else in the world is an example, would you start a new business in this country when you could start at somewhere else in the world instead? And I mean, different people will have different views on this. But I can't say that there's a lot suggesting engineering and construction services, which is what they're in, is likely to grow rapidly. But having said that, it's only been listed for a bit years. So we don't really have enough information. But so far, it looks good. So you'd have to say that on the time it's been listed, it looks good, and it's the kind of company. You know, it's got high return and equity. It's growing its earnings. The one thing that doesn't look good is it's debt is high. Its debt, equity is high. So I would say there's probably a few members who'd look at this and say, let's look at it again in a few years' time when we've had more than a few years of history. And we've got a longer time. And let's see what they've done with the debt. If they've started paying it down, and we've now had six years of profit, then our members may want to look at it. So maybe a company worth looking at. But in similar services, you could invest in something like Monodelfus, which has got most of its business in mining related things, or the other engineering services businesses. So it looks good but too soon. OK, great. So that is Watchlist material for Howard. Adam, what do you make a vent here? Do you like this one? I'll take that as a buy, Howard. So let's put that as a buy. Let's put that as a double buy, because I think this one-- It's not a lot of money. And a lot of money. Oh no, go on Howard. That is definitely a buy. All your four metrics, it was only one that it didn't hit. So I'll take that. Well, and the timeframe, timeframe as well, Adam. All right, talk to us. And they've got to pass all four-- every one of the metrics, our team in this-- It's really fascinating. I mean, though, interesting. There you are. So I have to do that. All right. It's up by 31.5% over the past year. Can it go higher? Yeah. I think it can. But out of the Macquarie conference, this is the only company that really impressed me from the depth of the management and their team was a clear standout from the Macquarie conference, right? Hence why the stock has started to rally and quite substantially rally on after the back of that Macquarie conference. A lot of it, how is this right? It's in engineering construction, but it doesn't do a lot of mining. It's more essential services and mainly government related customers. And so I think that that's obviously giving you that sort of clear, stable side of things. They have talked about lifting their dividend and they have a dividend payout ratio of 75%. So that does show that they are highly cash-generative and that certainly underpins that payout. They've got a $250 million buyback that's going on at the moment. They've done 70 million so far. So they still need to do a lot more and that will continue to support the share price. They do do many different segments with defence and government and those kinds of things, but also infrastructure. One of the things that they do have is in the water side of their business, which is only around about 2% of the revenue at the moment. But we do know that the New South Wales Government and the Victorian Government have to spend up to $30 billion in each respective states to lift up, this is non-discretion, this is what they need to do. $30 billion needs to go into picking up our water supply, making sure the pipes, everything else is running going forward. So I actually got a client who's a water guy, he does a lot of water infrastructure and he works with Ventia quite closely and he's confirmed with me that that kind of spend absolutely needs to happen over the next five years. So again, $30 billion just in New South Wales alone, if Ventia can get some of that contract work, which I think that they will, that department of that water, which is quite a low part of their overall profitability, should lift up. So you've got good management, you've got cash generation, good dividend payouts and they'll be lifting their dividend in 2028. It looks a little bit top of here, but I think overall, if those contracts continue to go, they just picked up a $1.5 billion contract further in defence to make uniforms. So there's lots of things that these guys do and management really did impress me as well. It's a buy from me. How are you? Are you convinced? No, because you're only 120 to 25 companies in your portfolio. And if you've got some principles, you've got to stick with them. But I'm impressed with what Adam said. And clearly Adam, you know the company pretty well. So you know, yeah, well, that's what I say. This is what makes a market. People watching, listing, have to make up their own minds. And I wouldn't be at all surprised that a lot of them will get into this best. I wanted Adam said because it was very confusing. Yeah, I