the call: Wednesday 1 July

[Music] G'day and welcome to the call 10 Sogs, picked by you two experts one hour it is July the first this Wednesday beginning of a new financial year and joining us on today's show Jonathan Takadena from MPC markets and Henry Jennings from markets today gentlemen happy new year to you both for all your financial nerds out there and Jonathan it can't help but look at particularly the past quarter what's happened on global markets still a gains records in fact which is saying in terms of gains but a very different story here Yeah absolutely so it's the tale of two cities basically so all the money's been pouring into the US anything A.I.A.I.J.J has just gone through the roof and obviously because it's such a large part of their stock market I think believe it's like 18 or 90% of their market cap is chip related or sort of A.I.J.J.S and then tech Yeah they've had their best quarter I believe in six years and I think the bounce out of the lows has been the Mark was running the stats this morning I think but I believe it's been the biggest quarter not following an actual say black swan event so yeah the bounce has been huge and if you look at underneath the surface it's all been supported by fund flows so money is pouring in into the US markets it is pouring here in the in the U Australia as well look if you look at the ETF monthly flows it is flowing in here but I have a funny feeling that a lot of it's going into overseas ETFs as well so all of the action is in the States and yeah here in Australia unfortunately not as exciting Yeah to that point in fact I was just looking at an article in regards to Comsec seeing some record trades dead driven particularly by those young investors women and guess what they are buying those ETFs that's what they're investing in Henry how are you seeing it at the moment and can Australia I mean can the local market catch up I mean it is all about A.I. and that tech trade which we don't have here essentially Absolutely not At the end of the day it is the problematic issue with Australia of course is we don't have any real exposure to A.I. in that respect we do have the software stocks and they have been struggling I've often said and we've talked about this before Andrew is that you buy the US for tech and you buy Australia for resources The past performance of the last financial year happy new year to all those people out there you know resources have done very very well I think we're up 46% in the ASX 300 metals and miners index So you know that the top three stocks the likes of Pilbra mineral resources and Linus so you know it is a tale of two cities the banks have not performed very well at all They have stumbled around and of course our tech sector has also stumbled around and our health care sector with the likes of CSL and my old favorite resmed really under performing so you know when you look at the composition of the market It's hard to see us playing any significant catch up in terms of the US as I say you know you got to go for horses for courses and if you want to get that resource exposure Then Australia is the way to go if you were to look at the US resource market instead of the NASDAQ I'm sure that has been pretty pretty unspectacular as well so you know you pick your market you pick your sector and you pick the way you want to get exposure to that and that may be that you don't just go passive ASX 200 ETF because frankly that I'm going to cut it anymore people that is not the way of the future You know there's lots of these specialist ETF providers out there that are coming up with with wonderful ways and with wonderful sectors that is probably a far better way to play it if you're playing in the ETF market but Australia from an ASX 200 point of view stuck in the slow lane this year but from a metals and mining point of view it has not the lights out Well that's not a bad segue then into our stock of the day Henry because it is a key resources stock on the local index it is south 32 I can use today agreeing to sell its aluminium value chain assets to our COA in a deal with around 5.6 billion US dollars that includes 3.1 billion in cash up front 1 billion in our co shares Now COA will assume approximately 750 million dollars in net debt and lease liabilities also take on about 1.2 billion dollars in rehabilitation liabilities the sale comes as the new chief executive there at south 32 will refocus a strategy so away from aluminium obviously and particularly the focus on copper It's also a matter of final investment decision approval I should say for the fourth grind line expansion of its a Sierra go to copper mine in Chile saying the expansion will significantly increase copper reduction and lower operating costs So it is a stock of the day what do I expect thing Henry? I find it remarkably ironic in terms of this deal I have to say you know south 32 used to be part of BHP BHP jettison did because it was space metals and aluminium etc and set it free Debt free as well here we have a pretty good deal for south 32 certainly the market likes it it's up nearly 9% but I find it quite ironic that south 32 is pivoting towards more exposure to copper which you know BHP is also pivoting towards more exposure to copper So you know it's kind of interesting that the child is following it was becoming the parent something said I mean we will do that don't we I'm getting more and more like my father every day which is kind of worrying But yes it's a good deal the the fourth grinding line for Sierra go to also out this morning as well again a good deal and they are getting a relatively good price I would say for for those assets certainly the market says so 4.1 billion US There's it's obviously not all in cash but you know it's it's focusing towards that copper market and base metals and you know when you look at the last presentation aluminium was quite a big part of their business it's a you know it's a 19 billion dollar market cap business But certainly the growth is all in other assets base metal sink copper very much the way of the future for south 32 so I do find that kind of ironic that BHP got rid of them and now they're doing what BHP is doing so I guess I was going to say life it really tights up. But it is it is an interesting move and I would say that you know these kind of prices it's probably got potential to push back to to $4.50. Commodity stocks and resources have been