the call: Wednesday 17 June

[Music] G'day and welcome to the Call 10 Stocks picked by you two experts one hour it is Wednesday during the 17th of Matrigaig and great you can join us on the show today also joining us Michael Gabel from Fremont Equities and for the first time Peter Rogers from Team Invest Peter welcome great to have you on our team at least for today good to take you along for the ride on the show as we get across 10 sites plus of course our stock of the day will Peter we begin with a broader market outlook how are you seeing it play out of the moment obviously in the wake of that interim deal that's been done in the Middle East and Obviously we're seeing that momentum continue on Wall Street how though you're looking at the local market Yeah, I mean it's interesting times isn't it lots of news and the news comes thick and fast every day as for sure with with current administration in different governments around the world so you know at Team Invest our principals are more timeless week we don't tend to focus on daily moves in the market or the themes it's probably no different than what other team investor panelists have come on and said before so you know we take a cautious approach to the news and to the media and you know if anything it presents good opportunities from time to time in terms of the peace deal you know it would be speculating to you know which we don't like to do in terms of whether this peace deal holds and I think you'd be speculating you think it does and you'd be speculating to think that it doesn't so yeah we like the market at the moment there's been a general pullback in Australia it's giving us some opportunities hopefully there's someone on the list of stocks today that we can we can recommend a bike for Indeed we do Why do cells are also the thing to do as well obviously you need to sell at some point potentially not necessarily you guys there at Team Invest I know you're long to hold it's Michael how you seeing things at the moment and particularly from a chart point of view what are you seeing with the S&P ASX 200 yeah look I think you know short term this a parent deal I think is an opportunity to you know pick up some things I'm still very positive on the oil space I think that you know the last few days is definitely an opportunity for energy stocks so you know the view I had at the start of view before the war I still hold and that's energy stocks will be heading quite a bit higher but you know I'm on the energy stocks what you're talking oil gas coal where are you all of those yep right all of those so definitely it's an opportunity in terms of the rest of the market I mean longer term look we're coming up to 30 June so looking back in the past 12 months for the ASX 200 it is fairly flat you've pretty much only made a few dividends if you're holding the index but huge divergences within the ASX 200 so as we as we almost draw to a close for the financial year you know if you've been overweight health and and tech you've been hurting if you've been overweight materials and energy you're doing very well so I think those themes will continue so I still think it is very much a stock pickers market even if we look longer term for the next few years I still think there'll be an outperformance in the in the hard assets on the market all right well we'll take that as an optimist ticket out look then from both our experts so let's turn to our stock of the day now of course there have been a number of prominent downgrades locally and it continues with flight center it is our stock of the day it's cut it's that by 26 profit guidance by up to 50 million dollars on Middle East conflict but as launched the 200 million dollar buyback is now expecting profit of between 275 and 295 million dollars down from 310 to 345 million dollar range speaking at 50 million dollar hit to leisure earnings as well as hits from touring business cancellations and also FX headwinds however it says the corporate division remains on track for strong growth and the on market share buyback follows the completion of a sharey purchase program so shares actually lifting off the back of that updates Michael let's start with you then instead you also to see the trends that are developed on the chart what do you see yeah look I mean it's it's usually a bit of a tell when you I guess get an announcement from a company that at face value doesn't look great but the share price pops so it does tell us that the market was expecting you know potentially a worse impact from from what's been happening overseas obviously the buyback helps so look I think in the short term you may see the shares lift higher but I am still wary of the negatives in in that sector and that's clearly you know consumer confidence is still very low we've got a lot of sort of issues here domestically with with the economy and and purchasing power I still have the view that oil prices will go back up again so I think that will start to not only weigh on confidence but on the cost of travel so look in the short term I'm happy to say that flight centers are hold but I think beyond that I'd be looking to to exit and find something a bit more reliable on the A6 to invest in okay so a whole potentially though looking to sell Peter how do you view it and I guess what are you seeing in the in the travel sector is do you want to be there at all yeah I mean we're not we're not sector specific so we're fairly not just agnostic in terms of you know sectors of the market that will get involved in you know in terms of the companies that's that's where we generally focus you know I agree with Michael here that you know obviously this isn't much of a surprise to anybody that that they're we're going to suffer this quarter in particular having said that generally speaking you know it's a pretty good result really for that you know for the whole year to sort of match where they were last year given given the quarter that they've had you know and you know it really comes down with flight centers to what you think is going to happen with that