QAV AU 830 — Bhagwan Kynaston

QAV AU 830 Audio

[00:00:00]

Cameron: Wel­come back to QAV Aus­tralia, TK, episode 8 3 0. It is the 29th of July, 2025. How things at Cape Schanck tk.

Tony Kynas­ton: Very good. The sun’s out. So I’ve just been for a walk, which is love­ly, and got sweaty in win­ter, which is amaz­ing. Um, sweaty. Sweaty, yeah. Peach, sweaty,

Cameron: 20 balls.

Tony Kynas­ton: my favorite car­toons or, or clips, sor­ry. NPR,

Cameron: skit? Yes. Mm-hmm.

Tony Kynas­ton: of course, set­ting up NPR, which is the start of the New South Park sea­son one episode, which is storm­ing the world.

Cameron: I haven’t seen it yet. I’ve seen clips, but

Tony Kynas­ton: Yeah, Jen­ny and

Cameron: yeah.

Tony Kynas­ton: night and just Jen­ny Jen­ny’s jaw dropped, could­n’t [00:01:00] believe it. And I just pissed myself laugh­ing from start to fin­ish.

Cameron: This is the one where they went after Para­mount.

Tony Kynas­ton: yeah. So the back­sto­ry is so, you know that they famous­ly half their stream­ing rights ’cause they hap­pened to sign a deal, just before stream­ing went big. And so, um, I think it was a 10 year deal, it’s come up for a renew­al this year. And then Para­mount bought what­ev­er was doing.

South Park orig­i­nal­ly the new deal, which was only for five years. Uh, but basi­cal­ly the upshot is, um, Park is gonna make two and a half bil­lion dol­lars in stream­ing rev­enue over the next five years. And Matt and Trey get half of that. the day after they sign bil­lion dol­lar deal with Para­mount. They released episode one of the new sea­son called Ser­mon on the Mount, as in ser­mon about Para­mount, [00:02:00] and it is just wall to wall, hilar­i­ous wall to wall, Trump with a small penis, wall to wall, Christ com­ing down from on high and giv­ing a ser­mon, ser­mon to the peo­ple in South Park who were suing Trump for bring­ing reli­gion into their schools. And Jesus is going, dude, dude, shut up. He’ll just get worse. Keep qui­et.

Cameron: I, I heard that. I read that the episode came out hours. After they signed the deal,

Tony Kynas­ton: Trump’s Trump’s, uh, like there’s a por­trait painter of a naked Trump with a small penis. jumps into bed with Satan with a small penis. they do a live action AI take down of Trump and a desert naked with his small penis talk­ing. It’s just com­plete par­o­dy the whole way through.

Cameron: but I, I believe that they also ref­er­enced the Col­bert, um, ter­mi­na­tion of the late show announce­ment in it. [00:03:00] But the, I mean, the whole thing, uh, was put togeth­er in days, as I under­stand it, the first episode, like they can write a script, have it ani­mat­ed and edit­ed and on. Air or online now, with­in days.

That’s how their pro­duc­tion process is.

Tony Kynas­ton: com­put­er gen­er­at­ed. It’s just basi­cal­ly stop motion clips of, you know, the whole top half of the face moves when they talk, that kind of thing. So it’s pret­ty easy to do.

Cameron: Yeah.

Tony Kynas­ton: before and then they take four or five days to make it.

So, yeah. But appar­ent­ly, um, the, his, the sto­ry is they were spent four days in the lock­er room with their lawyers try­ing to get the whole Trump penis thing through. And even­tu­al­ly lawyers agreed that if they put two eyes on the penis and made a talk­ing char­ac­ter, it was okay. It was­n’t actu­al­ly a penis. Any­way, I,

Cameron: Well, good stuff.

Tony Kynas­ton: but it’s, it’s so top­i­cal and hilar­i­ous. But it

Cameron: Well,

Tony Kynas­ton: ’cause [00:04:00] Kaman gets

Cameron: uh.

Tony Kynas­ton: favorite show is NPR. he gets, he gets up does, he likes it, not because he is. You know, lib­er­al, like most NPR lis­ten­ers are, he thinks it’s the fun­ni­est show on, on the air. And of course, Trump’s can­celed fund­ing for N‑P-R-N-P‑R, so it’s off the air and he gets real­ly upset that he can’t lis­ten to Mex­i­can rap­pers talk­ing about les­bians and women

Cameron: Right.

Tony Kynas­ton: On, on the air.

Cameron: He finds it fun­ny. Yeah, right. Well, speak­ing of fun­ny, he says try­ing to get back to invest­ing. Uh, mar­ket had a good week.

Tony Kynas­ton: like

Cameron: I know, right?

Tony Kynas­ton: to get back to my, I know.

Cameron: I know. Mar­ket, uh, had a rel­a­tive­ly good week. Uh, has­n’t, uh, had a good last cou­ple of days. Did pick up a bit yes­ter­day, but the news today has made the mar­ket tank a lit­tle bit this morn­ing.