under the pump a little bit as we've seen the Federal Reserve start to talk about hikes as opposed to cuts and that has really crimped the the resource stocks at the moment. So I think off the initial bounce we'll probably get a little bit more of a kick through as the analyst come out and support it but probably $4.50 would be an area to start leaning into trimming any positions that you have in South 32. So that is what holds a hold? Yeah okay Jonathan. Yeah similar thoughts so obviously we we're going to talk about our co-a little bit later in the show because that's part of the list and so usually when we have these big M&A deals or sell us you know there's usually a clear winner in this case but when I looked at the deal you know it looked actually like a fairly priced deal it's not like South 32 where you know literally these things go for a bargain based on prices or a fire sell in that regard but it doesn't look like our co-awe were paying up too much as well. Obviously they're offering script as well which is always a little bit easy to get rid of then then cash in that case but overall South 32 the focus is on copper and if you look at all of the metals it is the one chart which looks still super constructive all of the precious metals have been hit hard and obviously that's with the strength the oh sorry the speculation that there's going to be rising rates here in the US and that's why the US dollar strength and then gold has come off but you know gold's still holding in there around that 4,000 odd level so yeah I'm still confident of that longer term but yeah it's all about copper and I think South 32 as Henry said gets to about 450 from here I'm not as overly bullish where I'm just like you know buy metals and you know just hold on it's going to keep running like it did late last year into January this year so I do agree with the with the range trade right here at the bottom end of the range or the mid mid to lower end of the range and flick it out and so but I do think that metals do have a larger run into the future so yeah if you're looking longer term you know with the whole South 32 in the portfolio is a good operator and the fact that they're streamlining their operations tell me that management are focused on probably the highest commodity going forward. - That is copper. All right, and that is our stock of the day, South 32. Sorry, let's take a look at the first five stocks we're going to discuss our color. We're gonna get to that off the back of that deal, Batcore Smart Group IoG and IoG. So off the back of that deal with South 32, let's go to our color to begin with. So Jonathan and Chef Rice has come off as a result. Who gets the best part of the deal here? I mean, obviously we know what our color does. - Yes. - Obviously in that business of the back. - Yeah, so what alcohol done is obviously just, they're focused on the aluminum and aluminum and borx IoG. And they're just expanding that. I think there'll be some sort of, what they call, Cuts, sort of costs reductions because that's their core business, which South 32 were dispersing of. And I think what you'll find is that alcohol will be a buy at longer term, but at the moment, we're just having a bit of a knee-jerk reaction. Usually when someone acquires someone else, the market tends to punish that. So the critics always say that they're overpaying for it. But I think what you'll see is that over the next quarter or the next earnings call, you'll see some of the synergies and some of those cost reductions come in. So I do think alcohol is a buy at longer term. Aluminum, I think it's going forward. It is a lighter metal and one of the more important metals in manufacturing going forward. If we do want to get it to space, we'll be using lighter alloys and the like. And because all the operations are based in the US, as well, you've got the fundamentals that Trump's going to do as much as you can to keep that production on within these borders and keep it clearly sound there. So I think alcohol will be a buy eventually, but I will wait for it turn around in the chart before saying so. So just today a whole, but yeah, looking for a bargain soon. Yeah, okay, Henry. I think it's fair to say that Alcoa had a good wall, but unfortunately not such a good piece coming out of the Middle East. And we've seen the only minion price drop quite considerably. And as a result, we've seen the price of Alcoa also drop considerably. You know, picked it, I think it was close to 120 coming up to the June month. And now here we are, it's sent me three bucks. So, you know, I think it's fair to say that some things haven't gone particularly well now that we've got peace in the Middle East. And some of that pressure of aluminum is coming off to the upside. So it's not a bad deal for Alcoa. Obviously cost cutting and synergies are going to be the key to it. But it is a very cyclical business. It is very dependent on one metal. And you know, where you've got other miners around the world who are diversifying out of the one metal. We've seen it with BHP to some extent. You know, ION Orb is a big part of it. And Copper has become an increasingly big part of it. And now of course they're looking at Potash with Janssen. So Alcoa does give you absolute exposure to the aluminum and bookside markets, which you may or may not want. But at the moment, I think it's probably stuck in a bit of a downtrend. So this deal probably continues that. And I wouldn't be looking at that one just yet for any kind of bounce unless there's some disruption to supplies coming out of the Middle East again. So I'd probably be in a void at this level. If you had it already and you've been holding it all the way down, well, unlucky. But yeah, I think there's probably a little bit more downside to come as the dust settles from this deal. And the synergies get work through. So yeah, not for me at the moment. All right, a hold and an avoid for Alcoa. Let's now turn to that core. Second stock with TANL. It's provides those aftermarket automotive parts, accessories, brands, including auto pro, auto barn, person, auto parts. If what 20 yearnings guidance was cut, let's just three months after it's recent capital raising. Also facing some significant competitive risk there, that's following bunnies getting into the automotive category as well. Henry, some negatives obviously. You're seeing any positives. Some negatives is a bit of an