piece still in the short term if you are sort of wanting to have a view on where that where the price was going to head in the short term and that yeah that's that's for that's a game for for someone else I suppose at team invest we like to focus on the on the business itself you know in terms of of of travel you know there's a lot of anxiety you know I'm myself traveling to Europe in in a few weeks time and the anxiety and most family and friends about about traveling through to buy you know it's funny enough that people have a fovee about fully head of the sky surprise so I think you know travel is not going to return to normal anytime soon so for this business you really could look at long term what do you think the business is you know in terms of flight center this is a stock that we're used to follow we it hasn't passed our filters more recently return on equity and return on capital you know still in the single digits you know we prefer it to be to be sort of much higher than that on the stock buyback you know we generally like stock buybacks we think it's you know a good way to return capital to shareholders but you know under the condition that you know that capital couldn't be spent better elsewhere so sometimes it's a it's a marker that you know there's a lack of other opportunities to invest in but also that you know it's done at a sensible p e um a carpe of the flight center it's sort of 24 times it's not demanding but it's not cheap either so you know be hoping they weren't going to put too much of that 200 m dollars of work you know too quickly you know they need to be price conscious when they're buying back to shit shares like that look piece will return and travel will go back to sort of normal if I take the announcement before as I said return I don't if you turn a couple of still you know they're not back to pre-COVID levels hence they they don't to the pass our metrics if they continue to improve and they have done pretty well over the last thus few years then it could be a future potential welfare winner um for now I'd say you're already honoured it'd be a hold all right double hold then for our stock of a flight center let's take a look at the first five stocks as chosen by you are we are going to get across a liver lithium resmed smart group ANZ and Lenless so let's begin in the lithium space now this is certainly not a stock I have come across before I don't think it has been a cover on the call and Peter I dare say it's probably not one that you've looked at there it's the you mean best particularly given it is in the lithium space and look it has in fact more recently released an updated scoping study for its North American lithium expansion now Chris asking the question saying this is a lithium play that I hold among others such as core lithium I'd like to insight into the potential going forward Peter what do you think yeah so for the guests that don't know this is a merger 50 50 between so I only and and Piedmont lithium you know for us it doesn't have you know sort of the six years of history that that we like to see in a business and the history that it can see, it really doesn't show any profitability. The mining companies generally, as you indicated, they don't pass team invest filters. It's not that we've got anything ethically against mining, but they're capital intensive businesses. The price takers, they've got generally weak moats, and beholden to just a whole raft of issues that are beyond management's control, like what's in the ground, what's the oil price, going to be et cetera. So generally speaking, they don't have the stability of earnings that we like, even if they are profitable. As you say around the project, it seems exciting, and they generally do, though, when these scoping studies come out, and they always promise so they're fairly big things, I've spent 20 years in my career studying mining projects and trying to bring them to market or to development or to execution. I can tell you, from first on experience, it really is a death by 1,000 cuts. There's just so many things to get through and so many things that can go against you and the overall sort of outcome. This has sort of got one operation, but a huge pipeline of projects that have got that going for them. The problem for us is even if they get these pipeline of projects off the ground, generally speaking, they're going to have to invest for a long period of time. There's not going to be any sort of return to shareholders. And in that time, you're talking probably 20 or 30 years for them to get through this cycle of projects if they are all investable, you need a crystal ball into what's going to happen and they'll live there and market in that time. If you got special insights into any of the projects and have expertise in analyzing them, then by all means hold it. But you could have bought this business for less than $5 in each of the last two years. So I'd take my money and run if this is a sell. Okay. All right. A sell for you. And you're right. I'm dinner collective. So it is that merger, the result of that merger between Pete Monten. And also dual listed to Michael on the NASDAQ. What do you think? Look, it's not here, not one that I've followed, but I mean, if we just sort of, you know, quick rundown at a high level, you know, commodities in general. Yes, I'm still very bullish. I think we're in the early phase of a commodities bull market. So to understand why we get these bull markets, it's basically they come as a result of many years of underinvestment in supply. So you might go for 15 or 20 years where you just don't want to own any of these mining companies, as Peter mentioned, their price takers. So there's a, you go through large periods of time where, you know, they can't really make much of a difference because the prices are going up. But then you get a pocket of a few years, five years, where that lack of supply, that lack of investment in supply really hits home. The prices head substantially higher and you can do really well holding these stocks. So, you know, when it