Lumpy Payback — QAV AU 915

QAV AU 915 Club

[00:00:00] Cameron Reil­ly: Worked. I worked, worked my nor­mal hours. But instead of gonna kung­fu, we went to the beach. So let’s change it up a bit.

[00:00:06] Tony Kynas­ton: Yeah. Good.

[00:00:07] Cameron Reil­ly: Wel­come back to QAV Aus­tralia. [00:00:10] TK 9 1 5 is the episode num­ber 14th of April, 2026. You know what, Tony? [00:00:20] Uh, why did the chick­en cross the road? Why did Trump, why did Trump wan­na Ron­da open the eff­ing straight so he could close the eff­ing straight? That was D [00:00:30] chess, Tony.

[00:00:33] Tony Kynas­ton: Yeah. And

[00:00:34] Cameron Reil­ly: my God.

[00:00:35] Tony Kynas­ton: yeah, the old price was get­ting too low.

[00:00:38] Cameron Reil­ly: Yeah.

[00:00:39] Tony Kynas­ton: Mm.

[00:00:39] Cameron Reil­ly: [00:00:40] Hey, uh, I got some, I, I’m gonna got some quotes here about Trump. I’m gonna read you these quotes. I want you to guess who said these things. I. I go back and forth between [00:00:50] think­ing Trump is a cyn­i­cal ass­hole like Nixon, who would­n’t be that bad and might even prove use­ful, or that he’s Amer­i­ca’s Hitler.

[00:00:57] Tony Kynas­ton: Wow. My, my first thought was Hunter [00:01:00] s Thomp­son, but he’s dead. So Matt Taib­bi, the son of, son of Hunter s Thomp­son in spir­it.

[00:01:07] Cameron Reil­ly: No. I’ll read anoth­er quote from the [00:01:10] same per­son. You can keep guess­ing. Mr. Trump is unfit for our nation’s high­est office.

[00:01:15] Tony Kynas­ton: Oh, that’d be some­one like Paul Krug. Paul Krug­man.

[00:01:19] Cameron Reil­ly: [00:01:20] No, same per­son. Trump’s promis­es are the nee­dle in Amer­i­ca’s col­lec­tive vein.

[00:01:25] Tony Kynas­ton: Mm. Rupert Murd.

[00:01:28] Cameron Reil­ly: Hmm, same per­son. [00:01:30] Um. agree with you on Trump because I don’t think he’s that per­son. I don’t think he actu­al­ly cares about folks. This is respond­ing to a radio host call­ing Trump a [00:01:40] total fraud. I agree with you on Trump.

[00:01:43] Tony Kynas­ton: Yeah, no idea. I’ve run out of thoughts

[00:01:46] Cameron Reil­ly: said, fel­low Chris­tians, every­one is watch­ing us when we [00:01:50] apol­o­gize for this man. Lord, help us. He also said, Trump’s

[00:01:55] Tony Kynas­ton: The Pope

[00:01:55] Cameron Reil­ly: is a biggest fail­ure as a, as a polit­i­cal leader, is that he [00:02:00] sees the worst in peo­ple and he encour­ages the worst in peo­ple. Those were all quotes from jd.

[00:02:07] Cameron Reil­ly: Those were all quotes from JD Vance, uh, in [00:02:10] 2016. Tony?

[00:02:11] Tony Kynas­ton: before he became vice pres­i­dent.

[00:02:13] Cameron Reil­ly: Yeah.

[00:02:13] Tony Kynas­ton: Yeah. It’s, it’s a, it’s a won­der. We can dig those up. You would’ve, um, delet­ed a lot of them, I would’ve [00:02:20] thought.

[00:02:20] Cameron Reil­ly: Dif­fer­ent

[00:02:21] Tony Kynas­ton: Mm-hmm.

[00:02:22] Cameron Reil­ly: talk­ing about Trump. He is a con artist. He runs on this idea. He is fight­ing for the lit­tle guy, but he’s spent his entire career stick­ing it to the lit­tle guy. [00:02:30] We should­n’t entrust the nuclear codes of the Unit­ed States to an errat­ic indi­vid­ual and the con­ser­v­a­tive move­ment to some­one who has spent a career stick­ing it to work­ing [00:02:40] peo­ple. He’s a third world strong man and for years to come. There are many peo­ple on the right in the media and vot­ers at large that are going to be [00:02:50] hav­ing to explain and jus­ti­fy how they fell into this trap of sup­port­ing Don­ald Trump because this is not gonna end well one way or the oth­er.

[00:02:57] Tony Kynas­ton: Well, that sounds like some­one who was [00:03:00] beat­en by Trump in the pri­ma­ry. Some­one like, uh, Ker­ry or Rubio.

[00:03:05] Cameron Reil­ly: Rubio

[00:03:06] Tony Kynas­ton: Yeah, there you go.

[00:03:07] Cameron Reil­ly: Ker­ry’s a Demo­c­rat and he was long gone

[00:03:09] Tony Kynas­ton: Oh, sor­ry.

[00:03:09] Cameron Reil­ly: [00:03:10] came around. But

[00:03:10] Tony Kynas­ton: Yeah.

[00:03:11] Cameron Reil­ly: Those are quotes from Mar­co Rubio,

[00:03:12] Tony Kynas­ton: Yeah.

[00:03:14] Cameron Reil­ly: in 2016. I’ve got quotes sim­i­lar. Lind­sey Gra­ham, Ted Cruz, Nik­ki [00:03:20] Haley, um, yeah, Nik­ki Haley said No mat­ter what it is, fol­lows him.

[00:03:27] Cameron Reil­ly: Right­ly or wrong­ly, chaos fol­lows him in. Amer­i­ca is [00:03:30] tired

[00:03:31] Tony Kynas­ton: Yeah, that’s a good point. That’s prob, that’s prob­a­bly how I feel the most about Trump at the moment. He’s like an exhaust­ing kid who’s gone off the rails and you just sort of sit [00:03:40] down, sigh, where do I start? You’ve done bad. Just know you’ve done bad. Let’s, can we both agree on [00:03:50] that?

[00:03:50] Cameron Reil­ly: Uh, so Trump is stop­ping oil from leav­ing the Strait of Urs. Most of

[00:03:58] Tony Kynas­ton: Mm-hmm.

[00:03:58] Cameron Reil­ly: would be going to Chi­na, [00:04:00] Andra, and India.

[00:04:01] Tony Kynas­ton: Yep.

[00:04:02] Cameron Reil­ly: Now, I

[00:04:04] Tony Kynas­ton: It’s actu­al­ly quite smart.

[00:04:05] Cameron Reil­ly: I know you know your his­to­ry bet­ter than most Tony, [00:04:10] but why did the US get involved in World War ii?

[00:04:13] Tony Kynas­ton: Uh, the bomb­ing of Pearl Har­bor.

[00:04:15] Cameron Reil­ly: Why did the Japan­ese bomb Pearl Har­bor?

[00:04:18] Tony Kynas­ton: Mm, [00:04:20] they’re run­ning out of oil. I’m gonna guess,

[00:04:22] Cameron Reil­ly: And who stopped them from get­ting oil

[00:04:25] Tony Kynas­ton: uh, was it Tru­man, was he the pres­i­dent back then? No. It would’ve been Roo­sevelt. [00:04:30] Yeah. Mm-hmm.

[00:04:31] Cameron Reil­ly: The Amer­i­cans blocked Japan’s oil sup­ply, which is why they bombed Pearl Har­bor in the first place. It was a dec­la­ra­tion of war by the [00:04:40] Amer­i­cans on Japan, effec­tive­ly eco­nom­ic war­fare pre­vent­ing them from get­ting oil. They need­ed oil ’cause they were fight­ing with Chi­na. And so, uh, yeah, so [00:04:50] not a good his­to­ry of when you stop pow­er­ful coun­tries from get­ting oil

[00:04:54] Tony Kynas­ton: Well, I think, I think the log­ic behind, if there is log­ic behind chaos, if [00:05:00] the log­ic behind his move is that, uh, Chi­na will apply pres­sure on Iran to come to the table and nego­ti­ate to, to keep the [00:05:10] oil mov­ing.

[00:05:10] Cameron Reil­ly: or Chi­na will sell war­ships into the strait of, for Mabb and say, we’re tak­ing our oil. Thank you very much.

[00:05:18] Tony Kynas­ton: Yeah, that, that’s a pos­si­bil­i­ty. That’s [00:05:20] unlike­ly though, isn’t it? Don’t you think?

[00:05:21] Cameron Reil­ly: Look, I don’t think Chi­na wants a war. And I say this to

[00:05:24] Tony Kynas­ton: No.

[00:05:25] Cameron Reil­ly: who says, oh, Chi­na’s gonna invade, uh, Tai­wan. I’m like, Chi­na does­n’t need to invade [00:05:30] Tai­wan. Chi­na just needs to sit there and Tai­wan will come beg­ging even­tu­al­ly the way that things are going. I mean, every coun­try in the world’s gonna is already [00:05:40] part of Chi­na’s eco­nom­ic orbit and is gonna increas­ing­ly become in entwined in Chi­na’s eco­nom­ic orbit as Amer­i­ca spi­rals out­ta con­trol. [00:05:50] Um, and the Chi­nese are noth­ing if not patient. But, um, yeah, I don’t think they want to go to war, but I think they’re at a point [00:06:00] where they’re ready to assert their rights to open trad­ing with who­ev­er they want to trade with.

[00:06:07] Tony Kynas­ton: Mm-hmm.

[00:06:07] Cameron Reil­ly: I don’t think they’re gonna [00:06:10] let Trump get in the way of them get­ting their oil.

[00:06:12] Tony Kynas­ton: I think a more like­ly sce­nario, and I’m not dis­agree­ing with your log­ic there, although I think it’s a, a small chance of, of, um, [00:06:20] con­flict in the Straits of Ur. Anoth­er pos­si­bil­i­ty is that Chi­na blocks the South Chi­na Sea and so it’s tip for tat.

[00:06:28] Cameron Reil­ly: or helps the Houthis [00:06:30] block the Red Sea,

[00:06:30] Tony Kynas­ton: Yeah.

[00:06:31] Cameron Reil­ly: which is prob­a­bly com­ing. But I’ll tell you, I was read­ing this, uh, last night. Accord­ing to the Inter­na­tion­al Ener­gy Agency, Chi­na accounts for over [00:06:40] 70% of glob­al EV man­u­fac­tur­ing

[00:06:42] Tony Kynas­ton: Mm-hmm.

[00:06:43] Cameron Reil­ly: 85% of bat­tery cell pro­duc­tion.

[00:06:47] Tony Kynas­ton: Mm-hmm.

[00:06:48] Cameron Reil­ly: So when you’ve [00:06:50] got a world that’s suf­fer­ing from an oil cri­sis, coun­try that con­trols

[00:06:54] Tony Kynas­ton: I know.

[00:06:55] Cameron Reil­ly: major­i­ty of elec­tron­ic

[00:06:56] Tony Kynas­ton: Do they actu­al­ly have a, do they actu­al­ly have an incen­tive to [00:07:00] open the RAI for

[00:07:01] Cameron Reil­ly: well, they’ve obvi­ous­ly been work­ing towards ener­gy inde­pen­dence

[00:07:06] Tony Kynas­ton: Yeah.

[00:07:07] Cameron Reil­ly: now, and, um, this is [00:07:10] just play­ing right into their hands in

[00:07:12] Tony Kynas­ton: Mm-hmm. Yep. Yeah, and, and I think it’s fair to say that, uh, some peo­ple don’t wan­na buy Chi­nese [00:07:20] EVs in case, uh, there’s some kind of kill switch put in there by the CCP or data gath­ered by the CCP. But even­tu­al­ly, [00:07:30] if you can’t dri­ve your petrol car, you’re gonna buy an ev. If you’re gonna buy an ev, you’re prob­a­bly gonna buy a Chi­nese one.

[00:07:34] Tony Kynas­ton: So yeah,

[00:07:36] Cameron Reil­ly: Hey, do you know what this [00:07:40] is

[00:07:40] Tony Kynas­ton: that’s pret­ty hard to make out. Is it a feath­er or a, a seed? Is it a seed of some kind? Seed pod,

[00:07:49] Cameron Reil­ly: not [00:07:50] watch­ing our YouTube. Um, it’s a man­go, a Mabb, sor­ry. Man­go man­grove seed pod.