understatement, Android. All right. This has turned from what was once. I wouldn't say market darling, but it was four bucks this time at last year. And here we are at 44 cents. So the management has done an extraordinary job in killing of this company. And it remains for somebody private equity, I guess, is the best hope that they can take it over, take it private, and do the necessary surgery behind closed doors. You know, we've got a cansoffling consumer sentiment, which is obviously hurting their retail side of things. And sales momentum, although that has increased margins, have been under pressure. And of course, it is a very much a turnaround story. I think, you know, the best hope for for Bapcore shareholders is that somebody comes across the horizon, riding and the cavalry come and save them with some sort of cheeky private equity, non-binding indicative offer. But, you know, it's hard to love them. $300 million market cap. I've no doubt there's been some tax loss selling that's taken place. And maybe we'll see a little bit of a pick up towards the 50 cents. But it's going to be a long road back, I guess, for Bapcore, to some extent. And, you know, higher interest rates don't help, water, barn, etc. And analysts have turned pretty much bearish on it, which may be a sign that it has reached the bottom. And I think, as I say, the best case scenario is the private equity comes along. And finishes or at least continues the transformation behind closed doors without the market watching it. So, yes, it's hard to love. And, you know, it's been, frankly, an absolute dog. Yeah, so if you had ridden it down to this level, do you stick with it in the view of maybe someone's going to take it over or not? Do you just move on? Ah, I think you've, you know, you've got to be, you've probably got to be sticking with it. If you've seen it collapse from four bucks to 44 cents, you're probably going to stick with it. But, you know, if you were looking for new opportunities and putting fresh money to work, I suspect there are probably better opportunities elsewhere, even in the poor old ASX 200. Yeah. Okay. Jonathan is one of those questions, isn't it, when you have ridden a stock, Lava and Lava, maybe Hopi, which is not a strategy, clearly, but we all do it. What would you do with that call? Well, I wish I had a time machine because I would have sold it yesterday. Instead of today. So you can at least claim the tax loss. I mean, like, I've got, yeah, everyone's got the bottom drawer. I mean, like, I've had stocks where, you know, just before you go into the tax loss selling, they go into suspension and you're like, "Well, I can't even claim the tax loss this year." So as I said, if I had the time machine, I'd be selling it yesterday because on the way down, you kind of had, you know, you could say, "Oh, look, the whole consumer discretionary area has been hit." You're like, "Okay, well, back cause part of that." But what I've seen is that there's actually been some green shoots there. Like, a lot of the consumer discretionary stocks or the good ones have bottomed out and are starting to look positive here. So as an example, JB Hi-Fi, starting to look, you know, I mean, like, doesn't look totally fantastic, but compared to BabCore, it's got green shoots there. So, you know, as an example, I would have sold BabCore to get into something with a better, better shot. Have a look at Westfarmers. Look at the chart difference there because that's the main problem there. Is that like, you know, if you really, if you ridden it down, you've got stuck capital in there and it's like, "Okay, so you're hoping management turns it around." But then if it does turn around, look, will the rest of the market follow the long? And I think there's a better chance for the market to follow along with JB Hi-Fi, which has been the previous market darling, making money versus BabCore from here. So, yeah, I'm sure that had much to good use for anyone who's been holding BabCore here. So if you've held it for this long, it's a hold again because, you know, you might as well see here. But, you know, if I was on the call yesterday, I would have said, "Yeah, sell it before 4 o'clock." Well, unfortunately, we don't have a way back machine. So that's not going to work for us, is it? All right. I'm going to call out a painful double hole then. BabCore. Hi, Nadine here. Thanks for listening to the call. Did you know becoming an Osbus contributor gets your stock picks straight to the front of the queue and to the expert of your choice? It's our very small way of saying thanks for your support. The link to become a contributor is in the show notes or you can go to osbus.co/contributors. That's osbus.co/contributors. And while I've got you, we'd love it if you could leave us a review. And thanks for listening. Let's move to Smart Group. Re-s asking about this one provides us no vated leasing, fleet management, salary, packaging, payroll services, and the like. In fact, no vated leasing orders. So I've read some 22% year on year, settlements up 7% driven by particularly rising demand for EVs. We saw that clearly over the course of the conflict in the Middle East. Jonathan, what do you think? So Henry talked about war and peace. This is actually a beneficiary of war. So when the fuel prices started to spike up to, I think, it was like 2.20 for at the most that I was paying for just regular 91. You can just see Smart Group just took off. And that was just all inquiries on EV leasing. So basically, you've got this turned it to be an exposure to EV. So you may not like Elon, but if you're thinking about getting some exposure to EV sort of leasing market, Smart Group just took off. And you can just see, went from the nice to the 13. So what's at about 30%, 40% move, not bad in that time? I think it's like, if you zoom out, 13 is a bit of a resistance level here. So what you need for it to do to keep going from here is obviously keep that narrative going. And then a fresh wave of buying passed that $13 level. So I'm a little bit cautious that that could happen because we believe in the not. Trump's talking about peace in Middle East now. And look at the actual petrol prices. Because the fuel exercise has been taking off, we're actually paying less. We're paying about $1.50 versus I think it was about $1.65 roughly when the prices started moving. So I think Smart Group could pull back here. So I do like the fact