Your, uh, [00:05:00] your favorite pres­i­dent Don­ald Trump has revealed base­line tar­iffs for coun­tries such as Aus­tralia, could be almost twice what he orig­i­nal­ly claimed. The dive comes as Trump told reporters he could hike the base­line tar­iff from 10% to either 15 or 20%. We’re gonna be set­ting a tar­iff for essen­tial­ly the rest of the world.

The US pres­i­dent said just to, I mean, get them to talk about some­thing else oth­er than Jef­frey Epstein

Tony Kynas­ton: Yeah. Oh well we’re play­ing it part of the rest of the world, not Aus­tralia. It’s the rest of the world. Yeah.

Cameron: So, the mar­ket’s down a bit today, but it was at, uh, all time highs last week. As we said. Gen­er­al­ly speak­ing, the mar­ket’s been doing pret­ty well. Our port­fo­lios have been doing pret­ty well.

Tony Kynas­ton: And of course

Cameron: You had

Tony Kynas­ton: mar­ket, we’re talk­ing about Com­mon­wealth Bank real­ly at the moment.

Cameron: real­ly.

Tony Kynas­ton: ’ cause it takes up, it’s attract­ing all the pas­sive flows. It takes up [00:06:00] I would­n’t say it’s the Mabb, it’s not meant by any means the major­i­ty of the index, but it’s a large part of the index and it’s down some five odd per­cent, maybe more after today peo­ple real­ize they can’t keep pay­ing through the nose for a, what’s essen­tial­ly a soci­ety, and so it’s, they’ve been tak­ing prof­its, so that’s also behind it as well when we talk about the mar­ket being down.

Cameron: Well, in the last 30 days, the dum­my port­fo­lio is up 5.3% ver­sus the index up 1.9100000000000001%. So it’s been a good month for our port­fo­lio. Let me see some dif­fer­ent time­lines over the last one year. W port­fo­lio is up 21.12% ver­sus the index up 14.26%. So we’re doing not dou­ble mar­ket, but 50% bet­ter than the mar­ket over the last one year.[00:07:00]

Uh, it’s been been a pret­ty good year for the dum­my port­fo­lio.

Tony Kynas­ton: Yeah,

Cameron: Um.

Tony Kynas­ton: noticed when I was look­ing at those results, the dum­my port­fo­lio has more than dou­bled now since we start­ed. Um, I don’t know when it actu­al­ly crossed as a dou­ble, but, um, it’s, you know, we start­ed with a notion­al of 20,000, it’s now about 44, 40 5,000 after com­ing up on six years. So that’s pret­ty good.

Cameron: Is it? Is that good?

Tony Kynas­ton: Yeah. Mm-hmm.

Cameron: Oh, okay, good. Yeah, it’s 40 3057 port­fo­lio val­ue at the moment. Um, Tony, I saw an arti­cle in the Enchant­ed Clear just ear­li­er Mass. US Job Cuts could come to the ASX, espe­cial­ly these 20 firms goes on to talk about how Microsoft­’s laid off 15,000 peo­ple already this year out of 230,000.

But it goes on to say the ASX 200 is sit­ting [00:08:00] near record lev­els despite three straight years when col­lec­tive prof­its have gone back­wards. Investors will want reas­sur­ance that earn­ings growth is com­ing, cost cut­ting can help pro­vide it. It’s talk­ing about the com­bi­na­tion of a chop­py macro envi­ron­ment, par­tic­u­lar­ly domes­ti­cal­ly top­py mar­ket val­u­a­tions and ris­ing adop­tion of AI will cre­ate pres­sure for cost cut­ting pro­grams across the Aus­tralian mar­ket.

But I want­ed to talk to you about the three straight years when col­lec­tive prof­its have gone back­wards. They link to an arti­cle from two weeks ago, July 15th. Also chant­ed clear. The ASX is in a prof­it drought. These 21 stocks can help avoid it. They’re lov­ing the these 10 stocks, these 21 stocks. Yeah.

Tony Kynas­ton: has, has

Cameron: Beat­ty titles.

Tony Kynas­ton: tak­en over the AFR? Has he.

Cameron: It must have. Um, so like as a, an investor of a few years expe­ri­ence, [00:09:00] when you see state­ments like that, the ASX sit­ting at near record lev­els, despite three straight years when col­lec­tive prof­its have gone back­wards, what does that tell you?

Tony Kynas­ton: Uh, well, I’m remind­ed of oth­er times when the ASX has gone up. It’s what? It’s what Usu­al­ly it’s what call, it’s what is called PE expan­sion. So com­pa­nies aren’t more prof­itable, it’s just peo­ple are pay­ing more for them. So again, it’s lot of that’s dri­ven by pas­sive flows. There’s arti­cles I’ve read say­ing that that includes pas­sive flows from the US now, which are try­ing to diver­si­fy out of the US econ­o­my, uh, giv­en all that’s hap­pen­ing there.