comes to lithium, look, we've been happy to trade in and out of lithium over the past year. In stocks like PLS, men, we've been in and out of those a few times. During that whole period of time, we've held BHP. So the reason why I'm a bit more nimble with lithium is it feels like only five minutes ago, there was a little bit of too much supply in lithium as we know. I think that's a bit of an issue hanging over this sector. So when it comes to EOV, yes, they've got a bit of production underway. They're still developing, they're still raising money. So they're at that sort of end of the scale. It's trading well. We could see it's massive runs end of last year, had a consolidation. Another run, it's consolidated recently, sat on top of the January high. So I look from a charting point of view, I'm happy to hold this. I think it can head higher. But I just think you need to be a bit more nimble in the lithium space because, as I said, I think the supply can ramp up a lot quicker than it can in other commodities. What would you favour to pick be that in Lithium? Look, I'm happy to stick with the majors like PLS and mineral resources. It almost doesn't matter as long as you've got to be a bit more of a trader with this sector. That's the view on the lithium. Yeah, indeed. All right, so now move on to ResMed second stock. Now Alex has to come out this one. And Alex saying, "Hi, I love the show. I was listening while doing my rounds on the farm." Great to have you. Alex, great that you can take time out to listen. Hopefully you get some useful information out of it. Now you're saying I bought ResMed back during the GLP1 scare in 2023. I wrote it all the way back to $45. And since then it had back down to $27.28. What's going on? He says, "No downgrays to speak of an EPS growing reliably." Michael, it's up with you then. And obviously it's been caught up in health care. It's been very negative hasn't it? So what's the chart chilling? You are as there's some opportunities here. Yeah, look, the chart does look negative. Yeah, that sort of pullback fee years ago was a gift. We could see the 2023 that you backed up the truck back then. But obviously there's, it's been in a downtrend since the middle of last year. So look, even longer term, I mean, as a long term whole, this is poor investment. If you bought a five years ago, you haven't made a return. You've underperformed the market. I mean, at least it's better than CSL, CSL's back to where it was 10 years ago. So very poor long term investments. If you're not paying attention to the way things are changing out there. And in terms of what's changing, look, there are growth concerns in the US. There are concerns over these weight loss drugs impacting their business. So yes, the company is still running as it mostly as it has been. But yeah, there's headwinds in terms of what might happen with future demand. But also, I think the other factor that not a lot of people are recognising is, I've spoken before about the market since the middle of last year. He has really started to rotate out of high-PE stocks. That's mostly affecting tech. But I think to a lesser extent, it's affecting growth stocks like some of these health stocks. Like some of these healthcare names. So what I mean by that is, as we go through a period with higher interest rates, higher inflation, higher uncertainty markets. And you get this every sort of 20, 30 years markets. Just don't want to be in those higher-PE stocks. So look at some point, I think ResMed will get cheap enough that it will be a buy. I don't see that yet. So I'd be happy to. Yeah, look, I'd sell it here. There's better opportunities in the market. Interesting. All right. Peter, look, I know having spoken to your colleagues there at Team Invest, they obviously see the merit in this stock. How do you view it right now? Yeah, as you say, not a surprise. At Team Invest, this is a Team Invest company. It's a favourite of a lot of the members. You know, it passes all of our filters. It passes all of our filters, has for the whole time that I've been involved in Team Invest and still does today. So in terms of that sort of five years, you know, the business has been growing in that time. So to the extent that you haven't sort of done that well out of it, I'd say, be patient with it because the earnings have been growing at 22% per year. That's a decent number if you can get it. And there really hasn't been any sign despite the commentary that goes around this business, that that is going to change. Obviously, it all comes with risk. Our models do show that the sort of sales has been growing slower than earnings. So we don't expect that it will continue sort of at that clip. I think on safety, margin of safety, we've got a growing sort of in the low to mid-teens. So Alex, it's a really good question in terms of like, you know, what's going on. I could see here in speculate about what the market's thinking and why people are selling and buying. It could be the GLP one. It could be that, you know, people with the AI is going to come and take over this sort of data analytics part of their home care business. You know, it could be any number of factors. It could be that health care, the index as a whole is fallen and people are sort of moving out of it and taking this with it. I mean, the end of the day, who cares? I give somebody wants to sell you a great business for less money. Shake the hand and let's get into it. So, well, we want to own great businesses that will run that have a higher returns and invested capital and the employee low debt. You know, we can do that. Then we can we can have a sort of a better chance of valuing this company and predicting what it's going to do over the next five to 10 years. And, you know, where has made really ticks all of those boxes for us? In terms of valuation, I did look at this company a couple of weeks ago when it was sitting at $25 and I noticed that that was the lowest p.e. That you could buy this company for in the last 10 years. So, you know, the market is very negative on it. It sits so