that it's made some money from that narrative. But I think it's hitting resistance level here. So I wouldn't be putting fresh money here at these levels. But if it does break out past that resistance, I look for a trade and a move higher. But at these levels, just a whole old. OK. All right. Seems to be the strategy of the day. A whole Henry. That was almost a saddle there. That was almost a saddle. I think it was almost from-- Yes. It was, wasn't it? Yeah. I kind of took that as a saddle. But anyway, it has run very hard. And as I said with the other one, it has had a good wall. That's something standard. And we have seen petrol prices spike. And people get pretty much concerned about that. Interestingly, as Jonathan says, it's now below $1.50. And seems cheaper chips. I have to say petrol at the moment. And we have seen that fuel excise levy cut. And that being pushed down another month. And the oil price kind of now fiddling around $70. But I think this one certainly has played into the AI story as well in terms of digital transformation, efficiency, customer experience, getting the platform right. And I think that demand for EVs is just going to increase and continue to increase. Excuse me. Let's face it, the Chinese are now making EVs at astonishingly low prices with astonishingly good technology. And that's making it a very convincing argument for many people to buy into. I'm in rush. Well, he sent me. I'm like Charlton Heston with the National Rifle Association from my cold dead hands in terms of my petrol car. I'll be hanging on forever in a day. But this one's had an almighty run, a really good wall. It was $7.50 back in the middle of March coming into April. Now it's $13. It's pretty much-- it's nearly doubled. I would be taking some profits here. I have to say, I'm always a bit of a man that likes to trim things when they've had these sorts of runs. It could continue to run. But it does give you a little bit of optionality in terms of your position waiting. And it's always good to take some money off the table along the way I find. It could easily pull back to $12, $11, $12 without too much of a problem chart wise. So I would be taking some profits here at Thurningbox. It still looks pretty strong, to be honest. But the bear in me just sees a good case for I'm taking some money off the table in this one. OK. That is a-- a shall call an unconvincing hold from Charlton. But it is a sell-- a taking profit as far as Henry Schinzer and for Smart Group. Well, it's now turn to the Intura IAG. You try not to ask him about this. Does have those brands here and across Asia as well. NRMA, CGU among them. And it's home and motor insurance growth remains strong around 6%. Although interestingly, McQuarry is down and graded at it to want to perform from neutral bulimit. It could be exposed for another $740 odd million given outstanding green seal claims. Goodness is that still going? Yes, it is. Henry, how do you see IAG? Well, it has been a beneficiary again, I guess, of a higher interest rate environment. Insurance companies basically take your money stick it on deposit and wait till you make a claim. And then they try their best to wriggle out of paying that claim, which is the way of things. It's gone pretty well. It has benefited us, say, from those higher interest rates. And we all know from our own experience, that insurance costs don't seem to ever go down. And it's one of those things that just becomes a bane in our lives, whether it's a life insurance car, house, contents, travel, you name it. When I look at all the insurance that we have in the Jennings household, it's bloody expensive, Andrew, whether it's health, the whole gamut of insurance. So I think here it's a hold. Obviously there is the green steel litigation still overhanging it to some extent, like the sort of damacles. But I think insurance companies generally, if you're an actually for an insurance company at the moment, I would say that AI is coming for your job, my friend. And I think AI is going to increase the efficiency of insurance companies in terms of determining risk. And I think that's going to be a big, big cost benefit for insurance companies. They will not pass that cost benefit, of course, onto their customers. But they will keep it for themselves and their shareholders. But they recently had an investor day. They got some pretty ambitious targets for Grocery and premiums for 20, 30, 25 billion. And certainly high single digit earnings per share growth. So that's all well and good. And that's very serious rates aren't going down anytime soon. So that's positive. For me, this one is a hold. But just keeping on that green steel litigation update when we did see a bit of an update back at the end of May. So that's potentially hanging over it. But I think this one's a hold at the moment. Yeah. Well, you don't have to tell me about those insurance premiums, particularly when you're trying to ensure your car, because your kids driving them. My goodness. Yeah. I was-- Pesky kids. Yeah. Pesky kids. Who have a mate? I catch an over and instead. Jonathan. Yeah. IAG. So overall, the one I've seen is that insurance companies have had a good probably about three or four months. So QBEs broken out to new highs. Steadfast is doing well. And having a chat to my mate who are insurance brokers, they're saying that it's kind of a weird phenomenon. Like insurance is usually sick. All there's usually times where the insurance companies are doing quite well. They just increase in their premiums and people just paying them. But at the moment, everything's competitive. The guys that are looking for insurance, they're finding that most of the other insurance companies are quite competitive at the moment and trying to match and gather business at the moment. But as Henry said, because of the bond yields spiking, insurance companies are doing well, having that collateral on their books. And I think what you'll see with IAG is that it'll just drift higher, along with most of the insurance companies till we see the next round of weather events or next round of large claims. So for me, I think it's a buy. I think it actually drips up towards probably that nine, 20 level from here. So if you think that's a decent enough risk to reward ratio for a very boring insurance company, I think there's a trade there. So I think in general, insurance companies are doing well. Every insurance company is a