[00:07:55] Tony Kynas­ton: Yeah. Okay.

[00:07:56] Cameron Reil­ly: I became obsessed with these in Bund­aberg ’cause they’re [00:08:00] every­where in Bund­aberg. A lot of man­groves around Bund­aberg. And we would, we were down at Elliot heads at low tide almost every after­noon. ’cause Fox want­ed to [00:08:10] chase sol­dier crabs around, put them in, put them in a buck­et, and then, you know, like. Try and stop them from climb­ing out. Um, and these are every­where. And they’re [00:08:20] in, in shal­low water. They’re stand­ing upright

[00:08:22] Tony Kynas­ton: Mm-hmm.

[00:08:23] Cameron Reil­ly: they, and, and they have roots from this bot­tom that, that

[00:08:27] Tony Kynas­ton: Yep.

[00:08:28] Cameron Reil­ly: sand. And I was like, they’re [00:08:30] float­ing on the water and, and how do they end up upright? And so I picked one up and I threw it in the water. it does this

[00:08:37] Tony Kynas­ton: Yeah. Right.

[00:08:38] Cameron Reil­ly: it in the

[00:08:38] Tony Kynas­ton: It writes itself. [00:08:40] Yeah.

[00:08:40] Cameron Reil­ly: Yeah. They are bio­log­i­cal­ly engi­neered. Engi­neered. My moth­er said, it’s all designed. I’m like, yes. By bil­lion years of evo­lu­tion, [00:08:50] I,

[00:08:51] Tony Kynas­ton: Isn’t Don­ald Trump a kind of counter argu­ment to intel­li­gent design?

[00:08:57] Cameron Reil­ly: so they, [00:09:00] yeah, they, they are heav­ier on one end, so they just, they, they them­selves in the water sink. To the bot­tom [00:09:10] and roots just grow. And then you’ve got a man­grove tree. And I was like, that is so cool.

[00:09:17] Tony Kynas­ton: It is, isn’t it?

[00:09:18] Cameron Reil­ly: they get washed along by the [00:09:20] ocean and because they spread for hun­dreds and hun­dreds of kilo­me­ters appar­ent­ly on the ocean, then when they get into shal­low water, they just go [00:09:30] and insert them­selves. It just, ugh. I, I dun­no why. I just got such, such a thrill out watch­ing

[00:09:36] Tony Kynas­ton: You,

[00:09:37] Cameron Reil­ly: dis­cov­er­ing that when I

[00:09:38] Tony Kynas­ton: you,

[00:09:39] Cameron Reil­ly: the water,

[00:09:39] Tony Kynas­ton: [00:09:40] you once tried to tell me you had a DHD and now I’m see­ing symp­toms of it. ’cause how did we get from Oh, trunk to man­grove seeds?

[00:09:48] Cameron Reil­ly: it’s sit­ting on my desk. I picked [00:09:50] it up. I like this. I’ve got this, I got a lit­tle piece of that

[00:09:55] Tony Kynas­ton: Hi.

[00:09:55] Cameron Reil­ly: up on my last hike with Chris­sy that I have on my desk.

[00:09:58] Tony Kynas­ton: Mm-hmm.

[00:09:59] Cameron Reil­ly: my [00:10:00] cowry shell that I picked

[00:10:01] Tony Kynas­ton: Oh, that’s beau­ti­ful. Yep.

[00:10:02] Cameron Reil­ly: um, Elliot heads,

[00:10:03] Tony Kynas­ton: Mm-hmm.

[00:10:04] Cameron Reil­ly: year. It’s my, it’s my sort of Bund­aberg col­lec­tion. [00:10:10] RIP Ash­er Bosley. Tony, do you, uh, were you sad­dened by the news yes­ter­day of the death at 92 of Ash­er Bosley?

[00:10:17] Tony Kynas­ton: Well, I, I was­n’t, because I dun­no who that per­son [00:10:20] is.

[00:10:20] Cameron Reil­ly: She was one. She and her sis­ter Lata were the, the two queens of Bol­ly­wood, uh, [00:10:30] vocals, pret­ty

[00:10:31] Tony Kynas­ton: How come, how come? None of this is in the meet­ing notes you sent through in the morn­ing.

[00:10:36] Cameron Reil­ly: I like to keep you on your toes.

[00:10:38] Tony Kynas­ton: Yeah. Thanks.

[00:10:39] Cameron Reil­ly: [00:10:40] Um, he, she and her sis­ter Lata had these, like, real­ly weird, very, very high. Um, met, met [00:10:50] voic­es every Bol­ly­wood rom­com since, I don’t know, the eight­ies, sev­en­ties and eight­ies. They sang the female leads [00:11:00] up until they were in their eight­ies. Um, there would be a girl on, on cam­era, like, um, KA in 1995, DDLJ with Ger­ald Khan, who’s like [00:11:10] 23, 24, absolute­ly gor­geous. And you have an 80-year-old woman singing the female vocals of all of her num­bers. Um, and she passed away, but [00:11:20] an, an insane con­tri­bu­tion to Hin­di cin­e­ma in the last 40 years. Uh, Asha and her sis­ter. So

[00:11:28] Tony Kynas­ton: Hey, up.

[00:11:28] Cameron Reil­ly: fans out there, [00:11:30] join with

[00:11:32] Tony Kynas­ton: well, for all the Bowood fans out there, go to a restau­rant called Daugh­ter-in-Law. There’s, there’s a cou­ple in Mel­bourne. We went to one in South [00:11:40] Yarra on Chapel Street a cou­ple of weeks ago. And, um, it is just 3D Bol­ly­wood. It’s fan­tas­tic.

[00:11:47] Cameron Reil­ly: Oh

[00:11:47] Tony Kynas­ton: Real­ly. I’ll send you some pho­tos lat­er. It’s real­ly, [00:11:50] real­ly col­or­ful.

[00:11:51] Tony Kynas­ton: Um, if they have, if you have a birth­day, they bring over a tur­ban and put it on your head and sing you a song. Yeah. And it’s um, it looks so [00:12:00] bright­ly col­ored. It’s amaz­ing. It’s fan­tas­tic. Food’s good.

[00:12:03] Cameron Reil­ly: Next time I come down, we’ll have

[00:12:05] Tony Kynas­ton: Hmm.

[00:12:06] Cameron Reil­ly: Alright, well let’s get onto invest­ing. Um, [00:12:10] it’s been

[00:12:11] Tony Kynas­ton: You’ve been try­ing to avoid it.

[00:12:12] Cameron Reil­ly: I know it’s been a sur­pris­ing­ly good week though, um,

[00:12:16] Tony Kynas­ton: Yeah.

[00:12:17] Cameron Reil­ly: for some crazy [00:12:20] rea­son.

[00:12:20] Tony Kynas­ton: It is amaz­ing how the mar­ket’s ignor­ing all the stuff, isn’t it? We’re get­ting close to highs again.

[00:12:25] Cameron Reil­ly: It drops and then it just comes back a

[00:12:28] Tony Kynas­ton: Hmm.

[00:12:28] Cameron Reil­ly: and it’s like, ah, [00:12:30] you know, how bad could it be?

[00:12:32] Tony Kynas­ton: But it’s not just shrug­ging off Don­ald Trump and the Mid­dle East con­flicts, it’s shrug­ging off high­er inter­est rates and, and, [00:12:40] you know, high­er infla­tion going for­ward too, which is very sur­pris­ing.

[00:12:43] Cameron Reil­ly: High­er inter­est rates, like sup­ply dif­fi­cul­ties, not

[00:12:47] Tony Kynas­ton: Mm-hmm.

[00:12:48] Cameron Reil­ly: prod­ucts, but with [00:12:50] fer­til­iz­er.

[00:12:50] Tony Kynas­ton: Yeah.

[00:12:51] Cameron Reil­ly: econ­o­mist, every polit­i­cal leader around the world says, yeah, we’re, this is gonna be real­ly, real­ly bad. Gird your loins the mar­ket’s [00:13:00] like, nah, it’ll be great.

[00:13:02] Tony Kynas­ton: Win­ning.

[00:13:03] Cameron Reil­ly: We’re all, The, the all odd, the top of the all odds was in, on the [00:13:10] 23rd of Feb­ru­ary, 2026, uh, at, uh, 9, 4, 3 5. We’re [00:13:20] cur­rent­ly at 9 1 7 4, so it’s as high as it has been. Like the only time it’s been above that. I think it got above that in [00:13:30] August last year. It’s sort of been hov­er­ing around the 9 2, 9 3 lev­el since then. So yeah, almost record highs. Um. [00:13:40] just, I don’t

[00:13:41] Tony Kynas­ton: It’s hard to explain, isn’t it? Yeah, I agree.

[00:13:43] Cameron Reil­ly: I don’t know, you know, what’s going on.

[00:13:45] Cameron Reil­ly: You’re a smart, but to me, I just look at it. Go, this is bonkers. Any­way,

[00:13:48] Tony Kynas­ton: it does to me [00:13:50] too.

[00:13:50] Cameron Reil­ly: let’s talk about, uh, port­fo­lio per­for­mance. While we are here, the dum­my port­fo­lio, finan­cial year to date is [00:14:00] up 19% ver­sus the, uh, index up So we’re doing two and a half [00:14:10] times, uh, for this finan­cial year. Um, since incep­tion, um, we’re up 15 [00:14:20] ver­sus nine. Um, so not quite dou­ble mar­ket. And that’s not actu­al­ly ful­ly incep­tion. That’s from March, not from Sep­tem­ber. If I went from Sep­tem­ber, it’d be a lit­tle bit dif­fer­ent, [00:14:30] but I can’t be both­ered. I’ll do five years, um, to make it round num­bers. years we’re up 16% ver­sus nine. That’s pret­ty much

[00:14:38] Tony Kynas­ton: Hmm.

[00:14:39] Cameron Reil­ly: So there you go. [00:14:40] Um, the light port­fo­lio group, dif­fer­ent per­spec­tive. Uh, this finan­cial year [00:14:50] up, 27% ver­sus eight for the index and all time for the light port­fo­lio. [00:15:00] Up 19% ver­sus 1119 point a half ver­sus 10.8 real­ly. So dou­ble mar­ket, um, for the light [00:15:10] port­fo­lios. And that’s the four port­fo­lios com­bined, which togeth­er have not quite 80 stocks, prob­a­bly some­where between 60 and 80 stocks. [00:15:20] Um.

[00:15:20] Tony Kynas­ton: I find that amaz­ing to have a large port­fo­lio doing that and that kind of gives me, you know, it’s some­thing I’ve nev­er real­ly tried to do. So it’s, um, a new [00:15:30] learn­ing for me that you can have a large port­fo­lio and still go out per­for­mance.

[00:15:33] Cameron Reil­ly: And the first port­fo­lio that I set up, the one that start­ed in Feb­ru­ary, 2022, just as every­thing went to [00:15:40] shit is still under­wa­ter. It’s, um, 7.2% per annum over that peri­od of

[00:15:46] Tony Kynas­ton: I right.

[00:15:48] Cameron Reil­ly: [00:15:50] 9.32% for the s uh, the SPDR. It was, it did catch up at one stage, but it’s fall­en again, uh, in the last month or so. So the [00:16:00] rest have to make up for that.

[00:16:01] Cameron Reil­ly: Um,

[00:16:02] Tony Kynas­ton: Yeah.

[00:16:02] Cameron Reil­ly: port­fo­lio is up 15 ver­sus nine. third port­fo­lio is up [00:16:10] 23 ver­sus 11. And the

[00:16:14] Tony Kynas­ton: Hmm.

[00:16:14] Cameron Reil­ly: port­fo­lio, which start­ed in Novem­ber [00:16:20] 22, is up 23 ver­sus 11. So, uh, yeah, I mean if you took out that first one, those oth­er three are [00:16:30] real­ly doing quite well. But there

[00:16:31] Tony Kynas­ton: Yeah, but you can’t, that’s a, that’s a learn­ing in itself too, is a, um, well, like, they call it dol­lar cost aver­ag­ing, but don’t put all your eggs in the bas­ket on day [00:16:40] one. Um. Start. Start to build a port­fo­lio a lit­tle bit over time and try and spread the risk of it being the worst time to start invest­ing.