agree, Adam. Okay, let's get to, although I am completely, I am just sitting on the sidelines amongst all of this. All right, let's get to the next on the list and that is judo. So this one is for a viewer, Adam might start with you. Adam does Sean Partners, judo bank. Yeah, yeah. Well, look, you know, as all most of the banks have done, they've have to live their provisions. And judo is no exception as far as they've had to continue to lift their provisions, which just crossed the sector that that has been part of it. Their lending growth has certainly has grown around about $13.8 billion that they got sort of out there. So I think I think it looks okay. And a lot of brokers have sort of viewing this share price weakness as an opportunity to get into the stock. Overall, one broker, a very senior broker many, many years ago said stick to the quality sun, stick to the quality. And so hence, it would be a no from me. I think the big floor are the ones that you want to be at. And I think the big four are coming down quite nicely. They'll continue to put pressure on our market on the downside. But I would stay with the with the CBA or a Westpac A&Z or a NAB. They're all more so McQuarry as a bank that you would have in your portfolio. And as As Howard said, you've only got sort of 20, 25, 15 to 20 stocks in your portfolio. You've got to make sure you stay with the quality. And I don't think Judo has that ability yet. And it would be a no from me or a cell for one of the big four if not McQuarry. Yeah. Okay. Got it. Yeah. There's a piece in the fin today about McQuarry not only taking on the big banks when it comes to mortgages, but also deposits as well now. So let's get a view on Judo from you, Howard. Yeah, I mean, look, I think it's a well run business, but as Adam said, banks are not exciting investments to start with. If you look through the history, I've been in Australia just about 35 or so years. And at no time in that 35 years have banks in the long term been particularly good investments. Most of them, their share prices are no higher than they were 20 years ago. Commonwealth's the exception. And they've paid out a nice dividend. So you get slightly better returns than if you put your money in the bank in a term deposit, but not a lot. And they far better things you can invest in on the stock market if you put some effort into it. So while I think Judo, Evan, New Young Bank probably will continue to win a little bit of market share from some of the big players because they're more nimble, hard to see how you can get excited about any banks. So a no from me. Thank you both. Really appreciate your insights. Let's get to the next on the list and that is Sigma Healthcare. This one's for Isabella. Sigma Healthcare or chemist warehouse. Take your pick. What do you think, Howard? Well I think the interesting thing with this company is when you look at any business, who knows the business best? Not Adam or me and you sitting in these wrongs. We may know it's a lot better than most people, but the people who know the business best of the ones running it. And if the people running the business are all running away from owning shares in the business by selling out as many of their shares as they can, having done the transaction with Sigma from chemist warehouse, what they're really saying is we think the public's money is worth more than our shares. Now every time you buy a share, you've got two sides to it. The seller thinks they're getting a good deal. The money's worth more than the shares. The buyer thinks they're getting a good deal. The shares are worth more than the money. But if there's information asymmetry and the people who are selling the shares are the insiders who know the business really well, then you'd be a mug to think that you know the business better than them and that they're being fools in selling you the shares at a bargain price. So when I look at Sigma, there's nothing much about its metrics that look particularly good although the last year obviously looks better since it bought chemist warehouse, but combined with the fact that insiders are selling so much, I'd say forget about it, come back in another five years and we'll have a look at it then. Okay, that's an avoid or sell for Howard. Is that right? We've got insiders selling in Sigma because they've made a lot of pharmacy owners. Well, the lot of sea owners. I mean, they may not be insiders under the ASIC definition of what an insider is, but they know the business from inside. Yep, no, I take your point now. So does that sort of help form your view at all Adam? Yeah, I think you've got to be wary of directors and you've got to be wary of how the stock is trading and how it's absolutely right. The directors will or insiders know a lot more and can see more visibility versus the six monthly review or the 12 month sort of and their outlook. They can see sort of years and years and a year. I've actually enjoyed this one obviously not since the