little bit more specific and a little bit more detailed. But I think IAG will just flow along with that whole sector and their head towards the highs from here. So that for me is a buy. - That's our first buy of the day for IAG, whereas Henry is holding it. Let's step back into the resources sector now. We'll look at IG-O, IQPRIS about this battery materials, nickel lithium and copper. IAG-O is a ship-rice fallen around 20% per month, reflecting a sharp drop in Chinese lithium carbonate futures that soft the back of speculation about CATL restarting its lithium mine there. - Okay, so interesting one. So lithium, I think, is either in its fifth or sixth boom of a cycle that I've seen throughout the years. I remember when Noah even knew about lithium, and then suddenly we found massive deposits here in Australia. Well, that's kind of one of the things about living in the lucky countries that whenever material is needed next year. we tend to find it in our backyard and lithium's one. So that being said, I remember having Pilbra, Lian Town in the call recently just saying that you got to trail those stops up and once it breaks your certain levels of support or moving average, whatever you use, you need to get out because there is another bus cycle coming and every reason is slightly different but it feels like this one is going to be more about battery technology. So you can just see the likes of cattle which is with solid state batteries, sodium batteries and that could be the next reason that it falls down. I think overall lithium is still the one of the main elements that we need in battery tech going forward. So yeah, there will be another boom cycle but it just feels like we're in a bit of a downtrend at the moment. So it's an avoid for me for IGO and a lot of the other lithium plays and as I said, if you had moved your stops up as the market kept rising, you'd probably be out now and just wait for the next sort of support level or next narrative change to buy back in. Okay, everybody, what do you think? Yeah, it's an interesting one. Lithium has quietly come off kind of big time in some respects and we did see the summer Davos last week, C-A-T-L talking about sodium ion batteries and the great strides they've made in those. It remains to be seen whether that is commercially uptaken in terms of electric vehicles because EVs do require, I guess, more concentrated power in the lithium ion battery still wins in that respect. It is kind of, you know, seven bucks does look an interesting level. I suspect it's going to test that in the coming days. Here we are at $7.32 and seven bucks would be kind of a triple bottom and that's where it did peak back at the end of December 25. So it is an interesting area. They've clearly had some weak production and earnings guidance, disappointing. That came out of Greenbushes and the copper opportunities there are potentially a near-term catalyst for them but yeah, it's hard to like at the moment. The Greenbushes turn around is elusive to say the least. I would say, you know, if I held it, I would continue to hold it. $7 is a critical level. If it can hold that, it could bounce back up towards eight bucks but I think it's got the potential to test that level. So at the moment, I think for me, it's just a hold if you've got it but again, you know, the lithium sector at the moment has been under some serious pressure, the likes of Liantern, Pylbur, etc. Which have had some pretty astonishing 25/26s, may not have quite such astonishing 26/27s. So I think there is pressure on the market and we could test that seven buck level. So it's kind of a weak hold at an interesting level and we'll see how it plays out. All right. And a hold for IGO, Henry, your grip must be getting weaker because you're holding everything. Let's, so what they're, they discussed over the first half there, South 32, it's talking today. It is a double hold and our co-exist off the back off. South 32, selling its aluminium assets to our co-er. It is a hold from Jonathan. Mind you, Henry, he's avoiding that at the moment. Hedding said it had a good war but now that's not the case. Batcore. It has been a tale of woe and both saying, look, if you've ever ridden it this far, Lauer hold it. So it's a painful hold for both smart group. It is a hold from Jonathan, although expecting a pullback there, Henry acknowledging it has run very hard. He would take profit and sell it. IG, it is a hold from Henry. Jonathan, though, saying, well, usually these insurers are cyclicals but is very competitive environment. He would buy it and IGO and avoid and hold. 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The US economy is not growing particularly fast. Put similar stocks head to head and make a call on which one rings. In order to shift from Nvidia into AMD, it's incredibly difficult task. How long can they sustain such a big growth rate and such a big margin prize now that others have worked enough? Plus, ask team invest experts to deep dive into a stalk or topic of your choice just to email us your questions. Live from 1 p.m. every Wednesday. Well, Fian Wise is your guide to value investing powered by team invest. All right, let's preview the second half. Then we're going to take a look at TX pharmaceuticals. EkoIQ, Atria, Seek and TBG Telecom. So we're starting in the biotech space there. Retilics pharmaceuticals and Lucy asked about this, Radio Pharmaceutical Company, developing commercialized targeted cancer imaging and therapy products. In fact, expectations the FDA in the state is going to approve its picked clearer product. It's diagnostic imaging agent for recurrent and progressive glomerate. It's expected ahead of us or by September, I think. Jonathan, let's start with you. Yeah, okay. So September limit is the key date for that approval and the market's kind of waiting for that date. But they're not waiting too long because technically, TX looks absolutely amazing on the chart. So MPC has been buying TX heavily on the way down and we're adding on the way up now. And you can just see it's passed the April and May highs. I think 1607 was the key level. It broke through that two days ago and now here we are at 1720, which is kind of like the second half of last year's high. So we're now in, well, I wouldn't call it blue sky. But back when it was on its run and there was trading, I think, 40 dollars at the time. Basically, the market was pricing in the