QAV 819 — The Roll Back

QAV AU 819 CLUB

[00:00:00]

Cameron: Now, here we go. Wel­come back to QAV Aus­tralia, episode 8 1 9. We’re record­ing this on the 13th of May, 2025. We have a new oppo­si­tion leader in the coun­try and Trump has done anoth­er back flip and Tony is some­where deep in the heart of Africa with spar­rows, I think. You for an inter­net con­nec­tion. He’s writ­ing lit­tle notes on the legs of par­rots and send­ing them to Bris­bane, and then I’m send­ing them back.

I think that’s how it’s work­ing. Tk.

TK: It is too true. I’m, I’m in Bate­man’s Bay, Sudan, I think, or Con­go. The wifi isn’t work­ing very well, and my phone recep­tion isn’t work­ing very well. So to, any­one who hears a lag in this record­ing, but it’s my prob­lem. and I wore my QI brought my, packed away, my QAV T‑shirt to, to wear on [00:01:00] the show, and, we’ve turned the video off to help the speed.

Cameron: it just gets you in the mood. It’s like putting a suit and tie on when you go to the, when you do a Zoom call, it just gets you in the mood. let’s get into it ’cause I know you’ve got a bit of a short time hori­zon today, so let’s, Yep.

Get into, I want­ed to start with port­fo­lio updates, Tony. the mar­ket’s obvi­ous­ly up today.

As I men­tioned flip­pant­ly before. Trump’s team and the Chi­na team have been meet­ing this week, and they’ve, agreed to roll back the tar­iffs. I think in the case of the Unit­ed States as tar­iffs on Chi­na, it’s gone from 145% down to 30. I think Chi­na’s dropped theirs from a hun­dred and. 25 down to 10. all the tough talk from Trump has gone, I dun­no why there’s even still a 30% tar­iff.

I think it’s just optics, pos­si­bly more than any­thing else. But the mar­ket in [00:02:00] the US overnight, shot up and the mar­ket here today is, up not quite as much as I think it was in the us. It peaked this morn­ing and has come back a lit­tle bit since then, but I think we’ve. Almost recov­ered from where we were pre lib­er­a­tion day, let’s say 40th of Feb­ru­ary.

The mar­ket was at 88, 25. We’re now at 85, 18, so not quite back up to where we were a few months ago, but get­ting close.

TK: The tar­iffs have only been paused for. to help the Chi­nese because they’re doing it tough and clos­ing fac­to­ries and, but Don­ald want­ed to help the Chi­nese to get back on their feet, so there’s 90 day pause in tar­iffs. we’ll see what hap­pens in 90 days.

Cameron: It is hard, it’s hard to read your, sar­casm and, irony with­out the video.

TK: Yeah, sor­ry. I’m being sar­cas­tic. [00:03:00] but one thing that hap­pened today was gold turned down. So our gold stocks will have gone down. think,

the ones I looked at before were between five and 10%, which I’m assum­ing is the gold price going down. ’cause I could­n’t find any news on our port­fo­lio stocks. and Bit­coin’s going up.

Cameron: That’s inter­est­ing. I, when I did my buy list yes­ter­day, Tony, I I already had gold as Josephine and they were josephines last week. Are you say­ing they’re now in a sell state or they’re just still Josephines?

TK: still josephines, but our golds Ha, Google some of the gold stocks in the port­fo­lio. Perseus, I think stand about

8%. Ramelius was down 10. not sure about some of the oth­ers West African resources, but I think it’s because, of the announce­ments on tar­iffs. Yeah.

Cameron: when I did my, week­ly newslet­ter ear­li­er today, before the mar­ket opened, the dum­my port­fo­lio was up 1.6% in the [00:04:00] last week. Ver­sus the bench­mark, which was up about 1.2%. We were at 15.85% per annum for the finan­cial year ver­sus 10.2% for the bench­mark and the US port­fo­lio when I checked this morn­ing, was down 2.6% this week and is now up 25% for the finan­cial year ver­sus the s and p 500, which was up 6.7% for the finan­cial year.

So that’s, we’re doing what, like four times almost the, s and p 500 for the finan­cial year, which is which is nice, but our port­fo­lio has come back a lot, in the last few months in the US It’s still doing very, well, but has come back quite sub­stan­tial­ly with all of the tar­iff non­sense that’s been going on.

What have you got in your list of things to talk about today? Tk.

TK: I had [00:05:00] a few things. Com­pa­nies and cer­tain­ly con­fes­sion sea­sons. So we’re get­ting quar­ter­ly updates, on sales from the retail­ers, for exam­ple, and with ANZ of course, the CEO han­dover occurred on Fri­day. So Nuno Matos is the new CEO of ANZ. the results that were deliv­ered by the out­go­ing CEO quite were quite flat. They up, over time because of the Sun­corp acqui­si­tion. ANZ was giv­en the green light to acquire sun, the Sun­corp bank, out of the Sun­corp insur­ance busi­ness. And, that’s boost­ed their, rev­enue and prof­it. But, As that cycles around, it’s been flat oth­er­wise, for them. and there’s been lots of report­ing about, the new CEO tak­ing over and seems to be doing all the right things from day one.

Promis­ing to get the ANZ app sort­ed out. [00:06:00] The bank­ing on your phone app sort­ed out. meet­ing with big cus­tomers. Staff, he wants them to be, on the ball, but, not, play­ing fast and loose as far as gov­er­nance goes. And, he’ll be good. He’s writ­ten to all the reg­u­la­tors say­ing that he’ll improve gov­er­nance in the bank, et cetera, et cetera. So that’s all good. from my point of view, I just want­ed declare I own ANZ. and I just also want to declare that it’s gone ex- div­i­dend today. So don’t be sur­prised if when you hear this, the share price looks like it’s trend­ed down a lot. it’s gone ex- div­i­dend and take that into account in your plan­ning. , And look, to be fair, it’s on the buy list, again, fol­low­ing its through results, which, it does from time to time. So that’s, I guess a good thing from our point of view. It’s back in buy ter­ri­to­ry, but there has been trad­ing side­ways for a while and it’s not quite a buy yet. you’ve got a bit of time to, to review this one, cou­ple of, what, can I report on?

sum­ma­riz­ing some of the [00:07:00] announce­ments that have been made. they report­ed a first. Cash earn­ings increase of 12%, half on half, was in line with expec­ta­tions. But flat year on year, rev­enue was up at $11 bil­lion, which is what, stag­ger­ing real­ly, , for an Aus­tralian com­pa­ny, I. That’s up 5%, half on half. and which includes a con­tri­bu­tion from Sun­corp, Bank. and also too, they high­light­ed that the acqui­si­tion of Sun­corp is start­ing to deliv­er cost syn­er­gy. So they think they’ve, they say they’ve saved $20 mil­lion to date from, amal­ga­mat­ing Sun­corp into ANZ. So we’ll see how that, That goes, that inter­est mar­gin in the group, which is some­thing we should fol­low.