February, March, April, so I did dip down, but on a longer chart, I've been trading this one from sort of $2.80 to $3.20 quite comfortably over the sort of when chemist warehouse came into that fold. I mean, chemist warehouse does life for like sales of around 14%. Right? You can see that chart there, $285 to $3. It's been a really nice little trading stock over that time. And so it has been quite good to sort of move in and out, not for longer term, but just that move in and out. But life for like sales is sort of 14%. Look, it does imply that, you know, there is a slight slowdown. It's sort of forecasting 13 and a half percent next year. So they are forecasting a little bit of slowdown. And certainly the risk is softness and consumer spending, those kinds of things and expected to stall roll out because remember, they are going to the UK, they are going to New Zealand. And that's a bit of extra capex spend to grow because chemist warehouse, obviously the number one chemist here in Australia, we've got a mature market. They're trying to find more growth overseas. So those kinds of things do take a fair bit of capex. For me, it's a hold. I think it's a good little bit. It's a good business that pays a good dividend. And I think it's a good trading stock that you can sort of move around in. I've got no problems with chemist warehouse or bid. I get sort of over century overload when I walk into one of those things because they cram so much stuff into one little area and all these colored tags. I can't really understand what's going on. But it obviously works. And it's certainly something that I think, you know, being one of the largest chemist businesses in Australia, sticking with equality, it's a hold from me. Okay, got it. You just made, you just aged yourself there Adam. I'm sorry. It's part of the fire. I don't think that's the end. That's the end. That Jamie Hi-Fi. All right. I always wonder, who do they get to make them? signs at JBI FI that they're so the same across all of the business. Okay, Dexas convenience retail retail retail is coming up next. DXC, this one is for Hamish. What do you make of that Adam? If you look at the chart, there's probably not a lot to get excited on this one and certainly it sort of looks like more like a bond like kind of business versus a sort of sort of enhanced kind of equity with yield attached to it as well. Overall, it doesn't really excite me. Look, consensus is is that they are their guidance for 2026 is looking a little bit better. But look, there's good growth in the business, but I just can't see really too much on this one and looking at that chart. It's more in the convenience space, which I think it was good for them to spin this out or Dexas to have this, but there's plenty of other better REITs out there and it would be an avoid from me. Okay, not a lot of love coming through for DXC, Howard. Yeah, I'd go along with Adam, I mean, it's hard to get enthusiast about it. It's got low return on equity as most REITs have, but it's lower than many of the others. Earnings per share has grown a little bit in the last year or two, but it was much higher a few years back. And Dex, okay, the one attractive thing about it, this is me who wouldn't invest in it saying, is it's on a very low PE of less than 10. So at least your dividend yield based on that PE is probably going to be quite attractive. You're not overpaying for it, but I don't see much opportunity for significant growth. You know, generally our team invest members, there's only a small number of them who really, really understand investing in REITs well. They say, dependant on interest rates and evaluations and devaluations, they usually they land up in the two-hard basket. And for me personally, I'd say two-hard, I can find other better things elsewhere in the stock exchange. Well, I wonder if that would be our next company on the list. Doc number 10 is data 3, DTL, this one is for Zachary. So data 3, IT services provider, that's in a nutshell. How are this one sold off quite significantly in the wake of its half-year report back in February? Yes. So was that the time to buy? Absolutely. Absolutely. Got all the way down to about $6.50. And I bought some in the, that I didn't get it exactly at the bottom, but somewhere around about 6.70 or 6.60 or something, I bought some more then and then a little bit more than that maybe 6.80. It's now up at 8.75. I've owned this continuously for about probably 17 years, done wonderfully well out of it. It pays very big dividends for its type of business. You know, usually these tech companies don't. And as a result of it paying very big dividends, mainly because it's such a capital-like business that doesn't need to reinvest. The share price doesn't rise that much. So people say, oh, it would have kind of been that good an investment. Look, the share price has only gone up, you know, seven times over 17 years. Yes, but if you look at the dividends and add that in as