far to the left on our fear integrated fear greed indicator that, you know, you know, we had to go and buy a bigger monitor. There's always risk of any investment that may not work out, but, you know, if you hold those principles of identifying it. buying great businesses at a good price, then it works across a whole portfolio and I'd be applying that formula to this business, so it's a buy from me. Bye. You're a true to your colleagues then sticking with the buy on res map typically getting where it is at the moment. So that, 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. All right, let's turn our attention now to Smart Group. This is PickballXC. Let's provide those outsourced employee benefits, admin, salary packaging, I've added at least seeing fleet management payroll administration as well. Recently launching that on market buy back up to 20 million dollars worth of shares. Peter, do you like it? Yeah, this is another team invest company. Once again, passes all of our filters. We've got a lot of intelligence on it, looked at it for a long period of time. In fact, straight after lunch, we'll be doing a deep dive downstairs into this business again in the Brisbane Group. They've got pretty good partner mentality. They've got decent skin in the game, not a huge amount, but a decent amount. The modes, the kind of modes that we like, they've got good regulatory expertise, solid client relationships, it's a bit of a trapdoor mode. So actually, a sticky kind of a business. Return on equity and return on assets are both very good and have been improving recently in that 20% range and they do that with manageable amounts of debt. That's allowed earnings to be shared a grow at about 10% per year over the last six years. Despite that, they're paying out about two thirds of their profits in dividends. So, being going pretty well. The high dividend ratio, payout ratio, that might attract some more strain investors, given the capital gains tax changes that are being spoken about. So, it might get a bit of a boost here in terms of PE, but really, again, that's sort of speculation. This sits pretty high on the PE. Metrics for this business and it's historical PEs. You could have bought this business for less than 15 times any time in the past seven years, counting since it's about 20, it's a decent business, but at the moment I call it a halt. Yeah, same thoughts. I don't really have much more to add to what Peter said. We could see that, look, he had a massive run up after that sort of updating May. And basically, as we could see on the chart, it's just a vertical move. So, clearly, when you see vertical moves higher, usually they result in a bit of a sharp pullback along the way. So, look at the hold, but I think if you're looking to buy it, just wait for some sort of consolidation as I said, it might get caught up in a general market. Malay and end up sort of under $11, and then you can have a look at it. But no, business looks good and it's tracking well. All right, so both in agreement, there's solid business worthwhile holding at this point. Well, it's now turned to the banks with the focus on the ANZ. It is the next cycle. We're going to take a look at Chosen by Tanner and Michael. Well, in fact, they've all been drifting lower, but of course, we know where they've been to the past few years among the most expensive banks in the world. What's how's ANZ stand? Look at the banks. We talk about the banks all the time. They're very well understood, but the banks are a classic example of stocks on the market, don't always move based on their earnings. There's also just general money flow, and that's really affected the banks in the past couple of years, a lot of passive money, whether it's ETFs, whether it's super funds, allocating more to the top end of town. And you end up with this sort of, as we sort of dobb it a bit of a momentum trade, and that was definitely the case last year and left a lot of people scratching their heads. Why our banks were just so expensive. I mean, ultimately, CBA is the best out of the big four banks. It attracts a premium and rightly so. ANZ's got some work to do, but yeah, look, I think we're going in a tougher period now for the banks. Clearly, the economy is struggling. The housing market is going to struggle for a while. And obviously, they're not exactly cheap where they are. So look, the uptrend that we had last year in ANZ has finished, it's falling lower. It is hitting a bit of a support level here, so I would say if you were open to selling ANZ, hold onto it. I think you'll get a bit of a bounce. It might make a couple of bucks, but I would be looking to then sell it and move on to other opportunities. I just can't, you know, with a sort of one or two year horizon from here, I just can't see the banks out performing. Okay, so a hold for now, but ultimately a sell for Michael. Peter, have you got any banks in the team in this portfolio? No, they don't generally pass out debt filters. So, you know, thanks a kind of haven't really ever passed and made it on. And look, besides, whether they did or not pass the filters on debt, I mean, what's not to love without Australian banks at the moment, you've had a 10 year bull run in housing at least. And, you know, profits of ANZ are exactly on earnings per share basis exactly where they were 10 years ago. You've got falling that profit margins. You've got increased competition. The systemic risk snail through regulatory changes and, you know, most of the talk is that the housing market is falling or is going to fall, and that seems to be playing out. I suspect, you know, sort of growing with Michael, this has probably been raised because it has had a bit of a pullback, but that's, you know, you're going to be careful of anchoring buyers here. Banks were, you know, incredibly expensive last year. If you looked at it on in global metrics, you know, our banks and the premiums that they were trading on, we're just, we're just incredible compared to, you know, equivalent banks around the world. The PE for ANZ as an example