[00:16:49] Cameron Reil­ly: [00:16:50] Well, I would’ve added like one or two stocks a week back then, so it would’ve tak­en me a few months to build up, but I. Yeah, I mean, so if any­one fol­lowed that [00:17:00] port­fo­lio exact­ly, they’re up, but they’re under­per­form­ing the index. Um, if it was an exact copy, but yeah. Any­way, it’s tim­ing, like [00:17:10] exact­ly the same strat­e­gy for all four port­fo­lios and the W port­fo­lio and you know, it was just a like at one point in by EP, [00:17:20] by, sor­ry, June, 2023, the light that the first light port­fo­lio was down 10% and the index was up five, so we were under

[00:17:28] Tony Kynas­ton: Mm.

[00:17:29] Cameron Reil­ly: by [00:17:30] 15% at one stage. We’ve caught back up since then, so that’s not too bad, but yeah, it was a bad start. Any­way, there you go. That’s my port­fo­lio [00:17:40] updates. Every­thing’s look­ing good. Let’s get into some news Q, reject­ed Hori­zon’s offer. Tony, they put out a thing with a just big no [00:17:50] Says no.

[00:17:53] Tony Kynas­ton: Every time I hear QI think bring it back. Bring it back safe­ly, James.

[00:17:59] Cameron Reil­ly: [00:18:00] The inde­pen­dent board com­mit­tee unan­i­mous­ly rec­om­mends that you reject the offer from Hori­zon to reject the offer. Sim­ply take no action. [00:18:10] So they con­sid­er that the offer is inad­e­quate. The tim­ing of the offer offer is oppor­tunis­tic, coin­cid­ing with Hori­zon shares trad­ing [00:18:20] at a 10 year high. That’d be, I mean, it’d be a bit of a shame if the offer was an offer.

[00:18:25] Cameron Reil­ly: Was­n’t oppor­tunis­tic.

[00:18:26] Tony Kynas­ton: Yeah. For Hori­zon share­hold­ers. Yeah,

[00:18:28] Cameron Reil­ly: Yeah. Isn’t that [00:18:30] why you do things? ’cause it’s

[00:18:31] Tony Kynas­ton: cor­rect.

[00:18:32] Cameron Reil­ly: Every­thing we buy, we buy because it’s oppor­tunis­tic, right? We

[00:18:36] Tony Kynas­ton: Right.

[00:18:36] Cameron Reil­ly: cheap. We’ll buy it. Uh, based on objec­tive [00:18:40] com­par­a­tive mea­sures, the offer appears to under­val­ue Q Rel­a­tive to Hori­zon Q.

[00:18:45] Cameron Reil­ly: Share­hold­ers who accept the offer would suf­fer sig­nif­i­cant dilu­tion of their expo­sure to [00:18:50] Q’s key assets. Poten­tial syn­er­gies are like­ly under­stat­ed by hori­zon and the offer ascribes min­i­mal val­ue to them, and it goes on. Did you have any [00:19:00] thoughts on, uh, the rejec­tion.

[00:19:01] Tony Kynas­ton: Uh, I have I, not so much on the rejec­tion, but what to do in this sit­u­a­tion. So it’s Q, which is CUE ener­gy, um, [00:19:10] is on the buy list. Hori­zon. Well, I think it’s still on the buy list last time I looked. Uh, but we put a, I think we put a hold on, um, buy­ing Q because it was under [00:19:20] takeover. So the ques­tion in my mind is, do we take that hold off now because, um, they’ve reject­ed the hori­zon offer?

[00:19:27] Tony Kynas­ton: Or do we still say it’s a takeover sit­u­a­tion? [00:19:30] Um, ’cause takeover sit­u­a­tions have addi­tion­al upside and addi­tion­al risk. It’s, it’s pos­si­ble. Q are play­ing a. A savvy game and they’re [00:19:40] forc­ing Hori­zon to come back with a high­er offer. But it’s also pos­si­ble that Hori­zon walks away and says they can’t increase their offer.

[00:19:47] Tony Kynas­ton: In which case, if there’s any, um, [00:19:50] takeover pre­mi­um built into the queue share price, it’ll with­draw a lit­tle bit. I, I’m tempt­ed to say, if any­one, if, if I was look­ing to buy a stock and Q was the next thing to [00:20:00] buy, I prob­a­bly would buy it in this sit­u­a­tion. ’cause it’s, um, ben­e­fit ben­e­fit­ing from the high or price and it’s on the buy list and it looks good from a QAV per­spec­tive, but there [00:20:10] is just a sad risk that who knows what’s gonna hap­pen with the takeover.

[00:20:13] Cameron Reil­ly: Okay, so you think I should, uh, take that note off of Q

[00:20:19] Tony Kynas­ton: [00:20:20] I think so. Look, I don’t real­ly have much expe­ri­ence in this sit­u­a­tion. Um, I can’t think of a takeover for a stock that’s on the buy list that’s gone through [00:20:30] a, um, a com­plete rejec­tion. Nor­mal­ly, I think in. The major­i­ty of cas­es I can think of, the board tries to get the suit­ed to up their [00:20:40] offer, but it does so by engag­ing.

[00:20:41] Tony Kynas­ton: And they might go through a peri­od of due dili­gence or they might say, you know, the board accepts the offer or rec­om­mends accep­tance in the absence of a high­er offer. That [00:20:50] kind of thing.

[00:20:50] Cameron Reil­ly: hmm.

[00:20:51] Tony Kynas­ton: yes, I can’t think of a case for a long time for a stock on the buy list any­way, where they’ve said, reject the offer and do [00:21:00] noth­ing.

[00:21:00] Cameron Reil­ly: Well, for what it’s worth was­n’t actu­al­ly on my buy list this week.

[00:21:05] Tony Kynas­ton: Okay.

[00:21:06] Cameron Reil­ly: and I’m try­ing to fig­ure out why not. Uh, [00:21:10] QAV score 0.068.

[00:21:13] Tony Kynas­ton: Mm.

[00:21:13] Cameron Reil­ly: missed the cut­off qual­i­ty score. 36.4. Whoa. [00:21:20] So, you know,

[00:21:20] Tony Kynas­ton: Okay.

[00:21:21] Cameron Reil­ly: long way from our buy list at the moment.

[00:21:23] Tony Kynas­ton: Okay. Sor­ry about that. It was on the buy list recent­ly?

[00:21:25] Cameron Reil­ly: Yeah. where it fell off.

[00:21:28] Tony Kynas­ton: Yeah. Okay. Well, it does­n’t, does­n’t mat­ter [00:21:30] then, but yeah. I’m tempt­ed to take, take the hold off until some­thing devel­ops.

[00:21:34] Cameron Reil­ly: yeah. At the end of March. It was on our buy list all through March and Feb­ru­ary. [00:21:40] So is the share price gone up?

[00:21:44] Tony Kynas­ton: it has.

[00:21:46] Cameron Reil­ly: Oh yeah. Yeah. It has. [00:21:50] It jumped from 11 cents in Feb­ru­ary to 16 cents, uh, 15 now. So yeah, I think that, [00:22:00] uh, put the Kosh on it from a buy list per­spec­tive by the looks of it. Okay, well I’ll take that note off, but it prob­a­bly won’t be on the buy [00:22:10] list for a bit any­way, unless the price comes back down. BOQ announces cap­i­tal part­ner­ship with Chal­lenger. This is on the [00:22:20] 7th of April. Bank of Queens­land today announces a strate­gic cap­i­tal part­ner­ship with Chal­lenger Lim­it­ed Mark­ing a fur­ther step in its trans­for­ma­tion to a sim­pler [00:22:30] spe­cial­ist bank. The part­ner­ship with Chal­lenger includes a whole of loan sale and a for­ward flow arrange­ment for equip­ment finance assets that will fur­ther [00:22:40] opti­mize Bo Q’s fund­ing base and sup­port the accel­er­a­tion of the group’s ambi­tion to ser­vice more equip­ment finance cus­tomers, par­tic­u­lar­ly in [00:22:50] the small to medi­um busi­ness sec­tor. I under­stand pret­ty much none of those words, so, uh.

[00:22:58] Tony Kynas­ton: He’s a bit of a word sal­ad, [00:23:00] but, um,

[00:23:00] Cameron Reil­ly: Yeah.

[00:23:01] Tony Kynas­ton: it’s inter­est­ing from two points of view. ’cause Chal­lenger was try­ing to do this with I think Pep­per mon­ey, which was on the buy list for a while. They were try­ing to take it over in part­ner­ship with [00:23:10] KKR to, um, to be the fun­der of the loan book for equip­ment loans for pep­per mon­ey.

[00:23:17] Tony Kynas­ton: And that, um, fell over. And [00:23:20] so very quick­ly they’ve done a sim­i­lar deal with bank at Queens­land. It, it, it’s inter­est­ing from the, for a sec­ond point of view because of what’s hap­pen­ing in the bank­ing and insur­ance [00:23:30] indus­tries and it’s kind of this arbi­trage between reg­u­la­tions and, and I dun­no a whole heap about it, but I’ll, I’ll try and sum­ma­rize it.

[00:23:37] Tony Kynas­ton: So banks are reg­u­lat­ed by a PR [00:23:40] and they have to hold cer­tain. Cap­i­tal. Well, there’s cer­tain rules around lend­ing to, to peo­ple so that they, um, remain robust. Um. [00:23:50] Insur­ance com­pa­nies have a dif­fer­ent set of reg­u­la­tions. I’m not sure if they’re also cov­ered by a or by some­body else. And those reg­u­la­tions are around what they [00:24:00] do with their float, which is, we would’ve talked about that with Berk­shire Hath­away in mind.

[00:24:05] Tony Kynas­ton: War­ren Buf­fett made a lot of mon­ey out of tak­ing the float, which [00:24:10] is the dif­fer­ence between the pre­mi­ums and the claims. Um, so all that mon­ey slash­es around inside an insur­ance com­pa­ny and needs to be invest­ed, um, and then needs to be able [00:24:20] to be pulled out again and, and used for claims pay­ments in the future.

[00:24:25] Tony Kynas­ton: So, um, chal­lenger, it’s not, whilst it’s not an insur­ance com­pa­ny and we [00:24:30] did a, I did the pulled pork on them recent­ly. They’re, they kind of have attrib­ut­es of an insur­ance com­pa­ny, so they’re pro­vid­ing annu­ities. And so an insur­ance com­pa­ny, you pay them [00:24:40] pre­mi­ums and if you die, sud­den­ly you get a pay­out.

[00:24:43] Tony Kynas­ton: This is the reverse with chal­lenges. So they, you, you give ’em the lump sum at, at the [00:24:50] front, and then they give you the div­i­dends, like the pre­mi­ums, um, every year on a fixed basis. And when you die that ceas­es or, or what­ev­er the fixed term is. You’ve agreed with [00:25:00] chal­lenger, but that’s kind of like insur­ance in reverse.

[00:25:03] Tony Kynas­ton: And I, I think it’s cov­ered by the insur­ance, um, rules around float. But there will cer­tain­ly be rules on [00:25:10] Chal­lenger about what it needs to invest in to make sure it can con­tin­ue to pay annu­ities that it’s, um, con­tract­ed to do. There’s a, there’s an arbi­trage between the bank rules on [00:25:20] lend­ing to peo­ple on and bor­row­ing to do that and the insur­ance rules, which means that, uh, some­one like the Bank of Queens­land can go to Chal­lenger and say, [00:25:30] Hey.

[00:25:30] Tony Kynas­ton: Um, say the inter­est rate at the moment, you can get in the mar­ket’s 4%, we’ll give you five, um, and then we’ll lend it out to our cus­tomers at [00:25:40] sev­en and we’ll make the same mar­gin we would’ve made if we were hav­ing to put bonds into the mar­ket or take deposits and then, um, and then use that mon­ey to, to, um, lend [00:25:50] to our cus­tomers.