well, you've done extraordinarily well over those 15, 16, 17 years. So it's been a genuine wealth winner, never raises any capital from shareholders. As I say, pays out these big dividends, got no debt other than the way Lees has accounted nowadays, high return on equity. And it's definitely going to be a long-term beneficiary of AI because there's so many companies out there that have got to replace their hardware or alternatively need advice on what to do. So yeah, one of our great wealth winners, but it's not cheap at the moment. It's in roughly the middle of its P ratios. In fact, if I look at that chart that we have in our software, it's almost exactly in the middle. It's a teeny fraction below the middle. So if you could be buying it somewhere around about something that starts with a $7, $7 something, I'd say, yeah, that's the time to buy. When it gets to about $9 or close, that's very expensive. So at 875, watch it, wait for it to come down. It has quite a volatile share price, never understood why. But every time it drops, that's the time to be buying it. With a long term. With a long perspective. Long term perspective. Okay, let's get to Adam's view on data three. Is this really tech company or a tech provider? Yeah, services software and obviously, and I don't think I've ever heard how it would get so excited about it. So I'm more intrigued about it as well. So obviously, you're talking up your own portfolio there, how it's so, but yeah, overall, the first half result was a little bit weaker. And that's obviously why you've seen the pullback in the share price, but now starting to move higher again. Obviously, the tough macro side of it, I think, is a little bit tougher for me. They do have a very large agreement with Cisco. And I've got a good friend who works with Cisco in the data and in the service side of things. And I know now that Cisco, basically, if they quoted a price to you three months ago to get some hardware and he sort of works in where, you know, when organizations buy like 100,000, not 100,000, like 500 computers or a thousand computers, that kind of thing. That Cisco is now not honoring any of those quotes. You basically have to wait until it's pretty much ready to be delivered for Cisco to then to put a price on it. And I think that's just the way that the market's working or the showing you how quickly one currency's moving to the market's moving as well. And Cisco doesn't want to be held to a product or a price that they put three months ago, which makes Dio3's business a lot more difficult because you've got the hardware suppliers in the background, not being able to give quotes and hence that makes the business look a little bit tougher as well. They've got about 125 million in cash in the bank. So look, our fantastic for a tech business to have that kind of capital sitting behind that. So that's a real positive. Look, it's a hold from me. I think overall it does look good and I'm going to need to do some more work on it since how I got excited about it. So I'm going to have to do some more work on it. But yeah, on any weakness, I think, yeah, you definitely stick this sticker by on this one. Yeah, right. Well, how would we do work on Ventia? You do work on DASA 3 and next time you meet, you can, yeah, we can figure out what we do. We just got it. All right. Thanks guys. Let me just review what we've learned. Speaking of Ventia, it's a buy for Adam. He reckons it can go higher, really impressed with the depths of management. It's a hold for Howard. He likes the story, but he's going to wait just to see what happens with that debt pile. Wait, about six years before he really seriously would consider it judo. It's a sell. Banks are just not that exciting to start with. Says Howard. It's a sell for Adam as well. It's not as high quality. You can get exposure through bigger names like McCory, for example, Sigma, a whole, a slight slowdown on the cards. It's a trading stock says Adam. And also, it's an avoid for Howard because he does not like the fact that the insiders are selling. What do they know? Looking forward, DXC, it's an avoid for both of my guests or sell if you're in it. And DASA 3, you just heard what they said, a hold for both of my guests, but a buy on weakness. That's not today, though, rules of the game. It's today by hold or sell. Look, if you're watching or listening, I do hope that that has helped you on your investment journey, or at least entertained you for a short time. A huge thanks to my guest coming from Sean Partners. Adam Dawes always a pleasure. Thank you. And also Howard Coleman from Team Invest, who is in fact sitting right beside me. So I'll turn and look you in the eye. Good fun, Sean. Yeah, it was good. All right, guys. Thank you again. Thank you for watching. Stay with us. We've got more news and views coming your way. The call is brought to you by Centuria, an ASX-listed property fund manager with $21 billion in assets under management. [Music]