Um, and the, and some peo­ple think­ing there’s a reces­sion around the cor­ner there. Uh, and that’s always a, it’s not a, it’s a great time to be invest­ed in the mar­ket, but it does­n’t always end well. So, um, obvi­ous­ly you can’t keep going up like that and. You know, I could, I could write a Fin Review arti­cle, which says, from here stocks, stocks can go up, they can go side­ways or they could go down. That’s pret­ty much

Cameron: [00:10:00] pick

Tony Kynas­ton: hap­pen, Yeah. Pick one.

Cameron: Hmm.

Tony Kynas­ton: okay. All bases are cov­ered and I’m always right. Um, but, uh, but yeah, so hav­ing seen this play up before, it, it’s, it can be any one of those three things that the mar­ket can go side­ways for a long time until prof­its catch up and the PE gets back towards nor­mal. there could be a GFC style event where some kind of dis­rup­tion to glob­al finance or glob­al e economies, which trig­gers a rerat­ing of the PEs because peo­ple just don’t wan­na be in those assets any­more and across the board. And they, we usu­al­ly swing the pen­du­lum back the oth­er way, um, or, uh, prof­its can improve.

As you know, that author of the arti­cle says have to be that they’re grow­ing rev­enues to grow prof­its. They could cut costs. So, yeah, it’s, it’s, Pret­ty hard to say which one of those is gonna hap­pen. And it’s even hard­er to say in what kind of time­line. we just stick to the rules and wait for it all to unfurl.

Cameron: Mm, [00:11:00] just fol­low the rules. Well, speak­ing of fol­low­ing the rules, I men­tioned I think last week that I was gonna test out the new open AI agent tool to do an audit, auto­mate an audit check.

Tony Kynas­ton: And,

Cameron: Not great. Not good. Not good. It, um,

Tony Kynas­ton: and dis­re­spect AI again. Cam, we have swap posi­tions.

Cameron: look, there’s, there’s good and there’s bad. The good is

Tony Kynas­ton: class. After this.

Cameron: The good is

Tony Kynas­ton: a late

Cameron: okay. Yeah. Yeah. Swap and rolls. The good is, um, it was able to do a lot of things quite eas­i­ly, like it could find the web, I just gave it a list of stock codes. I was able to find the web­site, find the investor rela­tions page, uh, find the lat­est annu­al report stuff that I’ve been try­ing to code it to do for [00:12:00] the last year or two with no suc­cess.

Uh, and then scan it. Give me a, uh, you know, read it, read the audi­tor report, and then put some data into a spread­sheet as a sum­ma­ry for what it says. Until I gave it a list of stocks that I knew had a qual­i­fied audit, and it start­ed say­ing that they were fine. And then I went and looked, it gave me the link to the most recent finan­cial report for one of them.

I went and had look at it, and it was a qual­i­fied audit, still as clear as day. And I said, Hey, it says this. He goes, oh yeah, yeah, you’re right. I, I screwed that one up. And I was like, okay, well that’s point­less then if I have to go and dou­ble check them all. I mean, I, yeah, I can’t go. Yeah, I mean, it, it will give you the links to the reports, which makes it a lit­tle bit eas­i­er, but So it’s not there yet.

It is unre­li­able, sad­ly. So we still have to do it the old fash­ioned way for now.

Tony Kynas­ton: Hmm.

Cameron: [00:13:00] Uh, well I think that’s all the news I got. Um. This week, Tony, don’t have much else. Oh, actu­al­ly I do have a ques­tion, and I’m gonna talk to you more about this in the, in the US show, but the stock that I’m doing at Pulled Pork on for the US today is a com­pa­ny called Seneca Foods.

Been around since 1949. They’re one of the biggest food pack­ag­ing oper­a­tions, like canned food and that kind of stuff over there. And when I was drilling down into the num­bers, their prop calf’s real­ly low. It’s like a two, but it’s because they had a real­ly strong year. Their cash flow was real­ly strong last year com­ing off a cou­ple of bad years.

’cause they had, they pulled a lot of stock out of inven­to­ry and used it to boost rev­enue. So it’s like a spike. If I look at their cash flow over the last five years, it’s kind of, it’s run­ning 30 mil, 40 mil, [00:14:00] 20 mil, 30 mil, neg­a­tive 200 mil. ’cause there was a bad year of lots of rains and bad crops and stuff like that in the US Then they’re deal­ing with steel and tin tar­iffs.

’cause the, the num­ber one line item cost for thin­ning is got tar­iffs on it now, but then last year, $330 mil­lion oper­at­ing cash flow. So the Pr/OpCaf looks real­ly good right now, but next year prob­a­bly won’t look as good a year before it would­n’t have looked as, it had neg­a­tive cash­flow, I think the year before.

So, you know, we’ll talk more about this in the next show, but I thought it was rel­e­vant to ask you this on this show too. So do we just take it as a point in time and go, well it is what it is and, um, rate it. Or if it’s a, you know, once in a Blue Moon event that it has a good prop calf, would you dis­count it?