With banks, it fell two basis points, half, one half to 1.56%, but still in 1.5 I think is pret­ty good for a bank. So it’s, it’s not to be of [00:08:00] con­cern. , What else can I say? com­mon. tier one or CET one ratio declined a lit­tle bit, but it’s still at 12%, which is, which is, still very strong for a bank.

And that’s obvi­ous­ly what, , APRA, focus­es on. And in fact, ANZ car­ries more cap­i­tal because that, got into trou­ble with the reg­u­la­tor last year or two years ago, actu­al­ly, over a bond trad­ing scan­dal, and they now have to car­ry an extra bil­lion dol­lars of, tier one cap­i­tal com­pared to some of the oth­er banks in Aus­tralia. they, have a lot of cap­i­tal, to bol­ster them if it’s ever a run on the bank. So that’s all good. does prob­a­bly hold them back a lit­tle bit in their return side of things, but, I’m hop­ing, I sus­pect with the new CEO com­ing in and, he’ll get some time to men rela­tions ships with the reg­u­la­tors and get in their good books and then, [00:09:00] that, cap­i­tal impulse might be tak­en off. yeah, that’s prob­a­bly all I can say. The only oth­er, arti­cle I saw about ANZ was talk­ing about that some of the senior execu­tors may leave, because there was two inter­nal can­di­dates that were over­looked for the role. So they, may stay, but they may look to become a CEO some­where else, either in the bank­ing sec­tor or even out­side it some­times. also too, Nuno Mat­tos may bring in some of his lieu­tenants from over­seas to, to bol­ster his direct reports with, with peo­ple he trusts, from past expe­ri­ence. So there might be some turnover in the senior ranks of ANZ going for­ward. So that’s ANZ, not a bad result. Noth­ing, ground­break­ing though.

I’m back on the buy list. the oth­er one I want­ed to focus on was super retail group. So anoth­er stock I own. I’ll declare that. they bounced back from their lows, since they put out this [00:10:00] quar­ter­ly updat­ing quar­ter three. And I also did it at, a con­fer­ence last week that Mac­quar­ie runs, which is gen­er­al­ly regard­ed as the start of con­fes­sion sea­son.

We’ve seen a few updates, to guid­ance. now we’re a month out from the end of the finan­cial year and a cou­ple of months out from report­ing sea­son man­age­ment will, um, if they’re start­ing to devi­ate from what ana­lysts think, come out and update the mar­ket. But the, detail from super retail group was good, or, at least, not too bad. They’re their, for sales are up 3.1%. So that’s, that’s always an impor­tant met­ric for a retail­er. And, super retail group owns four big, brands. Rebel Sports, super, auto Mac Pack, and BCF, the Camp­ing store. Um, Direc­tors com­ing in from the [00:11:00] UK deal with Accen­ture, which we spoke about pre­vi­ous­ly. And Bun­nings is also test­ing the waters on get­ting into the auto­mo­tive space, which would impact on Super Auto Group. But for the moment, both of those are doing okay. man­age­ment said that sales, that their sales in this com­pa­ny increased quite well dur­ing Covid because, there peo­ple were able to. Um, order online and get it sent home, and they’ve been able to recap­ture or, keep all of that sales, increase that mar­ket share increase after covid by, then invest­ing in their store net­work. a cou­ple of, strate­gies seem to be work­ing for them on the, auto side there. divest­ing or get­ting out of, small­er foot­print stores and con­cen­trat­ing on those with, at least a thou­sand square meters of floor space. And, in the Rebel sports, side of thing, they’re regen­er­at­ing their stores and bring­ing them up to be, [00:12:00] Up, up to date in terms of what’s best prac­tice around the world. uh, I think from mem­o­ry, if I look at the fig­ures, rebels Sports has 165 stores. Uh, sales were up 4.4%. super Auto, uh, was, I think rea­son­ably flat. BCF, the camp­ing, side of things was up 8.3%, so that was good. And then these fig­ures I’m giv­ing at it for the first 44 weeks of the year. So it’s still eight weeks to run, but, they’re pret­ty close to what they’ll be at year end. over­all group, like for like sales were up over 3%, which is good. and they’ve also, they also high­light­ed that they’ve invest­ed in a, auto­mat­ed ware­house, and. their com­peti­tors as their com­peti­tors into the mar­ket. So so it’s two com­pa­nies that, I’ve just called out there, [00:13:00] and announce­ments dur­ing con­fes­sion sea­son, but peo­ple might wan­na, keep their eye on the press and on their stock doc­tor alerts or equiv­a­lence for any oth­er announce­ments com­ing out in con­fes­sion sea­son over the next cou­ple of weeks.

Cameron: Ter­rif­ic. speak­ing of banks and com­pli­ance fail­ures, I want­ed to ask you about our old friends at Mac­quar­ie Bank. I saw an arti­cle in the Finan­cial Review, no, sor­ry. In the A, b, C last week, ASIC takes action against Mac­quar­ie Bank for sig­nif­i­cant com­pli­ance fail­ures. Mac­quar­ie Bank has been hit with addi­tion­al license con­di­tions after being slammed by the cor­po­rate reg­u­la­tor for mul­ti­ple and sig­nif­i­cant, com­pli­ance fail­ures.

Says the fail­ures relat­ed to Mac­quar­ie’s futures deal­ing and deriv­a­tives trad­ing divi­sions. Not­ing some went unde­tect­ed for many years in one case for a decade. So I was think­ing about this. I think they got fined, [00:14:00] just under $5 mil­lion for it. Just a gen­tle slap on the wrist. But I was think­ing about this in terms of our.