sort of their imaging business and giving zero credit to the whole new sector here in radiation. So I think that we're at the start of what I think could be a decent run for biotech in general. Have a look at the chart formations in IBB and QOR if you're trading here in Australia. Have a look at those ETFs. They were just trading sideways for a good six, nine months and now they've just broken out Eli Lilly's the main sort of proponent there, like obviously the GLP-1 drugs have taken off and the biotech in America have taken off. I think what that could mean is that we're going to have a bit of a research and see some of the Medtech and biotech here in Australia. So you've already seen CSL bounce off the lows, Cochlear bounce of the lows resmen as well. So I think there's going to be recovery in those to start off this financial year. So TLCS is probably one of my better picks in that space. It's been much higher. They've got a new approval in Europe. So you know, pretty much Blue Sky and a land grab over there and then you've got the FDA coming up in September. So I think it could be well into the 20s when we get to that September. So that is a buy for me and I just think overall biotechs pick the right ones and I think this is the next hot topic. All right, that is a very positive outlook then both on technically and also fundamentally. Henry, would you agree? Yeah, I would. I have to agree with Jonathan. This one, it got sold off I guess unjustifiably so in hindsight. It got down to sort of nine bucks and here we are at 17 bucks and it is looking pretty strong. I have to say all the analysts have a positive view on it in terms of price targets and you know, it is grinding higher. The chart looks good. You know, this JP Morgan now with a target of $23.60 which gives it significant upside from $17.20. So yeah, I think this one for me is a remainder by it's one of the quality ends of the of the sector. The other one that I've championed for a long time is Neuron Pharmaceutical which had that big result in Europe. Well, the market thinks it's a big result, but it is a stepping stone to European approvals and that one went nuts. I have been trimming the holding that I had for a small cap portfolio and that one having seen it down and now back up above 18 bucks. So that's good news. I think Telix, yeah, for me is still a buy. It's a real company making real money and it's got a lot of things in the pipeline as well, most of which I can't pronounce, but there are lots of lots of biotech terminology and chemistry are playing there. So I think this one, you know, we could easily see this up to 20 bucks without too much trouble is the new year unfolds. Yeah, easy to be blinded by science and that sector isn't it? So it is our first. It was a song wasn't it? Yes, it was. Double by our first of the day, TLC's Pharmaceuticals. Now, we actually asked our two experts to come up with a stock of their own that they're liking the moment and they actually come up with something very similar. Two separate stocks, but let's get into it with the first one being echo IQ. This is Henry's pick. It is an AI driven med tech focused on improving diagnosis of structural heart disease using advanced echo cardiogram analysis and secured commitments for $110 million institutional placement, uh, ProMedicus investing 10 million initially with option for another 10 million. Henry, why have chosen this? Primarily because we had a lot of success recommending 40 X, which you will remember was sort of languishing at around 40 cents and then ProMedicus did a deal putting money in and a strategic partnership with them. And they have done a similar deal in some respects to echo IQ. Now where 40 X was the next generation of lung imaging using AI and 4D technology. I'm not sure what 4D is. Maybe it's adding a time dimension, something out of Doctor Who. But echo IQ has done a similar kind of deal. They've just raised some money, which is going to be used to push out in the US. If they do get FDA appearance, you know, they're going to be able to leverage off ProMedicus's network. These guys are the next generation of cardiothoracic imaging as well. So, you know, we're talking about it's a massive, massive market. You know, ProMedicus has spent an awful long time trying to, trying to open up this market in the US and has done so very successfully. Echo IQ is going to piggyback on the back of that quite quickly. And now they've got 110 million bucks in the bank. It has run, you know, it has run pretty hard to say the least. There has been a bit of a funny favorite. But it has, you know, even before this deal was announced that it was running pretty hot. But, you know, piggybacking on the back of ProMedicus with their enterprise grade. Medical imaging software seems to make absolute perfect sense. It certainly makes perfect sense for 40x. And it certainly makes perfect sense for IQ. So, I was kind of hoping that we would see a little bit more of a pullback with the stock in the placement. Currently it's trading nicely above that level. So, it's for me, it's a hold. I would be really happy and I'd be delighted if I could buy the $1.25 again. But that doesn't seem likely in the near term. But if it comes back towards that 145 level where the placement was all you were lucky enough to get stock in the placement, I would be holding on to this. I don't think it's, you know, 40x was a 10 bagger and from 40 cents to four bucks. It took a little while. I'm not sure this is a 10 bagger mainly because it's kind of starting from a higher base. It's already, you know, a billion dollar company when the ProMedicus guys did that deal. So, you know, it's probably got less runway, but it certainly could easily continue to push high. So, this is a buy. I'd love to buy it cheaper, but at the end of the day, if you can't buy all of your holding at the cheap price, then maybe you kind of pyramid in a little bit. And you buy what you can along the way. All right, so that would be a buy. It's a hold, essentially, but a buy on pullbackage. Jonathan, what do you see? Yes, similar. So, I like the company as well. So, having a chat, you know, we would, we would told about the ProMedicus, sort of rumors about a year ago when it was trading in the 30s. And obviously, you know, it came to fruition, but, you know, in stock trading or trading in general, like, you know, being a long timing is wrong as well. So, it took a while