[00:25:50] Tony Kynas­ton: So it’s just a, a dif­fer­ent fund­ing mod­el for the Bank of Queens­land, but it’s, it’s hap­pen­ing around the world in more and more places. And I know it’s a, it’s becom­ing a [00:26:00] big deal in Amer­i­ca, just, just whether this sort of arbi­trage is the, the right use of the rules, whether it’s gonna lead to prob­lems down the track, or whether it’s com­plete­ly okay.

[00:26:09] Tony Kynas­ton: But you’ve got [00:26:10] the, essen­tial­ly the same thing going on by two dif­fer­ent types of com­pa­nies and the two dif­fer­ent types of reg­u­la­tions. Um, and that’s what Bank of Queens­land and Chal­lenger are using to their [00:26:20] advan­tage at the moment.

[00:26:21] Cameron Reil­ly: Right. So does it have any impact on us from a QAV per­spec­tive?

[00:26:28] Tony Kynas­ton: I don’t think so. No. It may [00:26:30] improve the QAV score for Bank of Queens­land, um, because, uh, they’ll, they pos­si­bly have bet­ter mar­gins under this arrange­ment, um, on, at least on [00:26:40] that lend­ing book part of it. But I know, I know the share price went up when it was announced, so the mar­ket likes it going for­ward as well.

[00:26:47] Cameron Reil­ly: Well, I [00:26:50] dun­no if the share price went up that much. If you look at it over the last three months, the share price, are you talk­ing about BOQ or chal­lenger?

[00:26:58] Tony Kynas­ton: BOQ?

[00:26:59] Cameron Reil­ly: Oh, [00:27:00] BOQ. Yeah.

[00:27:00] Tony Kynas­ton: Yeah.

[00:27:01] Cameron Reil­ly: It did jump. Yeah. Okay. And I think we hold BOQ in some port­fo­lios. Where’s

[00:27:09] Tony Kynas­ton: [00:27:10] think though, like if you are a, if you’re a gov­ern­ment reg­u­la­tor, if you’re a a and you see a bank and you say you’ve got all these cap­i­tal ratios to make sure that there’s not gonna be a, um, a role on the bank [00:27:20] and it can sur­vive if there is and all this kind of thing. Um, but you’re sort of get­ting around those by out­sourc­ing that risk to insur­ance com­pa­ny, which has lacks of rules, whether that’s a good [00:27:30] thing or not.

[00:27:30] Tony Kynas­ton: So

[00:27:31] Cameron Reil­ly: Hmm.

[00:27:31] Tony Kynas­ton: it’s poten­tial­ly, it won’t hap­pen quick­ly, but poten­tial­ly there might be a re jug­gling of the rules to, to account for this, [00:27:40] but it’s an oppor­tu­ni­ty at the moment, espe­cial­ly for the small­er banks like, um, uh, Bendi­go, um, bank of Queens­land, et cetera, which have [00:27:50] had more oner­ous con­di­tions put on them by a PR because APRA sees them as being a high­er risk of, of fail­ing than the big­ger banks.

[00:27:57] Cameron Reil­ly: Yeah.

[00:27:58] Tony Kynas­ton: Mm.

[00:27:59] Cameron Reil­ly: [00:28:00] We don’t hold BOQ or Chal­lenger in any of the QAV port­fo­lios, so there you go.

[00:28:06] Tony Kynas­ton: I should declare, I think, uh, my wife owns some BOQ shares still [00:28:10] from when she was on their board years ago.

[00:28:12] Cameron Reil­ly: Well, we’ve got a cou­ple of C‑level res­ig­na­tions to cov­er briefly. Tony one is fair­ly innocu­ous, I think [00:28:20] Select Har­vests. The Armand com­pa­ny you did a Paul Pork on

[00:28:24] Tony Kynas­ton: Mm-hmm.

[00:28:25] Cameron Reil­ly: their Chief Exec­u­tive Offi­cer, David Sur­vey­or. [00:28:30] Announced on the 9th of April that he was gonna resign. And, uh, I think that’s a nice, uh, tran­si­tion.

[00:28:38] Cameron Reil­ly: He will remain with the [00:28:40] com­pa­ny to work through his six month notice peri­od and assist with an order­ly tran­si­tion. So noth­ing to see here. Um, let’s see how the share [00:28:50] price react­ed to that news. Uh, it dipped. Oh, that, that warms the heart, does­n’t it? Eh, good [00:29:00] luck. Yeah, well done. Mr. Sur­vey­or. Peo­ple are sad that you’re leav­ing, obvi­ous­ly a safe pair of hands.

[00:29:05] Cameron Reil­ly: On the oth­er hand, Ter­ra Comm, [00:29:10] I picked up yes­ter­day that the Chief Finan­cial Offi­cer, Ms. Jen Williams, who’d only been with the com­pa­ny, uh, only been in the posi­tion any­way since the 7th of [00:29:20] August, had resigned effec­tive imme­di­ate­ly. And then I noticed that the day before that the man­ag­ing direc­tor, Mr.

[00:29:26] Cameron Reil­ly: Dan­ny McCarthy also. Resigned [00:29:30] to con­clude on the 30th of April, 2026,

[00:29:35] Tony Kynas­ton: Which is very short notice.

[00:29:37] Cameron Reil­ly: Well, it says he steps down from his role as [00:29:40] MD imme­di­ate­ly

[00:29:41] Tony Kynas­ton: Hmm.

[00:29:41] Cameron Reil­ly: and will ensure a order­ly han­dover through to the 30th of April. There. Finan­cial report came out on the 27th of [00:29:50] Feb­ru­ary, so, you know, it was like a month lat­er, both left. Uh, what do you, what do you read in that?

[00:29:59] Tony Kynas­ton: It, it is [00:30:00] hard to know ’cause it’s a small com­pa­ny. It’s not much cov­er­age, but it does­n’t look good. CEO and CFO resign­ing. Um, and sort of, it would seem unex­pect­ed­ly ’cause [00:30:10] it’s imme­di­ate and they, he’s only hang­ing, they MD’s only hang­ing around until the 30th of April. Even though it says to help an odd­ly take, uh, han­dover like that, [00:30:20] if that will hap­pen, um, they’re prob­a­bly gonna have to start look­ing for a CEO to replace him.

[00:30:25] Tony Kynas­ton: It’ll take a lot longer than that unless there’s some­one trained up in the wings. But again, I don’t [00:30:30] know much about the com­pa­ny and much about these peo­ple. Um, one poten­tial rea­son is that they’re going to a com­peti­tor. [00:30:40] Um, and, and some­times, uh, you know, like a CFO will be loy­al to the CEO, so she’s going to, um, but yeah, I’m read­ing a [00:30:50] lot into the teas here, but on the, on the sur­face of it, it does­n’t look good.

[00:30:53] Cameron Reil­ly: No, it looks a lit­tle bit sala­cious. Um. Yeah, well, [00:31:00] they’re, uh, Bris­bane based. Uh, so I’ll, I’ll, you know, I’m so con­nect­ed to the, uh, Bri, the Bris­bane, uh,

[00:31:09] Tony Kynas­ton: Yeah,

[00:31:09] Cameron Reil­ly: [00:31:10] and resources com­mu­ni­ty. I’ll, I’ll, uh, put my ear to the ground, see what’s, see what’s hap­pen­ing.

[00:31:15] Tony Kynas­ton: hang around the Eagle, Eagle Street, and the, what’s the restau­rant [00:31:20] down there? Pier One, I think it was. Yeah.

[00:31:22] Cameron Reil­ly: yeah, yeah, yeah. I’ll find out what’s going on.

[00:31:24] Cameron Reil­ly: Don’t you wor­ry. Um, do we own TER? Let me [00:31:30] see. Are they on the buy list? Don’t think they’re on the

[00:31:32] Tony Kynas­ton: No,

[00:31:32] Cameron Reil­ly: list.

[00:31:32] Tony Kynas­ton: a long time. Did­n’t go on there years ago.

[00:31:35] Cameron Reil­ly: Right. Let me see if I hold them. TER? [00:31:40] No, no TER either incon­se­quen­tial. These are to

[00:31:47] Tony Kynas­ton: Mm-hmm.

[00:31:48] Cameron Reil­ly: What else have I [00:31:50] got? Uh, an sent me an email I got today. Hi Kim. I noticed last week that both EDU and RRL on your lat­est spread­sheet did­n’t show a div­i­dend and Stock Doc­tor even though [00:32:00] they were clear­ly pay­ing div­i­dends. sent an email through to Stock Doc­tor and they got back to me. Today, their morn­ing staff feed is the issue and it’s now been dis­cov­ered that it is an issue for [00:32:10] 100 or more div­i­dend pay­ing stocks.

[00:32:13] Tony Kynas­ton: Wow.

[00:32:14] Cameron Reil­ly: uses the same feed and they don’t have the div­i­dends list­ed cor­rect­ly either. I’ve been advised [00:32:20] Stock Doc­tor have now man­u­al­ly processed the div­i­dends onto their plat­form for EDU and RRL for the last half, but until the issue is fixed, it might be some­thing to watch. [00:32:30] Cheers. Ang Well that’s a great pick­up,

[00:32:33] Tony Kynas­ton: It is well done.

[00:32:35] Cameron Reil­ly: That’s a big issue for me because the first thing I check if some­thing breach­es [00:32:40] a sell line is the div­i­dends in

[00:32:42] Tony Kynas­ton: Mm.

[00:32:42] Cameron Reil­ly: Doc­tor to see if I need to fac­tor in a some­thing

[00:32:45] Tony Kynas­ton: Yeah.

[00:32:45] Cameron Reil­ly: diviv. And if they’re not report­ing it,

[00:32:47] Tony Kynas­ton: Yeah. Wow.

[00:32:49] Cameron Reil­ly: could be sell­ing stuff [00:32:50] I did­n’t need to sell.

[00:32:50] Cameron Reil­ly: For­tu­nate­ly I haven’t had to sell much stuff for LA uh, uh, late­ly, so I don’t think it’s been a, an issue. But, um, yeah, good pick­up an so I [00:33:00] dun­no what we do about that, I guess. Yeah, you’re gonna sell some­thing, maybe check their annu­al report [00:33:10] for div­i­dends or some­thing before you press the but­ton.

[00:33:13] Tony Kynas­ton: Yeah. Yeah. But well, well, there should be a div­i­dend announce­ment. You can search as well. Check for [00:33:20] that.

[00:33:20] Cameron Reil­ly: Oh, Stock Doc­tor may have those. Just not have it in the finan­cials, you think?

[00:33:25] Tony Kynas­ton: Yeah.

[00:33:26] Cameron Reil­ly: Right. Okay. [00:33:30] So check the announce­ments page. I’m look­ing for div­i­dend div­i­dend announce­ments in [00:33:40] RRL hmm. Div­i­dend dis­tri­b­u­tion 19th of Feb­ru­ary. Yeah. Okay. [00:33:50] Good. Good. Thank you Ang for bring­ing that to our atten­tion. What have you got, TK, on your list of

[00:33:56] Tony Kynas­ton: Well, speak­ing of EDUI was going to, um, men­tion that they’ve [00:34:00] become a star stock in Stock Doc­tor, and I think they’re back on the B list. Um, last week and this week, I think from mem­o­ry.

[00:34:08] Cameron Reil­ly: They were.

[00:34:09] Tony Kynas­ton: Yeah. [00:34:10] So I thought, um, our friend who’s been on the show Key and Rin did a good analy­sis. This is back on 7th of April when they [00:34:20] became a star growth and star income stock.

[00:34:24] Tony Kynas­ton: And, um, he says, fol­low­ing our analy­sis of EDU hold­ings, we ini­ti­ate cov­er­age on the [00:34:30] ter­tiary edu­ca­tion provider as both a star growth and star income stock. So I’ve done a pulled pork on EDU, um, from last year, I think, so [00:34:40] peo­ple can look that up in the pod­cast list. But, uh, Kien goes on to say, EDU pro­vides ter­tiary edu­ca­tion through two divi­sions, icon Insti­tute.