Tony Kynas­ton: I would still buy it, [00:15:00] uh, on the basis that the com­pa­ny’s got lots of cash to deploy and, back them back man­age­ment to deploy it. Um, well, but it might mean, of course, that the Seneca Foods comes off the buy list next year. Um, um, the first ques­tion is, is, is it a 12 month fig­ure or a six month fig­ure?

Because, um, I pre­fer 12 months, so I’ll add two six­es togeth­er. Um,

Cameron: fig­ure. Yeah.

Tony Kynas­ton: in Stock Doc­tor, we get a, a rolling 12 month fig­ure, which I don’t think we get in Edia. So would take six months of that bad year and over six months of the good year, which would help to even it out too. then you would get a 12 month fig­ure of two.

Good, good half. So it would, would be a peri­od when it was a good Um,

Cameron: It’s a 12 month.

Tony Kynas­ton: Yep.

Cameron: it’s a 12 month fig­ure. I’ve got it. It says per peri­od length, 12 months. I like 2025. So this is the end of report­ing peri­od. Is the end of March, 2025. Right? 335 mil­lion.

Tony Kynas­ton: Mm-hmm.

Cameron: go back 2024. It was neg­a­tive 83, 20 23. Neg­a­tive 2 1 3 20 22 30 [00:16:00] mil twen­ty twen­ty one, a hun­dred eighty three mil twen­ty twen­ty, a hun­dred twen­ty sev­en mil.

So it’s all over the place. But this year has been a good one.

Tony Kynas­ton: yeah. Um, there are cas­es that I’ve seen in the Aus­tralian mar­ket where like there’s been a boost to oper­at­ing cash­flow ’cause of a one-off event, what­ev­er it is, of an asset if it goes through oper­at­ing cash­flow for what­ev­er rea­son, do that. Um, yeah, I can’t think of any oth­er exam­ples, but there were, yeah.

Move­ments and inven­to­ry, like you’re say­ing, would def­i­nite­ly dri­ve it. and there’s com­pa­nies like, uh, um, the IT reseller that was on our buy list for a while where, you know, it can have bumpy cash flows because they, they bought. Some stock, they haven’t sold this half, but they sell it next half, that kind of thing.

Cameron: Yeah.

Tony Kynas­ton: yeah, that you can, you can see those things from time to time. Um, I still am hap­py to to back them because at least for a peri­od they’ve got lots of cash to invest in the [00:17:00] busi­ness. Um, there are some investors and there’s cer­tain­ly peo­ple out there who will look at a file or even a 10 year aver­age pe not so much oper­at­ing cash­flow, but before they make a deci­sion based on a PE ratio, they’ll look at the long term aver­age.

Um, I’ve, I’ve nev­er done that, nev­er looked at whether it’s bet­ter or not than doing a one year at it. Um, I guess from where I’m com­ing from, uh, I think if you’re gonna use a five or a 10 year aver­age num­ber, you’d wan­na hold a stock for five or 10 years real­ly, um, to, you know, get val­i­da­tion for that kind of invest­ment deci­sion, I guess. And it’s rea­son­ably rare that I would hold some­thing for that length of time. So, I’m hap­py to buy the short term cash­flow bump.

Cameron: Right. Good. And this is, I mean, it’s a, you know, we’ve, I’ve talked about some weird stocks on the Amer­i­can show late­ly, but this is, this is a clas­sic Berk­shire type stock. They make canned food and they’ve been around a long time and they have a real­ly big mar­ket share. But [00:18:00] yeah, it’s kind of as bor­ing as you can get.

They make tinned pea tinned pump­kin.

Tony Kynas­ton: saw the notes and I went, oh, this is, I got the excit­ed. This is great. We’ve had all kinds of crap up until now of drug com­pa­nies doing bad things. Coal­ing gas over­seas, uh,

Cameron: Yeah.

Tony Kynas­ton: Amer­i­can or South African tele­phone wire com­pa­nies, and I’m just like, yes.

Cameron: Hmm. A sim­ple, a sim­ple busi­ness. Yeah. Yeah. So speak­ing, um, not to go down too much of a rab­bit hole, but I, I did wan­na men­tion this and we’ll talk about more on the US show, but the com­pa­ny, the, uh, Chi­nese smart­watch com­pa­ny that I did the pulled pork on three weeks ago, spiked four days after I pub­lished the show.

It is up 360% today since I did the pulled pork on it three weeks ago. Yes, you heard that right. Lis­ten­ers, 360%. It has gone up in [00:19:00] three weeks.

Tony Kynas­ton: So if you want your next three bag­ger, sub­scribe to the US Show and lis­ten to the pulled pork this week. Oops. We just gave

Cameron: Well act actu­al­ly, um, like a lot of the, well, yeah, no, that’s par­tic­u­lar­ly good. A lot of the com­pa­nies that we’ve done on the Paul Pork have done okay since we did them. ChemX cx, uh, the Cement Com­pa­ny, I think they were CX weren’t they? Cemex They’re up 50% since we talked about ’em at the end of March. The rest are up, you know, 16, 18, 19.