Recent intro­duc­tion of gov­er­nance, red flags. How do you feel about bank­ing com­pli­ance, fail­ures and gov­er­nance, red flags? Is this some­thing that we should be pay­ing atten­tion to, or is it not real­ly gonna have any sort of mate­r­i­al impact on them as an invest­ment?

TK: I think it’s how and how. all, of these APRA fines and under­tak­ings, enforce­able under­tak­ings are not good for banks, but they’re also, I think, of the land­scape for banks as well. So first thing to note is that Mac­quar­ie Bank is only a sub­sec­tion of Mac­quar­ie Group. Mac­quar­ie Group is much larg­er than Mac­quar­ie Bank, Obvi­ous­ly, as you said, a $5 mil­lion [00:15:00] fine in a, com­pa­ny that earns bil­lions is not gonna make a big dif­fer­ence. So I’m not too wor­ried about it. in this par­tic­u­lar case, it would­n’t be a, I would­n’t put the red flag on Mac­quar­ie Group because of this. they’ll tight­en up their pro­ce­dures. They’ll work with the reg­u­la­tor to have that ver­i­fied by. Some­one inde­pen­dent and then, they’ll move on. it’ll be a bit of a slow down on their bank­ing side for a lit­tle bit. But oth­er­wise, I don’t see it being a prob­lem and, not a re a rea­son not, it won’t be a rea­son not to invest. So you can go ahead and invest in Mac­quar­ie Bank. I think this, ANZ I just said has an enforce­able under­tak­ing with a, because of a bond trad­ing issue. lit­tle while ago, a MP had a big with the reg­u­la­tor. Bank of Queens­land has under­tak­ing with the reg­u­la­tors I think it’s fair to say that on the bank­ing side, a PR, which is the Aus­tralian pru­den­tial reg­u­la­tor, much bet­ter and much quick­er to act on banks and, [00:16:00] keep them on the straight and nar­row than ASIC is with. Oth­er com­pa­nies or with all the oth­er com­pa­nies asset, has a lot big­ger and a lot, has to mon­i­tor all 2000 com­pa­nies. APRA’s, look­ing at maybe a dozen, at least in the list­ed space and is on the ball with these things and tends nip them in the boat ear­ly. they, they’ve caught some­one doing some­thing wrong at Mac­quar­ie Bank.

I did­n’t quite under­stand what the issue was. It looked like some­one had done some trades. On some, deriv­a­tives that weren’t trad­ed on the A SX and then report­ed them incor­rect­ly to ara. it, it, may be noth­ing worse than the report­ing issue. Not that I’m try­ing to play it down. APRA thinks it’s impor­tant, so that’s fine. But this kind of thing does hap­pen with some fre­quen­cy in the bank­ing space.

Cameron: Okay, thanks. I just want­ed to men­tion HLS’ huge div­i­dend. a few peo­ple were talk­ing about this on our, Face­book page over [00:17:00] the last week. I’m sure you saw this, but, HLS, Helius,. Not to be con­fused with. Helia, HLI, they, dropped a mas­sive, div­i­dend, which isn’t, still, isn’t being report­ed in Stock Doc­tor, which is bizarre.

Stock Doc­tor does­n’t show any div­i­dend since, June of 22. I can’t fig­ure out why they’re not show­ing this one, but, I, if you go to the lat­est price sen­si­tive announce­ments in stock, doc­tor, you’ll see it ful­ly franked spe­cial div­i­dend of $300 mil­lion or 41.30 cents per ordi­nary share. Ful­ly franked.

 That’s, crazy. You ever seen, any­thing that big before Tony?

TK: I have. Yeah. So this has be, this has result­ed from this com­pa­ny, which is a, a, health com­pa­ny which runs patholo­gies and imag­ing. [00:18:00] com­pa­nies used to be called Pri­ma­ry Health­care. they sold off one of their busi­ness units and, they just returned of that, or most of that cap­i­tal back to the share­hold­ers of spe­cial div­i­dend. all the com­pa­nies have done it before. but this is the way of also of, unlock­ing any frank­ing cred­its they have, which would­n’t, would­n’t get used. So, this com­pa­ny’s paid tax in the past and not paid a div­i­dend for a cou­ple of years. So unused Frank­ing Cal cred­its sit­ting in their bal­ance sheet, and this is the way of giv­ing them back to their share­hold­ers as well.

So they’ve done one big div­i­dend and that’s, it’s. It’s actu­al­ly, quite large, on a sense per share basis, though I think it’s, 41 cents per share, but it’s also about 17 cents of frank­ing cred­its. I’ll just con­firm that. 17.70 cents of frank­ing cred­its and 41.3 of so it’s basi­cal­ly [00:19:00] 50 cents. If, if you can make use of the full use of the frank­ing cred­its, and that’s pret­ty, and the share price looks like it’s dropped from about a dol­lar 50 before it went. Its div­i­dend now trad­ing at a dol­lar or 11. So it’s dropped less than the 50 cents. So I think the trick will be once it goes, once it’s paid, whether the share price starts to recov­er, from, that.

So at the moment. It’s it’s trad­ing. If you look at the graph, it’s trad­ing below but if you add back the div­i­dend and the frank­ing cred­its. It’s back above its sell line. that add back usu­al­ly just lasts until we get pay­ment in our pock­ets of that, of the div­i­dend. it’ll be inter­est­ing to see whether, peo­ple, if the, share price recov­ers around the same time as the div­i­dend pays, my, my gut feel is it prob­a­bly won’t ’cause it’s a large amount.

But, and because the, under­ly­ing busi­ness does­n’t have that, busi­ness unit in it, it means it’s worth less going [00:20:00] for­ward. but I think it’s the case of just watch the space and, see what hap­pens when the div­i­dend arrives and what’s hap­pen­ing with the share price and, whether you wan­na, in it.

Cameron: Yeah, so I hold it in my super port­fo­lio. We hold it in a cou­ple of QAV port­fo­lios. I. And it’s down about 21% since I added it only back in April. as you say, the three point trend line sell price is a dol­lar 32, but when you add the div­i­dend back in and the frank­ing cred­its, it comes down to 73 cents.