was 17.9 when I looked at it on the weekend. And you could have bought this for 12 times earnings every year for the past 10 years. So, this can still fall, you know, and, you know, may well do, especially if they continue to not be able to grow earnings. So, you know, if you're buying a company's earnings aren't growing, maybe, maybe you're doing it for the dividend yield. So, you know, if you look at their dividend yield at the moment in the low fours, you know, that's exactly the same as a 10 year government bond, which has much lower risk. So, I can't see much reason that you'd even hold this. I'd be recommending a sell. And that's probably true for all of the Australian banks. All right. That's the UNA in Z. Let's turn to Len Lee's, the fifth stock. And, well, you could have called this a blue chip. I don't think it meets that definition anymore. I think of another stock like AMP. They've not what they once were. So, this is obviously real estate investment business development construction, but it has offloaded a big part of its business strategic review. I've actually got rid of some overseas interest there. Shares did jump more recently on their new chief executive appointment. I did also reaffirm its guidance just last week. In fact, Peter, how do you see it? Yeah, not a team of S company. You know, we don't follow it. I don't think we ever have. You know, it's just got no stability in this business for us to be able to sort of, you know, make a decent valuation of it. Yeah, it's profitability metrics. You know, even when times were good, we're not great. It doesn't pass on debt. I mean, the question is, how do you try and value this business at the moment? It's got a new CEO. It's having a strategic reset. You know, both of those things are generally red flags team invest, you know, because we like to know what we're buying. You know, there's a number of other companies that are having strategic resets at the moment, you know, I think CSL, Cochlear, etc. You know, I'd be much rather if you want to, if you want to sort of speculate on turnaround stories, then, you know, that's where my money would be going rather than, rather than Lenleys. I think the other big problem for Lenleys really is that, you know, it's moats being a sort of a development construction company is moats really are about its ability to sell, to sell a development, build relationships with customers to buy those developments and negotiate for the land. And I think, you know, to extent that they had those moats, a lot of them will be, you know, probably long gone and that they'll need to time to sort of reveal those moats over time. So, well, you know, if you own this stock and you have for a period of time, it's probably already a very, very small part of your portfolio, you know, given the performance it's had. So, bo means if you're holding it, you know, it's not expensive, now so, you know, hold on to it. There's still real risk for this can't be, you know, including quite a high debt level. So I'd call this like a very weakhold. If you're not in it already, I'd put it in the too hard basket. Yeah, if you've ruined it this far down then Michael beats the question. Is there an extra point given it was way past where it was? Yeah. Yeah, look, I agree with everything Peter said, but I'd still be happy to sell it here. I think that, you know, the problem is it's one of those sort of big names that the people see and they just feel as they say, well, it's, you know, it's a big name. I mean, you did accidentally call it a blue chip because it feels like it should be blue. Well, it's not exactly. And, you know, I think some investors say, well, I could still see that they're out there. They're not going broke and they use all these other excuses to hold onto it. But I think if you sold in these and you picked a few other rats and mice and you'll portfolio and sold them, you might be able to scrounge enough to put it into a decent company. So, yeah, look, short-term chart, terrible long-term chart. It's going to make 30 years. That's terrible as well. So quite simply, it's a sell. All right, that chart. Silly tells a story. All right, let's sum up the first half of the show. Then beginning with our stock of the day flight centre off the back of profit downgrade, but share by back announce their shares and higher as a result. Both will hold it. These current levels, although, Peter just a little wary there in terms of likely headwinds to continue and Michael also thinking about the oil price, it may well come back. So, that takes us to the first five as Chasmauu. Lithium, L-Elevera, there, that tie up between Pete Mane and Sanna. It's a sell from Peter and no stable earnings. Michael is bullish on commodities. This can head high. He would more likely hold it. ResMed, which has been caught up in that sell off of Sanna with healthcare stocks. Look, Michael would sell it, saying that downtrend remains intact, whereas it's one of the favorite stocks there at Seam & Best. Peter would buy it, so these levels, great business, well run, he says. The fundamentals you need to watch out for. Smart Group. It is a hold from Peter, a good note. Sticky Customers, he says. Michael said, "Look, obviously it's a very strong run-up that it's had more recently." He would wait for it to consolidate to buy back in, so he would hold it at these current levels. A&Z, certainly unenthusiastic about the banks in general. Michael would potentially hold and then sell. If it bounces just a little higher from this point, whereas Peter, so look, it's not growing earnings. It wouldn't be there. He would sell it. And finally, at length, it is a hold from Peter and a sell from Michael. All right, let's catch up with the own high-conviction fund that is picked by investment committee going into June. It left the cash level unchanged at about 8% of the portfolio. Two stocks out, two stocks in, so Santos and Judo were rejected, and they brought in Energy One and SiteMinder. Why? Head to osbis.com.au. You look for that drop-down menu, the Investment Committee for