Some are up sin­gle dig­its. One is down the, um, the, uh, was it Inel, Chile, the mobile phone com­pa­ny there. They went back­wards, but, uh, every­one else has done. Okay.

Tony Kynas­ton: Well,

Cameron: who, we’ll leave that for the US show. What have you got on your list [00:20:00] of.

Tony Kynas­ton: pulled porks have done well on the Aus­tralian show too. I was just say­ing the Fair Plen­ty was up today. I think it was our best per­form­ing stock in the port­fo­lio. Plen­ty group.

Cameron: Plen­ty group. Oh, good. Yeah. Let me, um, I did a, uh, sort of sum­ma­ry on the, for the light, uh, sub­scribers yes­ter­day we had, uh, plen­ty group was up as of yes­ter­day, well, Fri­day night I guess it was up near­ly 12% for the week. LAU was up 8.3% for the week. So they had good weeks.

Tony Kynas­ton: Yeah.

Cameron: Hmm. Alright.

Tony Kynas­ton: to go through. Um,

Cameron: Yeah.

Tony Kynas­ton: uh, I, I pulled this one out. It’s Mac­quar­ie Group. Um, and for a cou­ple of rea­sons, has­n’t been on our buy list for a while, but it has been on the buy list in the past. And, so some­one out there who sub­scribes might be still hold­ing it, but, um, either way, I did notice that their CFO [00:21:00] resigned unex­pect­ed­ly dur­ing the week. Mac­quar­ie’s been in, in the finan­cial news quite a bit because it suf­fered a rem strike at its lat­est, uh, uh, meet­ing. And, um. Uh, so, were sto­ries about the CEO chop­ping on the phone try­ing to calm investors down before the meet­ing and telling ’em to vote for the REM report to go through.

And then in the mid­dle of all that, the CFO resigned, uh, and the CFO was kind of being tout­ed as a replace­ment to the CEO who’s now been there for sev­en years. Uh, which if that is true, has also put suc­ces­sion into, um, a bit of suc­ces­sion plans into dis­ar­ray poten­tial­ly as well. So, uh, yeah, I would raise a red flag on Mac­quar­ie Group until we find out more about the CFO’s res­ig­na­tion and who replaces him and when the ship study is a bit, take the red flag off.

Cameron: Oh, so MQG, red flag.

Tony Kynas­ton: Yes. On um, like­wise, [00:22:00] Fortes­cue Met­als Group has been on the buy list for a long time. It’s, it’s been in a down­trend, so, uh, it has­n’t been a buy, strict­ly speak­ing, and it’s also had a com­mod­i­ty trade go against it for a long time in iron ore, but that’s turned around this year. well and so is the com­pa­ny.

So, um, it’s up 4% on release of its fourth quar­ter results, announced a record iron ore ship­ments of 55 mil­lion. in the quar­ter and it con­tributed to total ship­ments for the year of 198 mil­lion tons, 4% high­er than, uh, this finan­cial year 2024. So, and it’s the stock­’s rerat­ing with the iron ore price.

So if any­one did hold onto it, hap­py days, but it’s cer­tain­ly back to being a buy­er again on our buy list. some­thing else dri­ving the Fortes­cue met­al share rise recent­ly is the, the, um, chair­man, For­est came out and said he was cut­ting his expo­sure hydro­gen ener­gy [00:23:00] and, So Mr.

Green is now Mr. White or Mr. Black again, if he was a

Cameron: Mr. Pink? Yeah.

Tony Kynas­ton: or Mr. Yeah. Mr. Black. He’s back in the black. So, um, he’s, he’s back­track­ing from some of the clean invest­ments and the mar­ket’s breath­ing. A si sigh of relief. Yeah.

Cameron: So are you tak­ing the red flag off of FMG then?

Tony Kynas­ton: Um, we have to, don’t we? It’s, it’s turned around, it’s sen­ti­men­t’s back.

Cameron: And I.

Tony Kynas­ton: well, we’re about to get new results. I’ll prob­a­bly leave it until new results come out. Um, we said, I think orig­i­nal­ly we keep it on until new results came out or there was a change in man­age­ment. Uh,

Cameron: Have has that.

Tony Kynas­ton: not gonna be a

Cameron: Yeah. No, and, and it was part­ly all of the exec­u­tive depar­tures that had us con­cerned. Right.

Tony Kynas­ton: Yep.

Cameron: But if the busi­ness is doing well despite that, then maybe we don’t have to wor­ry

Tony Kynas­ton: And I think also too, some of those exec­u­tive depar­tures were around the clean ener­gy busi­ness, [00:24:00] which it sounds like is putting less empha­sis on at least if not out of, so, uh, might be enough to take the red flag off.