And so the pay­ment date is only 10 days away, the 23rd of May, Keep an eye on it folks, for around about that date, and let’s see what hap­pens, whether or not we do need to offload it or not, if it comes back up below those line, above those lines or not,

TK: I just add to that com­ment cam, that we should be a lit­tle bit patient because I. [00:21:00] not like there’s a switch that gets flicked when the div­i­dend gets paid and received. Peo­ple are now decid­ing what the com­pa­ny’s worth after the of the, of the busi­ness unit they’ve sold. price is up a cou­ple of per­cent today. It might start increas­ing again. I think if it’s on an upward trend, not that far below the sell prices it’s cur­rent­ly drawn. So if it’s on an upward trend towards that, if it was me stock, but if it was, I’d be a if can. After.

Cameron: Yeah, we’ll give it a bit of grace. All right. speak­ing of Grace, CTT is a stock that’s on our buy list this week. I don’t think we’ve talked about them before. I was­n’t aware of them before. It’s a com­pa­ny called Cettire. I’m not exact­ly sure how they pro­nounce that, but they’re a drop ship­ping com­pa­ny. Float­ed on the A SX.

[00:22:00] you remem­ber that my son Tay­lor got his busi­ness start­ed drop ship­ping back in the Covid days when he and a mate of his were drop ship­ping jig­saw puz­zles. I think you were their first cus­tomer or one of their first cus­tomers any­way. This com­pa­ny is, very inter­est­ing and I was look­ing into it ’cause I was look­ing at adding it as an option for the light port­fo­lios, but the finan­cial review report­ed in Sep­tem­ber, 2024.

But the end of Mr Mintz’s acqui­si­tion spree, Mr Mintz’s the, founder, CEO, I think Mr Mintz’s acqui­si­tion spree pushed Cettire shares 12% low­er on Wednes­day, cap­ping a week long roller­coast­er ride for investors that began with a 20% fall when the com­pa­ny released unau­dit­ed accounts on August 29th. The shares rebound­ed 50% over Mon­day and Tues­day.

And [00:23:00] then, it says the lat­er on, Cettire has fall­en to its first loss. This is April this year, its first loss. In three years after the online cloth­ing retail­er was forced to increase dis­counts as shop­pers shunned lux­u­ry goods. A year ago, the com­pa­ny shares were worth 2 bil­lion. They are now val­ued at 190 mil­lion.

so I was, when I first read that quote about unau­dit­ed accounts, ’cause I was doing this late at night. I thought it was, a gov­er­nance red flag audit and, sor­ry, a, red flag audit, an audit red flag, but reread­ing it now, I just think it was unau­dit­ed because I checked their FY 24 report and they seem to have been signed off.

So I think they’re all clean from an audit per­spec­tive, but, It seems like they’re, strug­gling a lit­tle bit busi­ness-wise, but they are on the buy list. Have you, heard of these guys before ever come across your radar? Tony? I don’t think they’re that big or that old, so I’m [00:24:00] guess­ing not.

TK: Very much they have. I’ve nev­er owned them ’cause they’ve been a growth stock. And this is a clas­sic exam­ple of what hap­pens to some growth stocks. It’s dropped from $2 bil­lion mar­ket cap to. but it is on the buy list. it’s a, it’s an inter­est­ing com­pa­ny, and it has a check­ered past, so sure if it was an a FR jour­nal­ist, but the A FR pub­lished a lot of analy­sis into the com­pa­ny they ques­tioned whether the com­pa­ny was charg­ing the cor­rect amount of sales tax on goods shipped to the us then they joined some dots and won­dered whether the. Dis­crep­an­cy in the sales tax that should have been paid equat­ed to the prof­it that CTT was mak­ing. I, can’t com­ment on that. but, the com­pa­ny came out and denied it and said they were charg­ing the appro­pri­ate sales tax. but they did also down­grade prof­it around that same time too. they’d been hit not just from, any issues with sales tax, but they’ve been [00:25:00] hit with, changes to what I think is called the de min­imus rule in the us.

Up until recent­ly, any inbound goods worth less than, I think it was $800 us, did­n’t have to pay. the appro­pri­ate, the tax­es on things that. Came through at a high­er rate. and it was done so that, books from Ama­zon, et cetera, if they came from over­seas, did­n’t, have their val­ue, dou­ble or triple with var­i­ous tax­es that come into play. that’s now changed. So any par­cel gets all the tax­es. And so satire has been hit by that rule change, but also they’re of course, now exposed to US tar­iffs because their busi­ness mod­el is to source high-end brand. And fash­ion wear and par­tic­u­lar­ly, acces­sories like hand­bags, belts, and, shoes, from the peo­ple who sup­ply brand­ed [00:26:00] retails.

and either buy ’em from the fac­to­ries direct or there’s a thing called the Gray Mar­ket, which is sprung up in the fash­ion indus­try. um, there are a lot of peo­ple who have some­how got their hands on. The mer­chan­dise that goes into, say, the Her­mes fac­to­ry, and they’ve made a Her­mes look­ing bag.

It’s not, it’s, some of, it’s not even a knock­off, it actu­al­ly is a, Her­mes bag, but they’ve got, they’ve got­ten through loop­holes or what­ev­er, or sales agree­ments, the abil­i­ty to sell it at a much low­er price. And satire have been sourc­ing all these, some­times they’re just the mom and pop shop in Italy, exam­ple, and then they, they do drop ship from them to us cus­tomers.

And so that’s their busi­ness mod­el, which is quite clever. But, as high-end brands have had. Sales declines is the cost of liv­ing and infla­tion has affect­ed the retail wal­let spend. they’ve dropped their prices, which has also hurt the oth­er end of the mar­ket. And, even though I thought I, [00:27:00] I would’ve thought they may have ben­e­fit­ed from, cost of liv­ing increas­es, but it looks like they haven’t. so it’s an inter­est­ing com­pa­ny. it looks like it’s been mak­ing the best out of a few loop­holes, which may have been shut on them, which is per­haps why they are where they’re now. But it does­n’t mean that they can’t make mon­ey going for­ward and it’s not a good time to buy. I won­der if this is a can­di­date for pulled pork at some stage in the future.

Can.