it. They're reasoning now. So far, the fund is up 34.5% on a cumulative return basis since it began in March 2022. So keep those requests coming in. Good noise and uncertainty. A disciplined approach to investing matters more than ever. Wealthy and Wise brings team invests value investing playbook to osbis. On pack, how the macro environment impacts business analysis. These are the conditions of major global bubbles. When you suspend disbelief and say, "The earnings will come one day." Just not now. Put similar stocks head to head and make a call on which one rings. "I think it's a good time to be a stock picker. What better time to buy than when the market is ignoring what is a wonderful company." Plus, ask team invest experts to deep dive into a stock or topic of your choice just to email us your questions. Live from 1pm every Wednesday. Wealthy and Wise is your guide to value investing powered by team invest. So the second half of the show we're going to take a look at Tritory Wine Estates tab called CarGruit. Tech Gen and Computer Share. So let's kick it off with a look at Tritory Wine Estates. You're asking about this stock and it's taking a look at it as well. In fact, Peter was mentioning these companies that have engaged in a strategic reset. It is one of those shifting strategy to concentrate on investment of some 10 key brands, essentially including a so-called three power brands of penfolds, Dale and Matua are generating about 72% in fact of the gross profits from just 25% of volume. It is also reviewing its US business which has been struggling. Peter, what do you think? Yeah, another turnaround story. So it's based historically, once again, not a business that we follow. It's Return on Capital and Return on Equity generally, you know, sort of don't meet our filters there in the high single digits, even if you take out the US impairment. I think we've lost Peter there. Michael, maybe you can pick up where he left off. Yeah, look, it's also not one that we follow, but we seem to be asked about this a lot, I think, you know, maybe people like trying to pick that turnaround and hope for a bargain, but it's interesting that you mentioned the consolidation of brands and the focus on improving their margins. Surely, I'm sure we've heard this before, out of Treasury wine. So they're still saying that, they're still trying to do it. Meanwhile, costs are going up. Earnings are suffering in their overseas sort of expansion. You've got changing, you know, changing behaviour when it comes to buying alcohol. And obviously, it's a demographic thing. Yeah, it's a demographic thing. Plus, you know, prices are, yeah, as we know, prices of alcohol is going up outside of Treasury wine's control, just through government, you know, government excise every year. So I mean, I think, you know, as we all know, if you buy a bottle of wine or whatever, over the course of however many years, it feels like that's outpaced the growth in wages. So it is becoming harder and harder, and this is in an environment where we've got, again, high interest rates and, you know, lower consumer sort of spending power. So look, a very difficult sort of environment. Yes, they're trying to turn it around, you know, I need to see evidence of it. Look, I suppose the one positive is that, you know, in their trading update, you know, had a bit of an update the other day, you're going to a little bit of pop in the share price. So maybe it hits up in the short term, but we could see the long term trend is still to the downside. So for me, it's a sell. Okay. Now, I think Peter is back with us. Peter, so we lost you just as you were getting by. Yeah. So, I'm going to be talking obviously the negative there as far as return on equity and the like. So just, just carry on from that point. Yeah. So, yeah, apologies for that. So basically, it is a brand-based company. You know, they're going to be at the whims of consumer discretion. People change their fashion tastes over time. So it's a hard business to now down and to get consistent in terms of the strategy that they've announced. You know, I guess I wasn't sold on it. Anytime you've got to get them make up a term to, you know, and out-shear changes straighters here to be it's a bit less than selling to me. So, I premiumized the business. That was the word they used. Yeah, bitchubious. So in terms of valuation, you know, here, it's a 12-time turning. So it's not overpriced. It's not expensive. You know, they do have consistent earnings when they can get this business running well. I'll call it a hold. Okay. Hold on a sell then for Treasury wine estate. So, with that turnaround, does actually work. Let's turn now to Tab Court. I'll ask you about this. It does provide the gambling. It's gambling in a time when integrity services. It has extended its $980 million in negated term loan facility. Interestingly though, it's also under the attention of Ostrac, which hasn't been shed in an enforcement investigation in two concerns over its handling of money laundering and terrorism finance risk management essentially in the company. Michael, let's start with you. Yeah, look up until, you know, the announcement of that Ostrac investigation. It seemed like it was, the other turnaround story. But it felt like I think there were about a year into your new new management. The business was improving. So, look, it was early days, but the share price was heading higher. And I think investors were starting to gain a bit of confidence that, you know, it was on the right track. And then this sort of Ostrac thing turned up and we could see the big dip there in April. Look, it's not one that we were holding. I think at current levels, again, you need to sort of forecast where the business will head from here. I think based on that, it's probably a bit cheap now. And potentially over the next couple of years, you could do well holding it. But you've just got these Ostrac issues hanging over it. So, yeah, it might not do much for the next sort of several months. And in that period of time, there might be better