Cameron: when new results come out. We’re gonna wait for new results.

Tony Kynas­ton: Which is

Cameron: Yeah. it’s, it’s con­fes­sion sea­son any­way, and we’re not buy­ing any­thing dur­ing con­fes­sion sea­son. Right.

Tony Kynas­ton: Cor­rect. Uh, yeah. And so I men­tioned Plen­ty group being up. Um, they had, uh, an announce­ment recent­ly that the loan port­fo­lio, which is a

Cameron: Ah.

Tony Kynas­ton: and prof­itabil­i­ty, increased to 2.7 bil­lion at the 30th of June, 2025. A 21% increase from the same peri­od last year, and a 6% increase from the March quar­ter. they had low cred­it loss­es of 94 basis points against 130 basis points in the pri­or, pre­vi­ous, uh, peri­od, and basis points in the pri­or quar­ter. Uh, and rev­enue was up 73%. So that’s why the stock was up. Uh, this [00:25:00] week,

Cameron: Right. Very good.

Tony Kynas­ton: report­ing

Cameron: have learned how to,

Tony Kynas­ton: So, you know, peo­ple get ready for a. Um, a bit of a Nia­gara Falls of new infor­ma­tion, but they can start buy­ing again once we get this out. And it’ll be inter­est­ing to see whether we get as many sur­pris­es and unan­nounced drops as we did last time.

Cameron: yeah.

Tony Kynas­ton: We’ll wait and see on that one.

Cameron: Okay. else? Ah, yes, the new entry on our buy list this week.

Tony Kynas­ton: Yes.

Cameron: Yeah.

Tony Kynas­ton: called one Marine coders, BGN, hope I’m pro­nounc­ing that right. B‑H-A-G-W-A‑N. Not sure if the B

Cameron: Bug one? No, it’s the bug one. You know the bug one?

Tony Kynas­ton: don’t.

Cameron: Did­n’t you watch the

Tony Kynas­ton: char­ac­ter

Cameron: No, no, no, no.

Tony Kynas­ton: Yeah.

Cameron: You did­n’t watch the, um, [00:26:00] wild, wild Co, wild Wild Coun­try doc­u­men­tary about Rajni Osho.

Tony Kynas­ton: None of those words make any sense to me. No.

Cameron: Oh, it’s a great doc­u­men­tary, man. You should watch that. Um, Chris­sy and I watched it a few years ago. It as a Net­flix doc­u­men­tary. You remem you, you will remem­ber the, um, I think they were the orange peo­ple.

Tony Kynas­ton: the bog Yeah. Got it.

Cameron: Yeah, that’s, so, Raj Niche was Bgan, Sri Raj Niche. A k Aho was his pen name. But uh, yeah, BGAN I think is a, I think it’s a title means like, yeah, some sort of spir­i­tu­al leader, I think, think, yeah.

Tony Kynas­ton: you think, is there a link between the Orange peo­ple and Bwe and Marie? I,

Cameron: I, I don’t know. ’cause I looked at, um, Baris yes­ter­day when it hit the buy list and I was try­ing to, to see why they called them­selves that, [00:27:00] but there was noth­ing on the web­site about it. Yeah. Baris Bagan means, uh, a guru or revered per­son. So we, we should just refer to you as the bagan of QAV from now on.

I think that’s the new That’s, that’s it. Now you are Baran tk.

Tony Kynas­ton: Did­n’t he famous­ly dri­ve about 27 Rolls Royces and his

Cameron: Mm-hmm.

Tony Kynas­ton: sit, around say­ing, orange, orange, orange, orange, all day. So,

Cameron: I dun­no about the last bit. But yeah, he had lots of Rolls Royces that were g gift­ed to him by wealthy fol­low­ers, would just give him Rolls Royces. And then the woman that was run­ning his oper­a­tion end­ed up, you know, arm­ing all of their, uh, peo­ple with machine guns and they start­ed poi­son­ing the wells of the water sup­ply of a town that they were at, that were try­ing to run them out.

And she went full mil­i­tant. They were, they set up an ashra, they got out of India and they set up an ashra in the US and bought all of this land. And then the locals [00:28:00] start­ed to try and dri­ve them out ’cause they did­n’t like these fun­ny hip­pies, uh, prac­tic­ing free love and wear­ing robes and doing that kind of stuff.

So the woman. Um, who was run­ning it? Yeah, she went full mil­i­tant and, uh, said, you know, you come at me and you’ll, you’ll, you know, muck around and find out, basi­cal­ly. And she went to jail. You know,

Tony Kynas­ton: So it was­n’t, the bug but­ton was­n’t preach­ing. Peace, love, and under­stand­ing. It was, it

Cameron: he was, no, he, he was, yeah, the doc­u­men­tary sort of depicts him as like he was kind of just bang­ing all of his fol­low­ers and hav­ing a good old time and she was run­ning the oper­a­tion. I don’t think he knew much about what was going on. But, uh, any­way, this is

Tony Kynas­ton: the,

Cameron: the dif­fer­ent bug. One,

Tony Kynas­ton: Jef­frey Epstein Ghis­laine rela­tion­ship from the eight­ies or when­ev­er it was?