[00:34:49] Tony Kynas­ton: [00:34:50] IKON, which does high­er edu­ca­tion degrees such as coun­sel­ing and teach­ing, and Aus­tralian Learn­ing Group, which is a voca­tion­al train­er. The busi­ness has [00:35:00] delib­er­ate­ly shift­ed towards high­er edu­ca­tion, which now con­tributes 80% of rev­enue. This is impor­tant because high­er edu­ca­tion cours­es run for longer, gen­er­ate high­er fees per [00:35:10] stu­dent, and pro­vide more pre­dictable income streams.

[00:35:13] Tony Kynas­ton: The com­pa­ny is led by founder and CEO Adam Davis, who retains a mean­ing­ful equi­ty stake, ensur­ing [00:35:20] a strong align­ment with share­hold­er inter­ests. Goes on to say that the. FY 25 results were what, um, trig­gered this, uh, uh, [00:35:30] in, uh, EDU becom­ing a star growth stock. It says FY 25 marked a sig­nif­i­cant step up in per­for­mance.

[00:35:37] Tony Kynas­ton: Rev­enue increased 95%. Net [00:35:40] prof­it rose to 14.8 mil­lion from 2.6 mil­lion, and, uh, prof­itabil­i­ty improved sharply with net prof­it mar­gins increas­ing to 18% [00:35:50] from 5.6%. Return on equi­ty is now 85% from 21% the pri­or year, reflect­ing strong enroll­ment growth in oper­at­ing [00:36:00] lever­age. Impor­tant­ly, the com­pa­ny paid a 3 cents ful­ly franked final div­i­dend, tak­ing the full year div­i­dend of 4 cents, a equat­ing to a gross div­i­dend yield of [00:36:10] 7.5%.

[00:36:11] Tony Kynas­ton: The div­i­dend appears sus­tain­able, sup­port­ed by a mod­est pay­out ratio of 30% and strong free cash flow gen­er­a­tion com­fort­ably exceed­ing [00:36:20] dis­tri­b­u­tions. Mean­while, the bal­ance sheet remains strong with EDU, end­ing the year debt free and hold­ing $18.5 mil­lion in cash, et cetera, et cetera. [00:36:30] They spoke about the um, div­i­dend there.

[00:36:33] Tony Kynas­ton: They should have picked it up them­selves, I guess, should­n’t they?

[00:36:35] Cameron Reil­ly: You would think

[00:36:37] Tony Kynas­ton: Yeah. [00:36:40] Yeah. So that’s EDU, and it seems like they’ve had a good result and they’re back on our buy list as well.

[00:36:45] Cameron Reil­ly: they are. I could­n’t buy them. I think I went to buy them [00:36:50] yes­ter­day, but they were down. Every­thing was down yes­ter­day when, when I went to try and buy stuff. But I man­aged to buy some­thing today, and I think coin­ci­den­tal­ly, it’s the com­pa­ny you’re doing a [00:37:00] pulled pork on.

[00:37:00] Tony Kynas­ton: Oh, you go. You got ahead of it.

[00:37:02] Cameron Reil­ly: Yeah, I do have two. We do hold EDU in two port­fo­lios though, um, added it to one of the light [00:37:10] port­fo­lios in Sep­tem­ber last year.

[00:37:11] Cameron Reil­ly: It’s up 53% since then, but then I added it to the dum­my port­fo­lio on the 8th of April. It [00:37:20] was a week ago. It’s down 3% since then. But, uh, doing well in the dum­my in the light port­fo­lio, 53%

[00:37:28] Tony Kynas­ton: run.

[00:37:29] Cameron Reil­ly: six [00:37:30] months. It’s

[00:37:30] Tony Kynas­ton: Mm, pret­ty good. So I’m doing a pulled pork on Pete PPC is the code

[00:37:38] Cameron Reil­ly: yeah.

[00:37:39] Tony Kynas­ton: and that’s [00:37:40] fol­low­ing a request from, uh. Bye, Dave from Youi. So thanks Dave. Uh, it’s a lit­tle way down the buy list, but it’s a, it’s a buy at the moment, so it’s worth [00:37:50] talk­ing about. So who are Pete? They’re a Perth based prop­er­ty devel­op­er.

[00:37:56] Tony Kynas­ton: Um, and again, I think I said last week that we’re [00:38:00] start­ing to see a bit of a theme emerge. Uh, a cou­ple of, uh, oth­er prop­er­ty devel­op­ers, Fin­bar and Fleet­wood, both, um, pulled porks [00:38:10] from, um, recent times. They’re, they have been on the buy list, so I don’t think either of them are at the moment. Fin­bar may have come back.

[00:38:16] Tony Kynas­ton: Fin­bar is based in Perth, as is Pete, and Fleet­wood I think [00:38:20] is based in Syd­ney. Uh, so peak oper­ate nation­al­ly, but they do derive a lot of rev­enue from West­ern Aus­tralia. And as I [00:38:30] said, when I did the Fin­bar pulled Pork West­ern Aus­trali­a’s going through a, uh, boom time at the moment with, um, lots of jobs because of the, um, resource indus­try [00:38:40] and lots of pop­u­la­tion migra­tion to those jobs.

[00:38:43] Tony Kynas­ton: Uh, and it’s, it’s doing very well. State gov­ern­ments, um. Cashed up and, uh, it’s [00:38:50] a, it seems to be a pret­ty good place to live, attract­ing lots of peo­ple. Pete’s an inter­est­ing com­pa­ny. It was formed 130 years ago, back in 1895, [00:39:00] and it makes it one of the old­est com­pa­nies, one of, cer­tain­ly one of the old­est prop­er­ty com­pa­nies in Aus­tralia.

[00:39:05] Tony Kynas­ton: It was found­ed by James Thomas, Pete in 1895, [00:39:10] Eng­lish born sur­vey­or and drafts­man. He moved to Perth dur­ing the gold brush era when the city was expand­ed, expand­ing rapid­ly, and he was [00:39:20] instru­men­tal in sub­di­vid­ing much of what we now know as Perth, um, espe­cial­ly in the met­ro­pol­i­tan areas. And he, for peo­ple who live over there, he worked on ear­li­er estate in places like [00:39:30] Kaun­da, bury Hill, and High Ham, or High Wick­ham.

[00:39:35] Tony Kynas­ton: I’m not famil­iar with Perth. I for­give my pro­nun­ci­a­tion. One of the, [00:39:40] um, one of the big things to note about. Pete is its his­to­ry as being a syn­di­ca­tor. Uh, and it’s real­ly pio­neered retail land [00:39:50] syn­di­ca­tion in Aus­tralia. And what that means is that, uh, they allow investors to, uh, pool their mon­ey to buy and devel­op, devel­op large tracks of [00:40:00] land, and, uh, essen­tial­ly via either a com­pa­ny or a trust type of struc­ture, which Pete man­ages, um, does the work [00:40:10] and then pays out, uh, the results after tak­ing fees.

[00:40:13] Tony Kynas­ton: And the ben­e­fit of that is it’s a cap­i­tal light struc­ture. So Pete aren’t hav­ing to go and, uh, raise mon­ey [00:40:20] and then do the sub­di­vi­sion and take the risk on their own bal­ance sheet. They’re actu­al­ly doing it in an arm’s length and tak­ing the fees involved in doing that. Um, [00:40:30] I guess, uh. To, to look a bit more back at their his­to­ry.

[00:40:36] Tony Kynas­ton: Um, after James Pete passed away in 1930 [00:40:40] fives, his son Cyril, earnest Pete took the reigns and he suc­cess­ful­ly steered the com­pa­ny through the Great Depres­sion and World War ii, which in no mean [00:40:50] feat and under his lead­er­ship, the firm moved beyond Sim­ple land sales and began focus focus­ing more heav­i­ly on the large scale res­i­den­tial sub­di­vi­sions that would [00:41:00] become their hall­mark.

[00:41:01] Tony Kynas­ton: Uh, and then even­tu­al­ly Cyril’s son, Lind­sey JP, joined the busi­ness and main­tained the fam­i­ly lega­cy for, for [00:41:10] decades. Uh, well, James, Pete start­ed the idea, it was dur­ing the mid to late 20th cen­tu­ry that the com­pa­ny per­fect­ed the land syn­di­ca­tion mod­el and they real­ized instead of the [00:41:20] com­pa­ny tak­ing all the risks, they could invite pri­vate investors to buy into spe­cif­ic land projects.

[00:41:26] Tony Kynas­ton: So, uh, that was pio­neered. [00:41:30] And the oth­er side of that, um. Type of struc­tures. It allowed them to expand quite quick­ly because they weren’t hav­ing to go and, um, raise mon­ey [00:41:40] against col­lat­er­al and then take the risk and then wait many years for the devel­op­ment cycle to go through. They could raise mon­ey quick­ly, put it into a trust or a com­pa­ny, and then raise it [00:41:50] again and again and again if they had the right, uh, land avail­able for devel­op­ment.

[00:41:54] Tony Kynas­ton: So it allowed ’em to grow quick­ly. Um, in 2004, the com­pa­ny, um, [00:42:00] list­ed on the ASX and shift­ed away from being a fam­i­ly run local agency to, uh, more of a, a cor­po­rate, um, [00:42:10] nation­al type com­pa­ny. Uh.

[00:42:13] Tony Kynas­ton: A guy, I should just men­tion, a guy called Tony Lennon, who was still on the board today, joined the com­pa­ny [00:42:20] in the eight­ies and was a dri­ving force behind its expan­sion and also, uh, behind its list­ing. Um, and sort of in the era, sort [00:42:30] of, uh, of, of his tenure, they expand­ed into major projects in, um, the East­ern Seaboard Vic­to­ria and Queens­land in par­tic­u­lar.

[00:42:39] Tony Kynas­ton: [00:42:40] Uh, I wan­na, I guess to go, what can I say about ’em? What, let me, let me explain why I see [00:42:50] Pete as a bit of a dif­fer­ent type of prop­er­ty devel­op­er to say a, um, anoth­er com­pa­ra­ble res­i­den­tial devel­op­er like a Mir­vac or a Stock­land. Um. [00:43:00] The first thing to to note is that often­times prop­er­ty devel­op­ers don’t just stick to res­i­den­tial sub­di­vi­sion.

[00:43:06] Tony Kynas­ton: They’ll do office build­ings or apart­ment tow­ers [00:43:10] like a, a Har­ry Trib in Syd­ney, for exam­ple. Um, but Pete. Pure­ly focus­es on res­i­den­tial land and res­i­den­tial sub­di­vi­sion. And they real­ly focus in the [00:43:20] strat­e­gy is to focus in on, uh, growth cor­ri­dors and to focus on the home first home buy­er’s mar­ket. And they try and make that as attrac­tive as they can [00:43:30] to these peo­ple to move into these growth cor­ri­dors.

[00:43:32] Tony Kynas­ton: And they get a lot of sup­port from gov­ern­ments who are putting in infra­struc­ture into these growth cor­ri­dors. Um, typ­i­cal­ly via, [00:43:40] uh, rail­way sta­tions, for exam­ple, but they could also be via schools or hos­pi­tals, et cetera, being built in the area. So that’s their strat­e­gy, uh, which makes ’em a bit dif­fer­ent to [00:43:50] the Stock­lands and the mx.

[00:43:51] Tony Kynas­ton: Um, they con­trol a mas­sive land bank of over 40,000 lots at the moment, which means that they’ve got a whole decade of work [00:44:00] lined up already, which is anoth­er sort of, um, indi­vid­ual fea­ture for this com­pa­ny. Uh, the, um. [00:44:10] Well, uh, might just list a cou­ple of their devel­op­ments so peo­ple can, if they know of these, um, these places, get a feel for what, uh, this com­pa­ny’s doing.[00:44:20]

[00:44:20] Tony Kynas­ton: So one of them is in Ade­laide, south Aus­tralia. It’s called for Forestville. It’s a $250 mil­lion urban renew­al project. Um, bare­ly two Ks from the Ade­laide CBD. [00:44:30] Um, they’ve put a thing called the Ago­ra Hub in the mid­dle of it. So it’s a mar­ket square with, with, uh, restau­rants and cafes in the super­mar­ket. Um, they [00:44:40] have, uh, includ­ed the pro­vi­sion for EV charg­ing and bat­tery stor­age is stan­dard in the hous­es that are being built.