Cameron: Oh, okay. Inter­est­ing. Yeah, I just look­ing at their web­site and I, because I’m. Not real­ly in the high fash­ion space, Tony. None of these brands real­ly, con­nect with me. But, I would­n’t say this is cheap, stuff though either I’m look­ing at, very expen­sive stuff here.

TK: yeah, but have you com­pared it to the price of buy­ing it from the actu­al retail out­let?

Cameron: No, but I’m look­ing at Adi­das shoes. They’re, they say they’re marked down from $309 to [00:28:00] $228, but 220 bucks for a pair of, I’ve, I have bought, Adi­das shoes in the past. I do Adi­das sneak­ers 220 bucks cents about rea­son­able for a, pair of Adi­das shoes, new bal­ance shoes down from $505 to $366.

Oh my god. They’re just shoes. Any­way, alright, maybe you’ll, do a pulled pork on those at some point,

TK: I did­n’t think that was their core busi­ness. I thought their core busi­ness was buy­ing Her­mes bags down from 10,000 to $1,000.

Cameron: they do have lots of bags and acces­sories and stuff here, but again, Al Wal­let zipped Clutch bag $171. Maybe I should be, oh, Chris­sy’s got that bag. Max Mara. There you go. I rec­og­nize that bag. Oh, I dun­no. Yeah. All right. but just with them on the buy list, you’re not scared off by any of this.

You think if it’s on the buy list, then they’re prob­a­bly worth a look.

TK: I think so. Yes. [00:29:00] yes. think peo­ple should do some research. There’s. If you have an A FR sub­scrip­tion, I think it was also pub­lished in the age, per­haps you can prob­a­bly find it on Google. read that about, what these jour­nal­ists found out about Sales tax and Sap­phire, and that was real­ly the cat­a­lyst for their decreas­ing share price Since then, notwith­stand­ing the facts of the rule changes around, de Mini. and US tar­iffs com­ing in. But, you know, it, it’s the, it may well find its price, now and start to increase from here if they can make a.

Cameron: Okay. that’s all I’ve got in terms of news for the week. I do have one ques­tion from Scott. Do you have any­thing else?

TK: I’m just gonna do a pulled on a request, which was Ooh Media, but you go ahead with a ques­tion

Cameron: Okay, so this is from. Scott, he says, I can’t remem­ber the share. It was on the buy list though, but its close Price was a dol­lar 58 at the end of the day when it was [00:30:00] trad­ing at a dol­lar 54 for most of the day, I checked it out and there was one share sold at a dol­lar 58 right on the bell. Is that weird or am I just being para­noid?

I think we have talked about these sorts of things in the past, but I can’t remem­ber what the sto­ry was.

TK: Find­ing more and more, with, com­pa­nies, par­tic­u­lar­ly those which, are close to. and I’ve seen it live, in on trad­ing plat­forms where some­one seems to. a share trans­ac­tion for one share or for, yeah, or to buy 1 cents worth of shares. Usu­al­ly it’s for one share, and it’s in the last 20 min­utes of trade.

So it becomes, if, noth­ing trades in that 20 min­utes, it becomes the clos­ing price for the stock, and it makes it look like it’s, closed, know, some­times five or 10% cheap­er than, than what the bulk of the trad­ing [00:31:00] was at for that day. And, if some­one’s trad­ing using stock loss­es like we are, it can trig­ger them. I sus­pect that some­one’s flood­ing the mar­ket with these, or, being a bit more sur­gi­cal per­haps, and, try­ing to trig­ger peo­ple’s stop-loss­es. Not that I’m say­ing some­one’s out there with a point trend line cal­cu­la­tor look­ing at us, ours, but they’re prob­a­bly pick­ing on stocks which they think might trig­ger stop-loss­es in oth­er ways, or mov­ing aver­ages or some­thing like that. to get the share price down, and I think they’re gonna then ben­e­fit from. some­one sells a block and they can buy it cheap­er and then sell it pret­ty quick­ly back at, for even a cou­ple of per­cent, prof­it. If you do that enough times, you make a lot of mon­ey. So of things. If you are trad­ing on a plat­form that can see that spot, then before you trade, make sure that you, the price isn’t being, or the clos­ing price isn’t being set by a set, by a one trade offer to, to buy or [00:32:00] by one a one trade at a low price. if you don’t have access to that, and I’m, I have done a bit of research and can’t find. How to get the depth of vol­ume for the, last trade unless you have, a CMC account or a, uh, CBA com­sec trad­ing account or some­thing like that where you can see mar­ket depth. so either check it before you trade, or What I’m doing is I’m not trad­ing based on that, the clos­ing trade price of the night before.

I’m wait­ing an. How it opens and how it trades the fol­low­ing day because, obvi­ous­ly dur­ing the day it gets lots of vol­umes in the trades. ’cause most of the stocks that I hold with a high id, high a DT, but even if it’s a low a DT trade, it’s gonna be more than one stock trad­ed dur­ing the day.

So see what the price is like dur­ing the day. But yeah, some­one’s out there gam­ing the sys­tem by putting these one trade. [00:33:00] their offers on before, just before the mar­ket shuts and there­fore depress­ing the clos­ing price. uh, it’s a good ques­tion, Scott, and some­thing to be care­ful of.

Cameron: So I under­stand the the­o­ry behind drop­ping the price. Why would you put the price up at the end of trad­ing?

TK: I dun­no, is that, what’s, Scott? Is that what Scot­t’s say­ing? Is the price going up? I thought it was, what my expe­ri­ence, it’s it’s some­one putting one trade on for a sub­stan­tial dis­count to the past, the pre pri­or trades that day. And so it looks like the shares closed at, a dis­count to what it trad­ed at the day before.

Cameron: Now, he said it was trad­ing at a dol­lar 54 for most of the day, and then it went up to a dol­lar 58 right on the bell with one share being sold at a dol­lar 58.

TK: Okay, I, that’s some­one above. Cre­at­ing a momen­tum trade, which isn’t real­ly there.

Cameron: Fas­ci­nat­ing. And I [00:34:00] guess there’s real­ly noth­ing, there’s noth­ing ille­gal about that. They’re just try­ing to game the sys­tem, but legal­ly,

TK: No, noth­ing ille­gal about it at all. Yes, that’s right. Noth­ing ille­gal about it at all. The clas­sic one was when I think AMP list­ed some­one put a, I think it list­ed $20 and some­one, put a trade in for one share at, $40 and was able to cap­ture all the, that trade from all the vol­ume that was going through quick­ly at list­ing.