Cameron: uh,

Tony Kynas­ton: Yeah. Can’t

Cameron: did­n’t exist. Jef­frey Epstein nev­er exist­ed. Tony [00:29:00] Clin­ton made him up. Democ­rats made it up. Yeah, it’s all made up. It’s all fake. All the video that you saw of him for decades was ai. It’s all made up. It was a mem­o­ry trick. You’ve all been fooled into believ­ing it did­n’t real­ly exist.

Tony Kynas­ton: You know, I thought that would be the answer that it was, it was an AI cre­ation. Yep. Okay.

Cameron: Yeah.

Tony Kynas­ton: And on that basis, they’ll par­don Ghis­laine and let her out of, uh, jail, whether off

Cameron: Oh, any day. Any day now. Yeah.

Tony Kynas­ton: Good.

Cameron: end up dead, one or the oth­er. Uh.

Tony Kynas­ton: But any­way, to Wan Marine, BGN. So on the pull on the, the buy list this week, uh, new on the buy list. So that means if any­one’s still using my spread­sheet for Stock Doc­tor down­loads, it’ll need to be added man­u­al­ly to the man­u­al data sheet. ’cause it won’t, um, update auto­mat­i­cal­ly, uh, which I did this morn­ing myself.

Um, it’s only been list­ed for 12 months, in fact. [00:30:00] Exact­ly. I think it list­ed on the 31st of July, uh, 30th of July last year. That’s the 29th today. But by the time peo­ple will hear this, it’ll be 12 months. and, uh. It’s, it list­ed, um, about 5% high­er than the cur­rent share price. So the share price print­ed down for a while, and then it looks like around the time it got includ­ed in your ordi­nary index in March, the share price start­ed to climb again. sure if are relat­ed, but that’s about the time it turned around and now it’s only about 5% below its list­ing price. So uh, it’s had a good run recent­ly. Uh. num­bers I use in this is still from Decem­ber, 2024 because, uh, we haven’t got results yet, but they’ll be com­ing out in a cou­ple of weeks.

So bear that in mind, uh, from their list­ing announce­ment. To give you some back­ground of who they are, say Bawan has a proven oper­at­ing his­to­ry of pro­vid­ing bespoke marine solu­tions [00:31:00] uti­liz­ing a diver­si­fied fleet of approx­i­mate­ly a hun­dred inshore and off­shore ves­sels. The com­pa­ny was found­ed in 2000 by the Kows­ki fam­i­ly in Ger­ald­ton, West­ern Aus­tralia with a sin­gle ves­sel. fleet has expand­ed via organ­ic growth from increas­ing demand for its ser­vices togeth­er with strate­gic acqui­si­tions to build on its capa­bil­i­ties. Barbin enjoys

Cameron: Join.

Tony Kynas­ton: with its clients, includ­ing major oil and gas and min­ing com­pa­nies, con­struc­tion com­pa­nies, and gov­ern­ment enti­ties. And the chair also stat­ed at the time, and I quote, Barbin, is now enter­ing an excit­ing new growth phase emer­gence of the oil and gas decom­mis­sion­ing sec­tor and the future devel­op­ment of the off­shore wind ener­gy sec­tor. I’m excit­ed about the oppor­tu­ni­ties and poten­tial for the com­pa­ny to expand into new indus­try seg­ments. So cur­rent­ly they oper­ate approx­i­mate­ly a hun­dred ves­sels in Aus­tralian waters all around Aus­tralia. They claim to be the largest list­ed marine ser­vices com­pa­ny in [00:32:00] Aus­tralia. Uh, I think, I’m just try­ing to I had, I did own shares in one, many, many years ago. I think it was called M‑M-A-M-M‑A off­shore. Any­way, I think that might have been delist­ed at some stage since then. Any­way, they claim to be the largest list­ed, and I’ll go with that. Uh, inter­est­ing­ly enough that fol­low­ing the IPO, direc­tors, uh, were still retained 49% of the com­pa­ny. the CEO remains, uh. The, uh, founder and, uh, MD of the com­pa­ny, a guy called Louis Kos­ki, he’s run the com­pa­ny since 2000 when they had one ves­sel when it start­ed. And, uh, Karen Kos­ki was a, a co-founder and also remains active as the GM of cor­po­rate ser­vices. So the fam­i­ly’s been involved for all that time. Uh, hark­ing back to what the chair was say­ing about growth, uh, oppor­tu­ni­ties, [00:33:00] excuse me, the um. The MD list­ed oppor­tu­ni­ties, uh, for growth decom­mis­sion­ing. So see­ing, they picked up a big con­tract recent­ly and they’re see­ing a lot of work in, uh, off­shore oil and gas indus­try who’s had rigs out there for decades.