[00:44:47] Tony Kynas­ton: And they have [00:44:50] put, uh, what they call an urban green school into the devel­op­ment as well, where, where stu­dents can learn about, uh, sus­tain­able food pro­duc­tion and Vir­ginia regen­er­a­tive [00:45:00] a agri­cul­ture. And they do that. In a num­ber of their planned com­mu­ni­ties, they make sure there’s plen­ty of parks and space, and they have even part­nered with the Black Dog Insti­tute to [00:45:10] put in, um, men­tal health, uh, type ser­vices, um, in the, uh, com­mu­ni­ties as well, which, so they’re try­ing to find addi­tion­al ben­e­fits for peo­ple to choose their [00:45:20] devel­op­ments over a com­peti­tor.

[00:45:21] Tony Kynas­ton: Anoth­er one is, um, yanchi in Perth. Uh, so it kicked off in March, 2026, and it’s a 58 hectare [00:45:30] site, uh, which was set to deliv­er 700 homes. And it’s specif­i­cal­ly designed to sur­round the new Yanchi Train sta­tion. Train [00:45:40] sta­tion, which is, um, only recent­ly opened. And it’s, it’s focus­ing on that as being the cen­ter­piece for the, uh, com­mu­ni­ty.

[00:45:46] Tony Kynas­ton: So I can, um, use the train to com­mute. [00:45:50] Uh. Few oth­er ones. Um, gold­en Bay Estate and WA has a sus­tain­abil­i­ty focus on Dara in Bel­con. Inter­est­ing one there part­nered with the Uni­ver­si­ty of [00:46:00] Can­ber­ra. It’s a $1.7 bil­lion project, um, span­ning up to 20 years and will even­tu­al­ly house over 3000 res­i­dences in a unique [00:46:10] cam­pus liv­ing mod­el that inte­grates uni­ver­si­ty facil­i­ties with facil­i­ties, with res­i­den­tial hous­ing.

[00:46:16] Tony Kynas­ton: So a num­ber of real­ly well thought out sub­di­vi­sions going on, [00:46:20] and as I said, usu­al­ly around a cen­tral hub or a train sta­tion or a uni­ver­si­ty or what­ev­er. So that’s their kind of, um, unique approach. Um, the oth­er [00:46:30] secret source for this com­pa­ny is, is, of course, a syn­di­cat­ed mod­el where they’re not, um, tak­ing on bal­ance sheet risk for these sub­di­vi­sions.

[00:46:37] Tony Kynas­ton: And it’s a bit of a dif­fer­ent sort of [00:46:40] mod­el, if I can just spend a minute talk­ing about that. Com­pared to, say, what peo­ple might think of as a, um, a reit, a real estate, um, invest­ment trust, which are some­times list­ed on [00:46:50] the ASX. The way that they run their, um, trusts is that, uh, they tar­get, uh, an inter­nal rate of return, usu­al­ly between [00:47:00] 15 and 20%, and his­tor­i­cal­ly actu­al­ly often­times out­per­form­ing that, um, that some, some of them have returned 23% per annum, some 25% [00:47:10] per annum.

[00:47:10] Tony Kynas­ton: The catch is that, uh, it’s a lumpy pay­back, so the mon­ey isn’t in your pock­et every month the way it could be, or every quar­ter or every half. The way it [00:47:20] could be if it was a list­ed, um, real estate invest­ment trust. So they’re not pay­ing, um, a div­i­dend as such. What they’re doing is they take the mon­ey from the trust and they usu­al­ly [00:47:30] spend the first two or three years.

[00:47:32] Tony Kynas­ton: Um, pro­vid­ing no return and the mon­ey spent on get­ting approvals, sub­di­vid­ing the land, putting in any civ­il works they need to, [00:47:40] like roads or pip­ing or pow­er or what­ev­er. And then they call it the har­vest in years three to sev­en when the land lots are to sold to builders [00:47:50] or they, um, uh, build them­selves and sell to end users.

[00:47:54] Tony Kynas­ton: And the way that the return works is that first of all. If you’re an investor in the trust you get, you get [00:48:00] paid out from the prof­its of these land sales, but you get your mon­ey back first. The orig­i­nal invest­ment gets paid back to you first. And that’s impor­tant because once the orig­i­nal cap­i­tal is back, any [00:48:10] sub­se­quent pay­ments are trig­gered as prof­it, which often come with frank­ing cred­its since the syn­di­ca­tors are already paid cor­po­rate tax.

[00:48:17] Tony Kynas­ton: So, um. Dif­fer­ent style of [00:48:20] invest­ing, but it can be, if it’s deliv­er­ing 25% per annum, real­ly prof­itable for the investors. And it’s obvi­ous­ly good for peak because it allows ’em to do a lot more [00:48:30] work in this space, uh, and buy a lot more land, um, to hold as a land bank than it would if they were try­ing to bor­row mon­ey and do it them­selves.

[00:48:38] Tony Kynas­ton: So, um, I [00:48:40] I found that a very inter­est­ing dimen­sion to this com­pa­ny and, and I think one of the rea­sons they’ve been around for such a long time, I wan­na also just call out that, um, one of my ex-col­leagues is on the [00:48:50] board. I did­n’t real­ize that until I saw. Um, the board struc­ture. When I was doing this research, a lady called Mar­garet Kennedy used to work with me at Shell and then went on to [00:49:00] be part of the Vee­va, um, takeover.

[00:49:03] Tony Kynas­ton: When, uh, when Vee­va bought the Shell Retail oper­a­tions, the prop­er­ty was put into a prop­er­ty trust and Mar­garet was the [00:49:10] CEO of that prop­er­ty trust. And, uh, so has lots of expe­ri­ence in prop­er­ty and, and I always had a lot of respect for her and time for her. And she’s now on the board of, uh, Pete, which was a [00:49:20] kind of a, a nice sur­prise for me to see that lat­est results are real­ly good for this com­pa­ny.

[00:49:25] Tony Kynas­ton: Prof­it was up over a hun­dred per­cent, 102% div­i­dends were up [00:49:30] 136%. Uh, they upgrad­ed their earn­ings guid­ance when they released the results. Uh, they had, uh, a 27% increase on con­tracts on hand gear­ing was [00:49:40] reduced to 24.7%, which was with, which was with­in their desired range. And they actu­al­ly had a buy­back last year, but closed it off at the [00:49:50] lat­est results announce­ment after buy­ing back 4% of shares.

[00:49:53] Tony Kynas­ton: They did­n’t quite get to our 5% thresh­old. Um, the oth­er inter­est­ing thing I found out when I was [00:50:00] research­ing this com­pa­ny was a bit of a news cov­er­age about them in the last six months or so. Uh, and I won­dered whether this com­pa­ny could be in play so. [00:50:10] Uh, the AFR Street Talk col­umn back in Decem­ber revealed that Gold­man Sachs had been hired to, uh, under­take a strate­gic [00:50:20] review of the com­pa­ny.

[00:50:21] Tony Kynas­ton: And the arti­cle says it’s been five months since Perth based res­i­den­tial devel­op­er Pete bowed the share­hold­er pres­sure and board­ing Gold­man Sachs to run a strate­gic [00:50:30] review. Now, Gold­man’s real estate bankers have start­ed court­ing poten­tial buy­ers for the $889 mil­lion busi­ness with the expres­sions of inter­est process expect­ed to run [00:50:40] into Christ­mas.

[00:50:41] Tony Kynas­ton: The arti­cle says there is no sug­ges­tion a takeover pro­pos­al of a takeover pro­pos­al that would require dis­clo­sure on the ASX is in front of Pete’s [00:50:50] board, but a strate­gic review typ­i­cal­ly opens the door for par­ties to reg­is­ter inter­est. The sec­ond round of due dili­gence will get under­way in the first quar­ter with a whit­tle down group of prospec­tive buy­ers.

[00:50:59] Tony Kynas­ton: Said [00:51:00] peo­ple briefed on the mat­ter who request­ed anonymi­ty to speak freely, so that was in the AFR. Back in 14th of 12, uh, 14th of Decem­ber, [00:51:10] 2025 by Sarah Thomp­son Ka sued and Emma Rap­pa­port. Uh, but, um, I, that, that sort of kicked off a bit [00:51:20] of, uh, research to find out why the board of Pete would want to ini­ti­ate a strate­gic review, espe­cial­ly giv­en the, the lat­est results for the com­pa­ny.

[00:51:29] Tony Kynas­ton: I thought why would they do [00:51:30] that? Um, but their think­ing, uh, last year was that they were com­ing off a mas­sive 60% jump in prof­it that was in mid 2025 and a boom­ing [00:51:40] share price. And the lead­er­ship felt that was an oppor­tune time to check if their busi­ness mod­el was still the most effi­cient way to cap­ture the cur­rent mar­ket tailwinds.[00:51:50]

[00:51:50] Tony Kynas­ton: Uh, specif­i­cal­ly, um. They were con­cerned about the val­u­a­tion gap, uh, which can occur in com­pa­nies like this. So the com­pa­ny thought that its stock price [00:52:00] did­n’t actu­al­ly reflect the true val­ue of its mas­sive land bank, uh, with near­ly $800 mil­lion in con­tracts on hand. By ear­ly 2026, the review aimed to see if a [00:52:10] dif­fer­ent finan­cial or struc­tur­al set up, like spin­ning off the assets or chang­ing how they fund projects would make the com­pa­ny more attrac­tive to big insti­tu­tion­al investors.

[00:52:19] Tony Kynas­ton: And they [00:52:20] also, um, men­tioned that they want­ed to, uh, do a review to scale for the next decade or to allow them to scale for the next decade. And the review is going to cov­er can they build faster to [00:52:30] meet demand? Um, is the cur­rent syn­di­cate and devel­op mod­el still the best or should they move towards some­thing else, uh, and how can they max­i­mize returns to [00:52:40] share­hold­ers while the mar­ket is hot?

[00:52:41] Tony Kynas­ton: And they brought in Gold­man Sachs to run that process. Um, how­ev­er, by the 2025 A GM in Novem­ber, the board [00:52:50] con­firmed that they would focus on exe­cut­ing the strat­e­gy that they had refined, essen­tial­ly dou­bling down on their high growth regions like WA and Queens­land, or wait­ing for Vic­to­ria and New [00:53:00] South Wales mar­kets to bot­tom out.

[00:53:02] Tony Kynas­ton: So it seems like, you know, they were doing some­thing pru­dent in 2025 hold­ing a review. It, it does [00:53:10] seem strange as Street Torque allud­ed to that. Usu­al­ly when you do this, it’s about, um, some kind of, uh, sale. Um, but they did come out then at the a GM and hose that down, [00:53:20] how­ev­er. Uh, the Aus­tralian, um, announced that a mys­tery buy­er might be cir­cling Pete, um, and that Stock­land had for­mal­ly [00:53:30] exit­ed the race in terms of, uh, being involved and the Aus­tralian kind of Cryp­ti­cal­ly, cryp­ti­cal­ly has said a non-prop­er­ty buy­er has emerged as the front [00:53:40] run­ner to acquire all of the res­i­den­tial devel­op­er Pete in the sec­ond stage of its sales process.

[00:53:45] Tony Kynas­ton: But then on the 16th of March, Pete came out with an announce­ment say­ing they [00:53:50] refer to fur­ther media com­men­tary, includ­ing an arti­cle pub­lished in the Aus­tralian today regard­ing spec­u­la­tion in rela­tion to a strate­gic review. As pre­vi­ous­ly announced to [00:54:00] the mar­ket at its 2025 A GM on 27th and Novem­ber, and sub­se­quent­ly con­firmed on the 15th of Decem­ber, Pete has been under­tak­ing a strate­gic review of the [00:54:10] busi­ness to assess the opti­mal oper­a­tional, struc­tur­al and finan­cial set­tings to max­i­mize share­hold­er returns over the medi­um to longer term.