opportunities in the market. So, I guess what I'm trying to say is from an opportunity cost point of view. It might be cheap with a sort of two, three year horizon, but I think I think there's better opportunities elsewhere so I'd be a seller. So not worth the risk in holding it. No, not at the moment. Yeah. Okay. Peter. Yeah, not a team invest company. I guess the problem for these guys are they seem to be quite a capital heavy business. So the return on capital return on equity. Yeah, we'd never be interested in this business with it being so long, but so low. It's just long term investment. Yeah, as as Mark said, it's another turnaround story that does seem to be the theme today. These guys are a bit more further down the turnaround path, I suppose, but you know, it looks promising. It's producing some results, but you know, just to just to go back to some of the announcements that we get around these 10 rounds, you know, this company said that they were going to start to become disciplined recruit good staff and align the culture to share out a returns. I mean, what have they been doing? Is historically they've been doing the opposite of those things. So as I said, they, you know, I'll give I will give current management some credit, you know, they've been stealing those things and they weren't there then credit to them. I can't see this business ever having, you know, good returns on investor capital. There are still large risks. Michael pointed out the key risk there. And, but, you know, gambling regulation is always changing. There seems to be a lot of competition. They didn't move into the online gambling market quick enough. So they don't have first mover advantage. You watch. Well, looks as though we've lost Peter again, unfortunately. We'll try and reconnect. Just as we're getting to his call on it. All right, well, while we're trying to get Peter back, let's now head to our next stock. It is car group. I'm asking, sorry, I think I've just got in my ear that Peter is back. Peter, you with us? Yeah, Paul, I mean, I hotel and their wife always obviously playing up a little bit. Well, let's just get to your call on the stock then as far as tab quarter is concerned. Yeah, not a good return on capital business. Yeah, we'll be high, high PE for adjusted earnings. It's a sell. Okay. All right. Okay. Double sell then for tab court. All right. So I was just mentioning car group. It is the next stock there and the presence clearly in Australia, North America, South Korea, Brazil, and its online platforms, their car sales trainer and direct event car with motors. Peter now, I guess it has been caught up in that SaaS pocket of seven. It hasn't it because there is the threat of AI to a business like this. Do you see that? What is the risk you're seeing for car? Yeah, that's a risk that we have identified. Also, there's a lot of competition from Facebook Marketplace. It seems to be younger demographics much more comfortable to use that to sell vehicles. Having said that, historically, we've been a very, very good business return on equity, you turn on capital. I keep saying these things, but they are important. It does, sorry, used to pass L filters. Motes, they're generally strong, they've got good network effects, etc. So earnings have still been growing. They've got a new CEO, which is something to watch out for. Unfortunately, the loss camera and Macinty are to the RIA group, which is, you know, I think it's a bit of a loss, but they have promoted internally, which we like to see that they've got decent succession plans. Both C and C haven't had a little less skin in the garden than we'd like to see, but however, there's still sort of significant ownership from foundational shareholders. For valuation, the business sits just in the fear category for us, which means it's trading on a relatively low PE. I think it's a great business. Unless they can approve the return of this capital, which has fallen off recently, I'm just going to give this strong hold here. It was back to drop back into the low 20s. You know, it might be more of a buy at the moment. We'll call it a hold. Yeah, look, I mean, we, again, I come back to the rotation out of tech. So I think that that is a theme that a lot of people are missing. I think that is a big part of why a lot of these tech stocks have fallen back. It's not just over fears of AI, but we sold all our tech stocks last year, and I do believe that they are suffering from a rotation. Off-fans out of tech and I think those funds will find a home into hard assets. A lot of these companies ran very hard in 23, 24, and I think they're just giving back those gains now, and we'll settle at lower levels, at more realistic levels. So I think the issue is, and Peter referred to this phrase before anchoring bias. I think a lot of people look at where it was about a year ago and think, okay, well, that's cheap just based on a share price number, but I do believe that we're going to continue to see rotation out of these sectors. So I think they'll get cheaper for me. It's still a sell. I'm not looking to buy any tech for a while. Goodness, we are suddenly negative. Let's see how we go over the last two stocks. We are now going to move to Tech Gen. Now this explores and develops gold and base metal projects. Certainly across Australia holds a portfolio and strategic, like how did regions in WNN and Northern Cherokee and South Wales recently receiving full approval for drilling in the Blue Dill Copper Gold project. Have you looked to this home before Michael? No, I haven't. So the problem with this one is it is very small and very liquid. It only trades about 20, 30 grand a day. So in some respects, that should just rule it out because you could get caught in it. The issue is, I mean, they're actually in a trading halt now for a raising capital. So they're at that stage where they're very small raising capital gold. Yes, I'm positive on gold. I think long-term, obviously there's a trending gold. It's heading higher. Gold miners will do well, but at the moment we're still in that