And some of them need heavy main­te­nance or even decom­mis­sion­ing. Uh, part of that’s being dri­ven by, um, uh, upturns in green ener­gy, but part of it’s prob­a­bly, most of it’s just the fact that it’s get­ting old, um, off­shore wind farms. Uh, they’re see­ing that as a, an ascent and grow­ing mar­ket across the APAC region. um, anoth­er area of growth is con­struc­tion and main­te­nance, uh, ser­vices. a lot of that’s ser­vic­ing the oil and gas indus­try on their plat­forms. Defense is big. Um, so there are, is more mon­ey going into defense thanks to Mr. Trump and there’s a renew renewed focus in the indus­try on marine logis­tics, secu­ri­ty, and off­shore sur­veys. [00:34:00] uh, there’s an increas­ing spend on naval infra­struc­ture and, uh, as I said before, main­te­nance. So aging off­shore assets are marine port infra­struc­ture and, uh, impe­tus to main­tain pro­duc­tion ves­sels and opti­mize asset uti­liza­tion. Uh, well, sor­ry, that’s what they’re doing. Um, sor­ry. The, I’ve down­loaded the table from the inter­net and it’s thrown all the, are out, so I’m sort of hav­ing to put it togeth­er as I speak.

But, um, all of those things, uh, lead to their strat­e­gy of, uh, high asset uti­liza­tion and, uh, keep­ing the ves­sels, uh, a hun­dred per­cent uti­lized. Uh, Decem­ber results came out after the IPO. They were strong broad­ly in line with the prospec­tus and boost­ed by the cap­i­tal raise. Uh, when they list­ed was up 41%.

EBITDA was up 32%. Cash flow was up 64%. inter­est­ing­ly enough, net debt was reduced to 11.5 mil­lion, down from 81.4 mil­lion after most of the pro­ceeds in the IPO went to pay­ing off debt. [00:35:00] So very low geared, um, off lots of cash flow, rev­enue up, et cetera, et cetera. So it’s got a few tail­winds behind it, onto the QAV num­bers. This is still only a small stock and, and the a DT is 70,000, so it’s not gonna suit every­one. Um, and part of the rea­son why it’s, uh, small, uh, in terms of a DT is because half the com­pa­ny’s still tied up in the found­ing found­ing com­pa­ny, a found­ing, fam­i­ly. So, uh, there’s only half a float avail­able from the mar­ket cap any­way, it’s, uh, it’s slight­ly trad­ed as well. Um. I did the, the, the analy­sis at 58 cents, which is, uh, above IV one of 35 cents. And we don’t have an IV two we don’t have a fore­cast earn­ings, earn­ings per share num­ber because we don’t have much bro­ker­age cov­er­age. So that’s, that’s actu­al­ly a pos­i­tive, I think, ’cause it gives us a chance to get in before, the com­pa­ny grows two big and starts attract­ing, uh, oth­er bro­ker­ages to, uh, review it. no con­sen­sus tar­get, so that’s [00:36:00] good. Um,

Cameron: Actu­al­ly,

Tony Kynas­ton: It’s in growth mode, so we can’t score it for that Stock Doc­tor have a finan­cial health

Cameron: it looks like

Tony Kynas­ton: yet and they’ve only got one set of fig­ures to go on. So,

Cameron: it

Tony Kynas­ton: that’s some­thing to bear in mind. And the num­bers I’m going through, there’s, uh, some of them we can’t score yet because we only have. 24 num­bers, uh, uh, to, to go with Wikipedia uh,

Cameron: not just

Tony Kynas­ton: for qual­i­ty, which is quite

Cameron: like very safer.

Tony Kynas­ton: for val­ue, which is also good, but they only give it 21 for momen­tum.

Cameron: Yeah, it is

Tony Kynas­ton: score is 74. I sus­pect the momen­tum score

Cameron: very strong.

Tony Kynas­ton: the next half giv­en the price rise that’s occurred since April.

So I think it’s been scored down on momen­tum because it’s still below its list­ing price, but it has gone up a lot in the last few months. Uh, stock have an F score of eight out of nine, which is very good. Um, get­ting back to the com­pa­ny num­bers, the PE is 8.5 times, which again, we can’t score ’cause it’s the first P we have, so we can’t give it a score for [00:37:00] that. how­ev­er, is only 3.79 times, so we can score it for that. Very good. Net equi­ty per share is 60 cents, so. Uh, as of the time of analy­sis, when the price is 58 cents, we can buy it for less than book, which is good. Uh, don’t have a fore­cast earn­ings per share, so we can’t put it over growth and score it on that basis.

Uh, although I do, um, rec­og­nize that the com­pa­ny is fore­cast­ing growth, even though we don’t have a bro­ker­age num­ber for that, uh, fore­cast, it’s a recent three point trend line upturn, so we can score it for that. we can’t give it a, a con­tin­u­ous­ly equi­ty trend score ’cause we’ve only