[00:54:19] Tony Kynas­ton: Peak con­firms there [00:54:20] has been no mate­r­i­al devel­op­ment since those updates, and con­se­quent­ly, there are no fur­ther announce­ments to make in rela­tion to a strate­gic review. The com­pa­ny remains focused on [00:54:30] exe­cut­ing the strat­e­gy pre­vi­ous­ly com­mu­ni­cat­ed to the mar­ket, and they go on to say they con­firm that in com­pli­ance with con­tin­u­ous dis­clo­sure oblig­a­tions under the ASX list­ing rules.[00:54:40]

[00:54:40] Tony Kynas­ton: So some­thing’s going on, um, they’re try­ing to hose it down. There are rumors in the mar­ket, so this would­n’t be the first case of a com­pa­ny on the buy [00:54:50] list being attract­ed to some­body else. It is a bit of a unique case that the process has been kicked off by the com­pa­ny and now they’re kind of try­ing to hold it a bit at arm’s length and squash it down.

[00:54:59] Tony Kynas­ton: So [00:55:00] no for­mal offers have been received or declared. Um, you can’t real­ly put a red flag on this and say don’t buy it because it’s a takeover [00:55:10] sit­u­a­tion yet, but it may well become one QAV Num­bers look good for this com­pa­ny and a DT is $745,000. So it’s [00:55:20] rea­son­ably, uh, liq­uid. Uh, the price for the analy­sis was a dol­lar 91, uh, but the IV one on this com­pa­ny is only 92 cents.

[00:55:27] Tony Kynas­ton: There’s no bro­ker­age [00:55:30] cov­er­age in Stock Doc­tor for this com com­pa­ny, so we don’t get an IV two, uh, or fore­cast Earn­ings per share. Uh, so we can’t [00:55:40] score it, um, against the con­sen­sus tar­get or for IV two yield is, uh, a tick over 6%. So that’s above our aver­age mort­gage rate, so we can, uh, give it a score [00:55:50] for that.

[00:55:51] Tony Kynas­ton: Uh, Stock Doc­tor rate is both strong and steady from a finan­cial health and finan­cial trend point of view. And it gets a high rat­ing on stock [00:56:00] Edia qual­i­ty rank of 90 and an F score of eight out of nine, which is very high in stock. Edia total rank is 98, which is also pret­ty good. Uh, PE ratio [00:56:10] is 10.6 times.

[00:56:11] Tony Kynas­ton: It’s not the high­est or the low­est, but it might tick over to being the low­est next half because it just missed out. Uh, three years ago there was a pe [00:56:20] slight­ly small­er than what it’s cur­rent­ly, and like­wise, with con­sis­tent­ly increas­ing equi­ty, um, it just miss­es out because of the, um, an equi­ty drop.

[00:56:28] Tony Kynas­ton: Three years ago. [00:56:30] So when that half ticks over, next half, that might change, but we don’t score it yet. Pr/OpCaf is 4.93 times, which is good. Net equi­ty per share is a [00:56:40] dol­lar 39 and book plus 30 is a dol­lar 81. So we can’t score it for either of those. Uh, don’t have an annex per share growth fore­cast. [00:56:50] Uh, so we can’t score it for that offi­cial­ly, but I did­n’t note man­age­ment have upgrad­ed guid­ance.

[00:56:54] Tony Kynas­ton: So there’s, um, there’s prob, there’s um, prob­a­bly is an increase in earn­ings per share, but we [00:57:00] just don’t have a fore­cast num­ber for it. Stock Doc­tor reports direct­ly only hold 2.75%. How­ev­er, that’s wrong because. Uh, one of the com­pa­nies on the share [00:57:10] reg­is­ter is called Scor­pio Nom­i­nees, and they hold 18.5%, and Scor­pio nom­i­nees is, um, con­trolled by Tony Lennon who sits on the [00:57:20] board.

[00:57:20] Tony Kynas­ton: So he’s got a con­trol­ling stake in the com­pa­ny. Strict­ly speak­ing, he’s not a founder. His name’s not Pete, and he’s an 130 years old, but he wa has been around for a long [00:57:30] time in the com­pa­ny. So I was tempt­ed to score them for own founder, but, um, I, I did­n’t need to get them on the buy list. And, and b it would be a bit of a, it’s a bit of a fudge.

[00:57:39] Tony Kynas­ton: So [00:57:40] I left it, uh, the rules in place and I’m not scor­ing them for own a founder. Uh, the com­pa­ny isn’t a recent three point trend upturn, but the stock, ’cause the stock price has done well, [00:57:50] um, in the last sort of six months at least. So, uh, we can’t score it for that. Over­all qual­i­ty is sev­en out of 1160 4%, and the QAV score is [00:58:00] 0.13.

[00:58:00] Tony Kynas­ton: And you could make an argu­ment to say it should be slight­ly high­er than that. If you wan­na count Tony Lennon as an own­er, founder, and if you want to say that there’s gonna be a, uh, an earn­ings per [00:58:10] share, increase fore­cast, then you might give it a few more, but it’s on the bias at the moment. Um, risks and oppor­tu­ni­ties, so.

[00:58:17] Tony Kynas­ton: Uh, I think the biggest risk is what hap­pens with the [00:58:20] strate­gic review. Uh, on the plus side, it may result in a takeover offer, but, um, if that, if that sort of assump­tions back into the share price and it does­n’t [00:58:30] even­tu­ate, then the price could slide. Um, and of course, this kind of com­pa­ny has all the nor­mal risks of prop­er­ty devel­op­ment.

[00:58:36] Tony Kynas­ton: Ris­ing inter­est rates will, uh, will damp­en demand, um, and, [00:58:40] and pos­si­bly increase their costs. They still have some debt even though it’s low. Uh, and there’s a lot of cost infla­tion going on in labor and sup­plies at the moment. So, um, that’ll [00:58:50] force ’em to put their prices up and, uh, again, that will damp­en demand as well.

[00:58:54] Tony Kynas­ton: Uh, so their risks, um, the, but the pos­i­tives for this com­pa­ny is that they’ve refined their [00:59:00] strat­e­gy and their stick­ing to their knit­ting, which I think is real­ly good. Uh, they’re, they have this cap­i­tal light mod­el for fund­ing things, which I think is excel­lent. And, um, they focus on growth [00:59:10] cor­ri­dors and first home buy­ers feeds into the chron­ic hous­ing under sup­ply scale at the moment.

[00:59:15] Tony Kynas­ton: So even with, um, infla­tion and inter­est rates ris­ing, [00:59:20] I think that they’ve still got plen­ty of run­way to, uh, to make sales, um, migra­tion’s been up since COVID. So that’s got­ta, uh, also feed into that kind of demand for those, these [00:59:30] kinds of hous­es. So, um. My first com­ment was I could­n’t see why they’d ini­ti­at­ed the review.

[00:59:36] Tony Kynas­ton: Uh, and it may have just start­ed off as being a pru­dent way to do a, a [00:59:40] long-term strate­gic plan, but, um, I kind of like what I see here, so I would­n’t be sell­ing a any­thing if I was them.

[00:59:48] Cameron Reil­ly: Thank you [00:59:50] Tony. I went and had a look at their, um, Forestville web­site. Looks nice. I love this mar­ket gar­den in the mid­dle [01:00:00] of the. Com­mu­ni­ty. I was just think­ing Fox would love this place.

[01:00:04] Tony Kynas­ton: Yeah, right.

[01:00:05] Cameron Reil­ly: you just

[01:00:06] Tony Kynas­ton: Yeah. Right.

[01:00:07] Cameron Reil­ly: there’s a veg­gie gar­den, there’s [01:00:10] cafes and shops and looks like a, you know, good place for kids to sort of run around in the mid­dle of the, what­ev­er it is, the square, the [01:00:20] vil­lage square in the mid­dle there.

[01:00:21] Tony Kynas­ton: Mm-hmm.

[01:00:22] Cameron Reil­ly: Nice, nice vision. Inter­est­ing to at their, the pho­tos and the video on [01:00:30] their web­site and you know, fig­ure out how much of it is AI gen­er­at­ed.

[01:00:35] Tony Kynas­ton: yeah. Well, it’s, they’re build­ing a growth cor­ri­dor, so I guess if you use [01:00:40] Google Maps, you prob­a­bly just see a, a pas­tor or a field there at the moment. So it’s got­ta all be artist con­cepts, has­n’t it?

[01:00:46] Cameron Reil­ly: Hmm. Yeah. But I mean, yeah, artist [01:00:50] con­cepts now the artist is just AI

[01:00:53] Tony Kynas­ton: Right.

[01:00:54] Cameron Reil­ly: Very good. And it also, your review there gave me the title for this week’s episode, lumpy Buy­back, which was [01:01:00] also, it was my porn name in the sev­en­ties. Uh, I was known as Lumpy. Buy­back. No Lumpy. What was Buy­back. What’d you say? Lumpy. [01:01:10] Lumpy. Pay­back. Lumpy. Pay­back. Lumpy. Hairy back. I think it was, uh, it was close enough. Good stuff. [01:01:20] Alright. After hours. Tony, what do you got? Golf by The

[01:01:24] Tony Kynas­ton: Yeah, love watch­ing the Mas­ters all week­end. Um, came down to a close fin­ish and [01:01:30] Rory Mac Mack­el­roy won again, so he’s back one of the only four peo­ple in his­to­ry who’ve won the Mas­ters back to back. So it was a lot of fun and good tim­ing for us [01:01:40] too. I’d get up in the morn­ings and it’d be the back nine.

[01:01:41] Tony Kynas­ton: So you’d see a, a fair bit of golf and excit­ing stuff.

[01:01:45] Cameron Reil­ly: Isn’t he hap­py? Gilmore’s neme­sis, Rory McEl­roy.

[01:01:48] Tony Kynas­ton: Nah, that shoot [01:01:50] a Gavin?

[01:01:51] Cameron Reil­ly: That’s right.

[01:01:52] Tony Kynas­ton: Yeah.

[01:01:53] Cameron Reil­ly: Rory McEl­roy. Sounds like some­one from a Adam San­dler or a Ben Stiller com­e­dy or some­thing like [01:02:00] that.

[01:02:00] Tony Kynas­ton: Yeah. North­ern Ire­land. North­ern Ire­land play­er. One of the few. Mm-hmm.

[01:02:05] Cameron Reil­ly: Hmm. What else? What else have you been watch­ing? Lis­ten­ing to [01:02:10] read­ing? What’s been keep­ing

[01:02:11] Tony Kynas­ton: Yeah, Jen­ny and I binged, uh, land­man sea­son two, which was real­ly good. Have you seen It [01:02:20] is, yeah,

[01:02:20] Cameron Reil­ly: No,

[01:02:21] Tony Kynas­ton: sea­son,

[01:02:22] Cameron Reil­ly: of those.

[01:02:22] Tony Kynas­ton: sea­son two stars. Uh, well, Demi Moore’s been in sea­son one, but she has a big­ger heart to play in sea­son two. Uh, but Andy [01:02:30] Gar­cia is in it, who’s great, and Sam Elliot’s in it, who’s great as well. So it was real­ly good to see good act­ing, good scripts.

[01:02:38] Tony Kynas­ton: Um, Jen­ny loved it and [01:02:40] it’s, it appeals to, I guess, males and females because you’ve got this sort of somber one prob­lem on top of anoth­er being solved by Bil­ly Bob in the oil indus­try. And then [01:02:50] you’ve got his wife, who’s this blonde tor­na­do who goes out to old peo­ple’s homes to vol­un­teer and gets them old drunks and takes ’em to strip clubs and all this kind of stuff.

[01:02:59] Tony Kynas­ton: So it’s, um, [01:03:00] it’s, it’s got a light side to it too, which is good.

[01:03:04] Cameron Reil­ly: Sam Elliot, I just looked him up. He’s 81. When he played [01:03:10] Vir­gil Urp in Tomb­stone in 1993. He was only 49. looked like he’s 75, I reck­on for the last 40 years.

[01:03:19] Tony Kynas­ton: He [01:03:20] has. Yeah. And he is got that deep, deep movie pre­view voice, has­n’t he? You know?

[01:03:26] Cameron Reil­ly: he’s, he got the great­est voice in the great­est mus­tache.

[01:03:28] Tony Kynas­ton: Yeah.