phaser. It's the larger than the big caps do well. The smaller caps tend to do well at the end of the run and we're not near the end yet. And we could see here that gold had a breakout around March 23. So all the major gold stocks from March 23 have had it higher. We could see this stock's actually traded lower because it's just the market's not interested in these little sort of $10 million market cap stocks or whatever it is. So it looked quite simply for me. It'd be a sell and I'll just move on to just put that money into a larger gold stock. Yeah, okay. That's fairly basic trade isn't it? Why be there when there's quite a potential with those that are already sort of well in there as far as not just development, but also producing. So Peter, no prizes for guessing what your assessment is going to be. No, it's not a team of best companies. This is even harder than a mining company. So we spoke earlier about why mining companies are hard to value. This doesn't even have any operations. It's an exploration business. I've got a leading, sorry, I've got a mineral economics degree from a leading WA university and I can't value what some of these projects are worth. So unless you've got particular skill in how to value these assets and I would say even if you do, you're still going to be using models that make decisions under uncertainty or other models with a lot of assumptions on how much this is worth. Michael pointed to, it's a liquidity. I think it's got a mark cap of $3 million. Who knows how much of any economic benefit this company produces that is going to flow to you? How much are going to be washed out as they raise capital, raising capital right now. They have one and a half million in the bank. You can't do anything in the mining industry for $1.5 million anymore. So yeah, this is completely a sell for us. Okay. Better place this to be, particularly if one of being gold seems to be the takeout from that. Let's round it out with a look at computer share, the share registry service and it did complete the sale of its US mortgage services. Upgraded its FY 26 earnings guidance lifted its interim dividend by 20 plus per cent. Yeah, once again, not a team invest company. It does get close to passing our filters. The only filter it doesn't pass on is is debt. They've had sort of relatively high debt through acquisitions over the last 10 years. So it's never popped in for us. Having said that, return on equity is pretty good, but really the return on equity is coming from the juicing of the returns through the high debt levels. If you look at return on a vested capital, it's not as good. It's only the leverage that's gaining that. Earnings have been growing for the past four or five years, but you've really got to look at what drives earnings for this business. They've got significant bloat as they manage companies share track transactions and other elements. It's an insurance company in that way. So if you overlay their earnings chart with any return yield chart for bonds, you see an almost exact one-four on correlation for this business. So, voting as business is about trying to take a view on future interest rates. We can't do that. At the team invests, good luck to anyone who can. So in terms of risk also, there is risk in the business model. No one knows how stick the business model is and how long it's going to take for digital tokens to come in and how much that's going to wash through. So I think it's a good business, better than average. It doesn't shoot the lights out. It is hard to value. I'm managing to say all the right things, things that we like to hear. So maybe in time, look if the price is right, this might be a bit of a speculator, but it sits in the middle of it's average pay brand, so it's a whole. - Michael, yeah, pretty much, yeah, covered it really well. So yeah, just nothing at current levels can, yeah, give me too excited. I mean, what's interesting is I think for anyone that's used the computer share website, you wonder how the share price has even gone up at all over the past few years, but there you go. Look, I mean, from a valuation perspective, all of that can't get too excited. When I look at the way it's trading, I'd actually probably even lead towards a sell. So you have this sort of big rally at the end of 2024, and that's another one of those situations where when you get those sort of parabolic vertical moves, it usually ends in a sharp move lower. So it's gone back to where it started that move. It's bounced hitting a resistance level at the moment. Not looking particularly cheap. So I think it will pull back. I'd be tempted to sell it here, and look for more exciting opportunities. - Goodness, Michael. - I was trying to count, and I was still on the show today. - Well, there's definitely no buys. (laughing) - Let's set up the second half of the show. It's very true, why not, it's a hold from Peter. It is a sell from Michael. Look, it is a attempt to turn around. We'll see whether that plays out, I've seen, with a strategic reset. Same could apply to TabCorp too. It is a sell once again from both. Obviously hit by the Ostrake investigations there as well, and now I'm pretty much mentioning just overall the regular tree headwinds car group. It's a hold from Peter. A new cheap executive appointed from within, so that's a positive as far as he can send, low per year as well. Michael's saying, "Looks cheap, but may go lower." He would sell it. Tech Gen looked just too small. There's pretty much the assessment from both. In the Gold sector, given what's going on there, many more opportunities, so why go there? So it was a sell from both. And finally, the computer share. It is a hold from Peter and a sell from Michael. That is the show. Thank you to Peter. Well done. First gig on the call. You're welcome back any time. Great to have you on the show. Yeah, as long as I can get my wife, I sort of doubt it. We got there in the end. And Michael, similarly, always good to be in the show. Thank you. Thanks for joining us today. And thanks to you for watching. [MUSIC PLAYING]