for it to take off. But obviously, once it did start running, you can just see the potential in these biotech companies. Now, it's trading about a billion market, capital moment. ProMedicus is roughly about a six-bill market. Oh, I forget the exact number. But you can just see the kind of penetration that you can get. And the thing is, what you'll find is that when the institutions invest, you know, seven figure, eight figure deals into companies, it's usually a safer bet that you're not going to make, you know, obviously the larger gains, you know, it's not going to be a 10-bag, but the thing is, you know, the pullbacks will be a volatile stock, but the pullbacks will be a lot more easy to hold onto because, you know, these companies are all about execution now. It's not like, okay, so there is an FDA approval coming for the actual process. But the fact that I believe John Hopkins, you know, some of the top hospitals have already rolled out their product tells you that, you know, it's going to be the, you know, it could be the standard going forward. So, yeah, similar to Henry, it is a buy longer term. I do think it's going to head on, but I just think that if you are sure the term trade, I keep an eye on the price action because I think that it's going to keep running because these biotech sector is hot at the moment. So, I think it's a buy in general. Okay. All right. So, we'll longer term buy, but, yeah. So, if you are longer term guy, yeah, don't rush in now. Yeah. But if you're looking for like a 20, 30% move, I think there's that in the offering. All right. There's your opportunity to keep an eye on EkoiQ. Well, in the similar space, then let's go to John's and Speak, a TRIA. It's AI cardiology company focused on improving the detection and management of coronary artery disease using advanced analysis of cardiac CT scans. Also, I got a comment from Chris here said that they have said they're improved medical software gift doctors results in testing minutes instead of days. What's the panel's comments? Jonathan. Yeah. So, you could actually just go into the clinic now and get a result within, I think, about 10 to 15 minutes. That doesn't factor in that hour wait that doctors make you wait as well before that. But generally, it does speed up the process. So, the main difference between a TRIA and Ekoi is that, you know, they're both heart diseases and obviously, I think going forward, we're going to be more health conscious and obviously we're an aging population. So, they're both in a very, very strong sectors, which, you know, should be growing in the future. The main difference is that our TRIA is more the overall coronary disease. So, it's looking at the your plaque levels in the actual, in your veins and around the heart, whereas Ekoi is specifically for the heart. In general, I think that could actually be a larger market, because people will be looking for coronary health more. So, I think there's more upside in terms of market cap for a TRIA going forward. So, that's why I prefer that versus EkoiQ. But the thing is, you know, EkoiQ is with the primary, it's piggyback. I think there's less execution risk going forward with that. So, they're the two main plays, but I just think overall, you know, I try to just keep coming up on my scans. You just keep hitting your highs and like, what's this stock do? I thought, let's force myself to do some homework on it, put it on the call. But I do think that, you know, they're both training roughly about a billion market cap, and I do think they reach maybe about a three or four billion market cap both for them going forward. So, it's a buy for me for a TRIA. Buy now. And it's a buy now because I do think that it's broken out, and I do think that that biotech sector is hot right now. Alright, hot Henry, are you in on TRIA as well? Yeah, just in the side, the primary medical, the market cap there is about 22 billion. So, put that into some sort of perspective. As far as I try, I guess it could be a IIQ 2.0 in terms of some sort of deal with someone like Primedicus, putting that strategic investment in their imaging side of things. It is a massive, massive market as we know, coronary disease is, well, is a killer. And this one has been a fund manager, a favourite for a long time. And I was first made aware of the stock with Amina Rosenberg, who was the fund manager at Minneswell Capital. And these guys have been very, very positive on this one. And I did a podcast with her and she was very positive on our TRIA. And it has done very, very well. So, I think that's going to continue. I'm with Jonathan in this respect. I think there's probably more upside to come. It is a billion dollar market cap. So, it's not small, but it is a massive, massive market size for their software. And anything that can get results and get information into Dr's hands inside minutes as opposed to waiting hours is going to be very popular with doctors. So, I think it's looking pretty good in terms of the software, Plark, etc. We're all trying to avoid the plaque in our veins and arteries. So, I think this one's got more bounce in it. Again, it'd be nice to buy it on income pullback. But some of these things don't pull back very fast. I think it's a buy. All right, that is another double buy. G, we are on a roll. The second half of the show. Is that going to continue? Well, next talk is seek something very different. It is the the jobs platform online platform of course and Roger saying he's taken an initial stars position in the stock based predominantly on valuation ground saying in his opinion is quality business and would like to hear the panels opinions being one of the worst performing stocks on the ASX over the past year and because of those AI for years essentially is going to disrupt the disrupt the job matching platform and its business model Henry what do you think? I've been a bit of a Debbie downer on all the old school platforms I call them these are the companies that disrupted the rivers of gold from the old Fairfax days in terms of the jobs market in terms of the car market in terms of the real estate markets I've been bearish on RIA seek and car and I really don't see that changing I have to say at the moment it's it's been milling about towards the bottom is how to horror run this year down from sort of 23 bucks and here we are at 13 bucks 4.8 billion dollar market cap and clearly AI is going to have an impact