[01:03:29] Cameron Reil­ly: have actu­al­ly [01:03:30] seen a cou­ple of his films from like the sev­en­ties before the mus­tache when he was sort of.

[01:03:35] Tony Kynas­ton: Oh

[01:03:36] Cameron Reil­ly: Like a sex, sex sym­bol lead­ing man kind of thing. [01:03:40] And then at some point he just grew that mus­tache and that was it. He was just the cow­boy.

[01:03:44] Tony Kynas­ton: yeah.

[01:03:45] Cameron Reil­ly: last remain­ing cow­boy in Hol­ly­wood beat a cow­boy. You [01:03:50] get Sam Elliot, uh, good stuff. Is this by the same guy who did Yel­low­stone and all those?

[01:03:56] Tony Kynas­ton: It is. It is. Yeah.

[01:03:58] Cameron Reil­ly: He has [01:04:00] a, he has a, like a, a tem­plate, does­n’t he?

[01:04:02] Tony Kynas­ton: Ooh.

[01:04:03] Cameron Reil­ly: these

[01:04:03] Tony Kynas­ton: Hmm. I, I, I real­ly enjoyed ear­ly Tay­lor. Sheri­dan, so I think, um, he [01:04:10] was hell or high water, the movie, which I think is fan­tas­tic. Real­ly high­ly rec­om­mend­ed if peo­ple haven’t seen it. Um, and then I was­n’t a big Yel­low­stone fan or any of [01:04:20] the oth­er ones, but I do like Land­man. It’s good.

[01:04:22] Cameron Reil­ly: Hmm. I thought you were into the oth­er ones. I thought you liked Yel­low­stone.

[01:04:25] Tony Kynas­ton: No, to me it was, it was Dal­las

[01:04:29] Cameron Reil­ly: Yeah. I.

[01:04:29] Tony Kynas­ton: [01:04:30] for, for this cen­tu­ry.

[01:04:31] Cameron Reil­ly: We watched the first episode of one of those. It, it might’ve been Yel­low­stone, I think. And it was, yeah, it was just too net­worky for­mu­la­ic

[01:04:39] Tony Kynas­ton: [01:04:40] Yeah. Yeah. So I found it too. Yep.

[01:04:43] Cameron Reil­ly: Same, same with Sons of Anar­chy, um, which I think he act­ed in, but, uh, I

[01:04:48] Tony Kynas­ton: Oh, real­ly?

[01:04:49] Cameron Reil­ly: that sad­ly.

[01:04:49] Tony Kynas­ton: I [01:04:50] nev­er saw that.

[01:04:50] Cameron Reil­ly: uh, it was by one of the guys who, um, Kurt Sut­ter cre­at­ed it. He was one of the writ­ers on the Shield, which we loved.

[01:04:58] Tony Kynas­ton: Oh, right.

[01:04:59] Cameron Reil­ly: in the shield. [01:05:00] Any­way, well, uh, what have I got? Uh, the John Can­dy Doco. We start­ed watch­ing

[01:05:06] Tony Kynas­ton: Yeah, I’ve seen that. It’s good, isn’t it? Yeah.

[01:05:09] Cameron Reil­ly: [01:05:10] so great.

[01:05:10] Tony Kynas­ton: Yep.

[01:05:11] Cameron Reil­ly: I mean, every­one loves John Can­dy.

[01:05:14] Cameron Reil­ly: How do you not love John Can­dy?

[01:05:15] Tony Kynas­ton: Mm.

[01:05:16] Cameron Reil­ly: Um, what a sweet­heart he was. [01:05:20] Uh, I’ve been watch­ing the lat­er sea­son or the final sea­son of the boys, I think. ’cause my boys keep say­ing, have you watched the boys yet? So

[01:05:28] Tony Kynas­ton: You rec­om­mend [01:05:30] it?

[01:05:30] Cameron Reil­ly: Have you seen any of it?

[01:05:31] Tony Kynas­ton: No.

[01:05:33] Cameron Reil­ly: Oh yeah. Like it’s super Seth Rogey, like, [01:05:40] it’s

[01:05:40] Tony Kynas­ton: Okay.

[01:05:41] Cameron Reil­ly: sex­u­al­ly dis­gust­ing, uber vio­lent, but sort of that, you know, Taran­ti­no com­i­cal lev­els [01:05:50] of uber vio­lence,

[01:05:51] Tony Kynas­ton: Mm-hmm.

[01:05:52] Cameron Reil­ly: lot of guts, a lot of super vio­lence.

[01:05:55] Cameron Reil­ly: But you know, it depicts psy­cho­path­ic [01:06:00] super­heroes and the psy­cho­path­ic good guys that are try­ing to stop the psy­cho­path­ic super­heroes based on a real­ly good com­ic by Garth Enni from the nineties. But, [01:06:10] um, as the show’s gone on, they’ve just lent more and more into Trump’s Amer­i­ca. So the super­heroes are basi­cal­ly run­ning a fas­cist [01:06:20] state where, free­dom is for the free. They have con­cen­tra­tion camps called Free­dom Camps that they put lefty pro­tes­tors in. And uh, yeah, [01:06:30] they just, it’s like down to ride a sea­son. They just take every­thing that Trump and his cab­i­net’s done in the last six months and they just work it into sto­ry­lines. But it’s fas­cists, super­heroes [01:06:40] are doing it instead of Trump and his, uh, um, uh, the high­est [01:06:50] gross­ing Bol­ly­wood film of all time, which only came out last year.

[01:06:56] Tony Kynas­ton: I thought [01:07:00] bride and prej­u­dice was the high­est gross­ing.

[01:07:02] Cameron Reil­ly: I think it was every year, what­ev­er film

[01:07:04] Tony Kynas­ton: Yeah. Okay.

[01:07:05] Cameron Reil­ly: gross­ing, they get big­ger and big­ger every year.

[01:07:07] Tony Kynas­ton: Yeah, it makes sense. Yep.

[01:07:08] Cameron Reil­ly: is a full [01:07:10] on action film on a true sto­ry of. dur­ing the, the [01:07:20] Pak­istan India bor­der wars ter­ror­ist attacks, they send a guy, the Indi­ans send a guy in under­cov­er into [01:07:30] to infil­trate the gangs in the ter­ror­ist net­works and to bring him down from the inside. uh, he looks like a, an Indi­an ver­sion of, [01:07:40] uh, uh, Carl Dro­go, what­ev­er that actor’s name is, um,

[01:07:44] Tony Kynas­ton: Oh

[01:07:44] Cameron Reil­ly: of

[01:07:45] Tony Kynas­ton: yeah. Okay.

[01:07:45] Cameron Reil­ly: moa, Jason Mao,

[01:07:47] Tony Kynas­ton: Yeah, right.

[01:07:48] Cameron Reil­ly: guy with big, long [01:07:50] hair and like, not fit in. You know, you’re look­ing around the slums of Karachi and you see this guy and you’d be like, real­ly?

[01:07:58] Tony Kynas­ton: Yeah. You [01:08:00] eat­ing two or three lit­tle guys a day.

[01:08:01] Cameron Reil­ly: Yeah, would­n’t be an under­cov­er guy. Come down, take us down. Why do you look like John Ram­bo? Uh. [01:08:10] You are work­ing in a, you know, a chai tea shop. Real­ly? Ah, some­thing does­n’t work with this pic­ture. Any­way. Very, very

[01:08:17] Tony Kynas­ton: it’s like, like that movie. Do you ever [01:08:20] see the Aus­tralian movie Stone from the sev­en­ties?

[01:08:23] Cameron Reil­ly: Oh, no, I don’t think I’ve ever seen

[01:08:25] Tony Kynas­ton: Yeah. It’s, it’s not bad. It’s worth watch­ing action movie from the sev­en­ties about [01:08:30] motor­cy­cle gangs. But the,

[01:08:31] Cameron Reil­ly: Yeah.

[01:08:31] Tony Kynas­ton: the cop sent an under­cov­er copy­ing to these bikes with long hair and den­im jack­ets and he’s got short back­ing sides and tucks his [01:08:40] shirt in and

[01:08:40] Cameron Reil­ly: Mus­tache.

[01:08:42] Tony Kynas­ton: it’s like, but none of them say, oh, you must be a cop

[01:08:46] Cameron Reil­ly: They don’t pick it up. [01:08:50] Uh, and apart from Ash­er Bley, I’ve been lis­ten­ing to Otis Red­ding. I real­ly, you know, I’ve only ever heard Otis Red­ding’s. [01:09:00] hits sit­ting

[01:09:01] Tony Kynas­ton: dock of the.

[01:09:01] Cameron Reil­ly: the bay, that kin­da stuff. I’ve been going deep dive into Otis Red­ding’s small cat­a­log. Oh my God.

[01:09:08] Tony Kynas­ton: It’s good, isn’t it?

[01:09:09] Cameron Reil­ly: [01:09:10] oh, amaz­ing. I’d for­got­ten that he wrote hard to han­dle, the song that the Black Crows had a hit with in the nineties.

[01:09:19] Cameron Reil­ly: Uh, did the orig­i­nal [01:09:20] ver­sion of that, but just, and he wrote respect,

[01:09:22] Tony Kynas­ton: Mm

[01:09:23] Cameron Reil­ly: orig­i­nal­ly, but just like the brass sec­tion and the whole thing. Oh man. So good. [01:09:30] And do you know how he died?

[01:09:31] Tony Kynas­ton: Oh, yeah. Um, did­n’t they pull him out of the bay? His plane crashed into the bay or some­thing.

[01:09:36] Cameron Reil­ly: Yeah. Plane

[01:09:37] Tony Kynas­ton: Mm-hmm.

[01:09:37] Cameron Reil­ly: three days after he record­ed [01:09:40] sit­ting on the dock of the Bay plane crashed, uh, a lit­tle light air­craft here and the Bar­ques were in his band and they all died except one, one guy sur­vived. The rest of them [01:09:50] died. Trag­ic. Um,

[01:09:52] Tony Kynas­ton: Yeah. I once had a dou­ble album record of his great­est hits, I guess, or his canon. It was real­ly [01:10:00] good.

[01:10:00] Cameron Reil­ly: Oh, so good. I’m kick­ing myself that I’ve, you know, he is one of those guys, one of those r and b guys that, you know, he turns up on playlists and you go, that’s great, but nev­er [01:10:10] tak­en the time to drill down. Real­ly, real­ly enjoy­ing it. Well, that’s it for me, Uh, I’ve got an [01:10:20] excit­ing, uh, Amer­i­can show to do for, by the way, I’ve had one or two peo­ple, I thought I had made this quite clear in my emails over the last few months, [01:10:30] but the occa­sion­al email from peo­ple say­ing, Hey, how come I can’t see the Amer­i­can list any­more? When, of when offi­cial with the Amer­i­can, [01:10:40] uh, sub­scriber sys­tem, mem­ber­ship sys­tem a few months ago, uh, it, it is now. You have to be a a a a, an Amer­i­can. have to have a [01:10:50] sub­scrip­tion to QAV Amer­i­ca or a light sub­scrip­tion to get access to the buy lists or the full pod­casts or the light stuff over there. [01:11:00] So, um, if you’re won­der­ing, if you are won­der­ing why you can’t get your hands on it, that’s prob­a­bly why. But if you’re a long time Aus­tralian sub­scriber and you wan­na, you get your hands on [01:11:10] the Amer­i­can stuff, just shoot me an email and we’ll work some­thing out. We’ll look after you, don’t you wor­ry about it. Uh, that’s it. Alright, let’s go talk about [01:11:20] pugs, PAGS, the Brazil­ian Fin­Tech. is pret­ty inter­est­ing sto­ry.

[01:11:29] Tony Kynas­ton: Yeah. [01:11:30] Good.

[01:11:30] Cameron Reil­ly: pret­ty inter­est­ing. Pug, pug Bank. PAGP, pa P in Ital­ian, tope [01:11:40] pga, same Latin route as PAO

[01:11:42] Tony Kynas­ton: Yeah,

[01:11:43] Cameron Reil­ly: Por­tuguese appar­ent­ly. Okay. Thanks tk. Have a

[01:11:48] Tony Kynas­ton: thanks [01:11:50] Cam.