So it hap­pens.

Cameron: All right. Scott has a sec­ond ques­tion. You’ve men­tioned that around 20 to 25 stocks is about the max­i­mum you should hold for the port­fo­lio. I have also just about become ful­ly invest­ed with all. The resid­ual cash from our SMSF rollover and hold 23 stocks as there will be income com­ing in via super guar­an­tee pay­ments and rental income from the invest­ment prop­er­ty.

What is the strat­e­gy in this sit­u­a­tion? Do I just stock­pile the cash in A‑H-I-S‑A and wait for stocks to reach their three point trend line or [00:35:00] comm sell, or do you add to cur­rent stock posi­tions if they are still on the buy list and above their buy­line?

TK: so there’s no hard and fast roll rule on port­fo­lio size. That’s the first thing to say. But the big­ger the port­fo­lio is, the more index like your returns will be become just sta­tis­ti­cal­ly, if you hold more stocks, they start to mim­ic the index, which is a large amount of stocks. um, I’ve always said to hold 15 to 20 stocks, at least for the. and that’s cer­tain­ly what the research bears out, but it does­n’t mean that Scott needs to go out and sell five stocks straight away. he could do it over time and like­wise, if he’s get­ting more cash in, um, he, yes, he could park it and wait for some­thing to buy, but he could also increase the posi­tions he holds on cur­rent stocks, which are still on the buy list and, a buy on the three point trend line side of things.

So if I was in Scot­t’s posi­tion and I’ve been in that posi­tion [00:36:00] before. yes, I would sim­ply, if I have spare cash and I, I don’t want to increase the num­ber of shares in the port­fo­lio, then I’d buy extra posi­tions in the ones I hold, which, I buys. And if I sold some­thing, in, in the port­fo­lio. I may not, I may do the same thing. I may not rebuy that posi­tion. I might put it into stocks I already hold, which are, buy­ers on the buy list. So he’s over time con­cen­trat­ing the port­fo­lio back, 15 and 20 stocks, which I think is rea­son­able. I.

Cameron: All right. Thank you Tony. Hope that helps. Scott, what are you doing for a Paul Pork today?

TK: I’m doing Ooh Media which was a request. It may have been from Scott. I’m not sure. It was a request from last week. and I’ve got­ta say quite a good request because, the stock is up. Quite, strong­ly. It’s been on the by list for a while. it’s def­i­nite­ly above its byline. PO just post­ed some, or post­ed results, I should­n’t say just [00:37:00] post­ed results, post­ed results.

I think it may have come out with some guid­ance recent­ly, but it’s, it seems to be doing okay. it’s also, just. I just, announced in the last cou­ple of weeks that the CEO is retir­ing, or at least resign­ing. So Kathy O’Con­nor, she’s stay­ing on until the sec­ond half of the year, until they can, find a replace­ment through a recruit­ing process. She’s been there four years, includ­ing Covid, which are four tough years. she’s decid­ed she’s had enough. don’t think there’s any­thing nec­es­sar­i­ly wrong with the CEO resign­ing four years. An aver­age sort of term. she seems to have right­ed the ship post Covid. This com­pa­ny had down­turn dur­ing Covid.

It’s a, it’s an out­door media com­pa­ny, so I think bill­boards and elec­tron­ic dig­i­tal sig­nages as well. dur­ing covid with no traf­fic and no one out there, they could­n’t charge as much for the [00:38:00] bill­boards. And, adver­tis­ing dropped off, quite a lot dur­ing Covid, but they’re back up to where they were before that. I should say the com­pa­ny is called Omed, OOH Media. And OOH stands for out of home media. where that comes from. they have, over time gone away, oh, sor­ry, I should­n’t say gone away. Includ­ed oth­er areas besides just, bill­boards, on the roads and on free­ways. They now have, sig­nage in, for exam­ple, retail shop­ping cen­ters and malls, rail­way sta­tions, air­ports, office tow­ers and uni­ver­si­ties.

So they claim a 99% metro reach of all peo­ple. over, I think it’s a month peri­od, or maybe a week peri­od. get to see one of their bill­boards or one of their signs and, quite clev­er­ly. They state on their web­site that out-of-home adver­tis­ing [00:39:00] can­not be blocked, paused, or skipped. So it’s not a bad mar­ket­ing job of, for their indus­try from a mar­ket­ing com­pa­ny. they have over 35,000 assets. So 35,000 sig­nages Aus­tralia and New Zealand. and they claim to be the, largest. Adver­tis­ing com­pa­ny in Aus­tralia and New Zealand. they’re quite, they’re the mar­ket leader quite large. I think the oth­er thing which is inter­est­ing, and this is one of the tail­winds for them, is that, out of home adver­tis­ing now equates to 15% of the media spend in Aus­tralia, and is a grow­ing seg­ment ver­sus the spend on radio and tv, which are both in decline.

they seem to be a lot more resilient and grow­ing, in the media space than, their tra­di­tion­al media assets. hav­ing said that, their lat­est results were a lit­tle bit flat, so the year on year rev­enue was flat. [00:40:00] but what they did high­light was it was increas­ing in the sec­ond half. So first half was down, sec­ond half was up, was up some 4% annu­al earn­ings per share were up 9%.

So they’ve been restruc­tur­ing their busi­ness, sign­ing up, more prof­itable con­tracts. doing a lot of dig­i­tal adver­tis­ing. so a lot of mar­gin enhance­ment, but rev­enue was flat, but trend­ing upwards. Um, been around for a while. So the com­pa­ny was found­ed by Bren­dan Cook. I. 1989 and he called it the Out­door Net­work Aus­tralia back then in, I think it spent some time in the hands of pri­vate equi­ty, then they list­ed the com­pa­ny in 2002, and back then it was called Net­work Lim­it­ed, then it was rebrand­ed as Zoo Media fol­low­ing that. along the way they soaked up a few media com­pa­nies, includ­ing Media Puz­zle and Junkie Media. acquired [00:41:00] EYE Corp. I corp from Chan­nel 10, was a divi­sion of Chan­nel 10, which was doing out­door adver­tis­ing, and they did also attempt to acquire their largest com­peti­tor, a PN. But, did­n’t pro­ceed fol­low­ing AC CC com­pe­ti­tion con­cerns, but they did in 2018 pur­chase anoth­er com­peti­tor called Ad Shell from a com­pa­ny that’s now called here, there and Every­where. claim top spot in the out­door adver­tis­ing, busi­ness in Aus­tralia and New Zealand. So that’s the busi­ness. I’m sure every­one has seen their sig­nage, maybe not know­ing it’s, Oh hs. But if you can often see the name of the provider at the bot­tom of the bill­board, so check it out. Uh, QAB num­bers a DT for the stock is 1.95 mil­lion per day.