clearly the economic headwinds are going to have an impact on this stock as well so I am still a little bit skeptical in terms of whether this is going to be a winner or a loser from AI so for me the jury remains out as it does with a lot of our sort of software stocks but but these you know I think you know as these three companies disrupted the traditional media model of the classified ads so there are new people coming along a new businesses that are going to emerge that are going to disrupt these old school platform stocks as I call them and and sort of muscle into their business. So I'm not a fan of this one it's not a sell because it's fallen so far it's it's a hold but as I say there's probably better things to play elsewhere I would just you know there's other things. So I think the main problem with seeking like you got car grip in the area which Henry alluded to is that I just think structurally people don't go look the next generation don't get their jobs from seek like they used it so yeah I'm I'm in my 50s and you know I'm a bit having to go into class and actually look in the paper look for it but I think the next generation of job seekers you know they actually just chat to their friends like there's just more communication methods available to find out what they are yeah absolutely and like there's just more you know information out there to try and find out what opportunities are out there you know so people are using social media posting here to get their next highest and you know it's usually more referral so that's why I think that's the main problem with seeking. The next generation is that structure it's kind of like you know treasury winds you know the next generation doesn't drink I think with seek the next generation doesn't use seek to look for the next job I think that's the main problem going forward I think that you know they will use AI to cut costs within the business and help generate things but yeah I think it's more of a structural tailwind at the moment so it's an avoid for me for seek. Alright that brings us to our final stock it is TPG Telecom Oscar asking about this did report strong mobile subscriber growth improved earnings and a major uptasked in free cash flow for FY 25 Jonathan what are your thoughts. So usually when you when you're buying tailgates you're buying it for the dev yield problem is you know if the stock gets smashed it's like okay well you know you're holding it for the dev but your capital just gets eroded there so you can just see it's strong. Yeah exactly and it's just the narrative on you know basically the dead levels that they've had to take on you know that you've got three mobile sort of carriers or internet carriers that are the main here in Australia and yeah it's struggled after that earnings announcement so for me I mean like you look at as we said tailgates you have a look at what Telstra has done in that same space some reason people just love that network more and you can see that in the shape. And fortunately TPG is the other end and yeah I'd be looking elsewhere so that's a. That's all you say hold or if you if you had if you didn't sell it yesterday yeah it's that time machine again you've missed you've missed that window the time machines closed so you can have to hold on for another year 2020 on site. Henry. Well I have a question for Jonathan because I'd love to know his skincare regime because for a man of 50 years old he's looking remarkably youthful. So thank you very much Henry. So whatever he's doing please send your your hacks and your tips to me because I'm clearly not doing the right thing nor is TPG at the moment it is clearly not doing the right thing and it's fallen those results were somewhat disappointing to say the least the trading update was soft. Although they have reiterated FY 26 guidance I guess interestingly yesterday we saw Telstra with with a bit of an update on their coverage I mean everyone always thinks that Telstra is the best mobile provider and their coverage is is you know beats everyone hands down but there was some question marks about their coverage which I guess goes to the quality of the service but this one has been pushed down I suspect there's been a little bit of tax on that. There's been a little bit of tax loss selling so maybe we'll see a little bit of a push back towards maybe 380 but it's it's hard to get truly excited about this one of these kind of levels for me it's probably a hold I guess the results in August will be interesting in that respect and will probably be well anticipated so a hold at this sort of $3.60 level it could push up to $3.80 but it's again you know it's it's pretty hard to get excited. About a mobile provider in this kind of in this kind of market at the moment so yeah it's and then of course you got Starlink it's you know Starlink but I keep getting ads for Starlink's Internet and it's getting to be this you know almost cheaper than to rest really based that the right word to rest really based internet providers so yeah I think this is one that I'd be happy to let go through the keep of the time. But if you got it probably hold it and we could see this to $3.80. That brings us to the end of the show let's sum up the second half of the show then Tillix Farmers City calls a double buy Jonathan saying like technically looks amazing. Jonathan Henry pointing out yet grinding higher also fundamentally looking positive as well so it isn't double buy similarly there getting into the analysis of heart and plaque in the arteries never a well it's a bit of a few years to get all there isn't it but to that point echo IQ that's what it does it is it's a long to buy essentially for both for echo IQ. Similarly with the atria it is a buy from both Henry pointing out is a bit of a funny favorite or could be echo 2.0 in fact he says and seek well that's very different is not obviously the the impact of AI potentially there or already seeing it. And as a hold from Henry whereas Jonathan would avoid it and finally there it is a double hole for TPG telecom. Gentlemen great show couple of buys double wise there as well for you to Henry you can consider for your next meeting of the investments committee. Henry thanks for joining us at my crystal. And likewise Jonathan thanks for joining us. It was actually 3 double buys worth 3 double buys I said a couple 2 3 3 who's counting you are. All right and thanks to you for watching.