So it’s a price will be liq­uid stock, which should suit all the peo­ple. price for the analy­sis of the dol­lar 65, [00:42:00] 97%, or a dol­lar 65 is 97% of con­sen­sus Tar­get. It is greater than IV one of 95 cents an iv two of a dol­lar 26. How­ev­er, it is below, not below book price of a dol­lar 38, but below book plus 30, which is a dol­lar 80. So we can buy it for book less than book plus 30. How­ev­er, I do high­light this is one of these com­pa­nies with lots of good­will as an asset on the bal­ance sheet. the NTA net tan­gi­ble assets for this com­pa­ny is only 22 cents. We can buy it for less than plus 30, but it is, includ­ing a lot of good­will, which we see this com­pa­ny rolled up and acquired lots of, out­door com­pa­nies and media com­pa­nies to cre­ate con­tent for the bill­boards.

And so they’re car­ry­ing good­will. yield is 3.18%. So it does­n’t score, enough for us, but it’s a rea­son­ably healthy yield stock. Doc­tor [00:43:00] finan­cial health and trend is strong and steady. Stock edia don’t rank it as well for qual­i­ty. Their rank­ing is only 68, which is okay, but not, up in the nineties, their F score is six out of nine. an over­all Wikipedia ranked as, a 91 out of a hun­dred. it’s over­all it’s in their top 10, in their rank­ings, top, top 10% in their rank­ings, so that’s good. com­pa­ny cur­rent­ly does­n’t have an own­er founder. That founder, Bren­dan Cook, stayed around for a long time, but he exit­ed. five or so years ago, I think.

So he’s not there at the moment and it does­n’t have, any oth­er large, large own­er or own­er­ship, amongst the direc­tors. p is 24 times, even though that’s a lot, it’s not the high­est nor the low­est, so he can’t score it. , Even though PE is 24 times prop cap is only 4.9 [00:44:00] times, so less than five times cash­flow, which is, a good, a good buy­ing oppor­tu­ni­ty. Fore­cast. Earn­ings per share growth is 91%. So that was inter­est­ing, I thought. And that of course allows us to score it well for growth over pe, which comes out at 3.76, above our. Our, hur­dle of 1.5 before we score it. , It’s in a recent uptrend since its last results. Of course, we’re into May now, and so we’ll get new results, in a cou­ple of months.

So that may change, but, since it’s most recent results last year, or which came out in Feb­ru­ary, it’s it’s turned upwards. So we score it for that. the equi­ty isn’t con­sis­tent­ly increas­ing, so we can’t score it for that. So all in all, qual­i­ty score of 11 out­ta 15 or 73% and a QAV score of 0.15. So that’s edia risks.

I think it’s a fair­ly, it seems to me to [00:45:00] be a fair­ly steadi­ly grow­ing com­pa­ny. So that’s, I should say that from the out­side out­set. tend­ing. It looks like rev­enue’s grow­ing at about the rate of GDP or infla­tion, so about the rate of the econ­o­my. that’s good. to be grow­ing by acqui­si­tion.

Now, whether it can keep doing that at the same rate it’s done in the past because it’s now the num­ber one play­er, and so it will face com­pe­ti­tion issues more and more as it, if it tries to do it. So s. Mar­ket is call­ing out near­ly dou­bling an eep E Ps, so it’s gonna cer­tain­ly grow next year.

Whether it’s dou­bling or less than that, it’s prob­a­bly gonna be some­thing. the CEO tran­si­tion I think is a risk. Not just the fact that the CEO’s leav­ing, which is quite nor­mal. But often­times with, as we’ve seen before with com­pa­nies, if some­one new comes in, they may take a large num­ber of write­downs to clear the decks, and [00:46:00] rebase their options, or at least just clear the decks to make them­selves look going for­ward. So that’s poten­tial risk. The out­door adver­tis­ing sec­tor is grow­ing and it’s get­ting more dig­i­tized. So that, I think helps both rev­enue and mar­gin for them. I’ve always liked this com­pa­ny. It did strug­gle dur­ing Covid, and it’s, back on the buy list now and doing well. yeah, have a look, peo­ple.

Cameron: I, I always cringe when I see OML on the buy list ’cause I think I’ve bought it a dozen times over the years and always had to sell it. It’s always end­ed up as a rule one sell and a three PTLA cou­ple of times. But, look­ing back over the. Price. I’ve sold it at, I’ve sold it as down at a dol­lar 14 up through dol­lar 26, dol­lar 36.

Now it’s at a dol­lar 60, I think today. it has recov­ered from the times when I’ve sold [00:47:00] it. But it’s one of those things that in my brain, it has a neg­a­tive asso­ci­a­tion with being a lit­tle bit, tur­bu­lent. And if I look at its chart and the bread lat­er, it has been. Drop­ping down for the last year, but it’s just rebound­ed mas­sive­ly.

So there you go. Good luck to any­one who kept hold­ing it. That’s it, Tony, apart from after hours, that’s all I’ve got for today. and I know we’re on a bud­get­ed time­frame, but we skipped after hours last week. You got any high­lights for me this week?

TK: high­lights from my life, high­lights from my wife. I’ve got, I was up in Syd­ney on Thurs­day night at the chair­man’s Chair­man. Pret­ty ritzy affair. and, sold one horse and kept one horse. So Pfic sold, she’ll, she’s often New Zealand, but, cast did­n’t make reserves, so we’re just decid­ing, crunch­ing some num­bers and decid­ing whether to keep her and breed from her or [00:48:00] try and move her on. in some oth­er way besides, besides a, a sale. so that was, Syd­ney, which was love­ly. And then now we’re down in Bate­man’s Bay play­ing, lots of golf and enjoy­ing a bit of a break, which has just been fan­tas­tic. It’s a love­ly place despite the poor wifi.

Cameron: No, that’s great. You watched any­thing or read any­thing good. Lis­tened to any­thing good.

TK: At all? No, been in the moment, haven’t had time to read or to watch tv. Just been, play­ing golf, dri­ving, walk­ing around and chat­ting with Rud­dy and his broth­er-in-law, which has been

fan­tas­tic.

Cameron: That’s nice. I saw my GP this morn­ing for my, annu­al blood work check­up, and he’s agreed to that I could stop tak­ing near­ly all of my meds that I’ve been on for the last five or six years. When I had ele­vat­ed cho­les­terol and ele­vat­ed blood pres­sure. He said, every­thing’s [00:49:00] look­ing good. I’m gonna stay on a statin, but we’re reduc­ing it.

Down to half my cur­rent dosage, but tak­ing me off the aspirin and off the blood pres­sure med­ica­tion because of my lifestyle changes over the last few years. So that’s good. I’m hap­py about that. I want to give a plug for a book that I’ve been read­ing.

If you haven’t already read it. Have you heard of the book? Nina Simone’s Gum. it’s great. It’s by War­ren Ellis, Nick Cave’s, vio­lin­ist for decades, the Bad Seeds. dirty Three Guy.

ter­rif­ic book, large­ly about. Him steal­ing Nina Simone’s gum off a piano at a con­cert that she did in 1999 that Nick curat­ed in Lon­don. And, the reli­gious, impor­tance of Nina Simone’s gum.

That he, that Nick was late, 20 odd years lat­er, Nick was curat­ing some [00:50:00] exhi­bi­tion some­where in, I don’t know, Hol­land or some­where like that, Ams­ter­dam. And they put this on dis­play on a plinth. With a spot­light and a vel­vet cush­ion any­way. But it’s also a sto­ry about him as the vio­lin­ist and the bad seeds and the dirty three and how he end­ed up be play­ing vio­lin.

But it’s a ter­rif­ic real­ly engag­ing ra read that I think you’d real­ly enjoy. I, what have I lis­tened to? Oh, for peo­ple who like, girl rock and roll, and I’ve been meet­ing to, chat to Alex about this. I think they’re out­ta Can­ber­ra. There’s an Aus­tralian all girl band called Teen Jesus and the Jean teasers that I’ve just dis­cov­ered via, triple J, which I’m real­ly enjoy­ing at the moment.

So check them out if you like. girl. Girl punk, teen Jesus, and the Jean teasers. It’s a ter­rif­ic name if noth­ing else. And, [00:51:00]

TK: It.

Cameron: in terms of watch­ing stuff, the high­light for me for the week is David Lee Roth came out of retire­ment. He’s did his first live show in I think five years. And it was fan­tas­tic.

The whole thing’s on YouTube, if for any, old David Lee Roth fans out there, his voice, sur­pris­ing­ly enough, is in pret­ty good shape. He’s obvi­ous­ly done a lot of work on it because I think he got kicked off of a KISS tour a cou­ple of years ago. ’cause Gene Sim­mons said that. Dave could­n’t sing any­more.

His voice had, was­n’t up to the task, but he’s back. His voice was great. He has a stripped down band, great band, and they just did all old clas­sic Van Halen num­bers and it was ter­rif­ic to see Dave going strong, near­ly 70 years old and going hard on stage. It was like he was dressed all in leather. And it was stripped back.

So it was like Elvis’s 68 [00:52:00] come­back on NBC, but it was Dave. And so he’s back on tour, which was great.

TK: I did see that And I’m sor­ry, I should have men­tioned it because the leather he was, a leather three.

Cameron: yes. Yeah. It was pret­ty, pret­ty much a leather three piece suit. Yeah. So it was, very elvisy. Have you seen the Jok­er sequel, jok­er Fol­ly?

TK: I haven’t, no, I think you told me not to watch it, or your boys told me not to watch it.

Cameron: The boys told me not to watch it. I, it is on the stream­ing ser­vices now. I watched it, want­ed to like it, it did­n’t work. I did­n’t think, like whack in Phoenix still did a great job as the Jok­er, but just the, sto­ry, the songs fell a bit flat, so that was dis­ap­point­ing. But I have been watch­ing The Pen­guin final­ly and absolute­ly lov­ing.

The pen­guin like Col­in Far­rell. Oh my god. So great.

TK: Yep. I must admit I

haven’t got to the end of [00:53:00] it. I enjoyed the first half of it. Now it got a bit sil­ly and I haven’t watched the end of it, but, real­ly enjoyed the first bit.

Cameron: Oh, I’m only a few episodes in, I may not have got­ten up to the sil­ly bit yet. Any­way, so that’s what I’ve been doing. That and a lot of kung fu as usu­al.

TK: con­grat­u­la­tions on your health turn­around. That’s amaz­ing. I know you put lots of work and effort into it,

Cameron: Yeah. Thanks. I appre­ci­ate it. It, was good. And as the GP said, most guys in their ear­ly fifties when they need to be put on these things, don’t do the things that they need to do to turn it around. And I’ve worked very hard to, Get my health in shape and it’s hope­ful­ly pay­ing div­i­dends.

So I’m gonna go off the meds most­ly for a year, and then we’ll do the blood work again and see if it, all the num­bers still look good a year from now, and if not, I can always go back on them. But it’s a new lifestyle now that I’m fair­ly. estab­lished in. So new diet, new exer­cise, new phone.

[00:54:00] Who dis as Chris­sy always says to me. Alright, that’s the, QAV Aus­tralia show for this week. Thank you tk. Thank you Scott for the ques­tions. Thank you lis­ten­ers, and we’ll be back next week. Stay safe out there. Q qua, have a good week.

TK: Thank you, my wife. I will improve next Tues­day when I’m back at Cape Shank. So sor­ry about this. We’ll get video back online and please send some more requests in for pulled Porks, think, Cettire is a can­di­date, I think ANZ results out. that’s a can­di­date. But if any­one’s got some­thing else they want­ed, me to talk about, please, ask a ques­tion. Cheers every­one.

[00:55:00] [00:56:00]