Boring Stocks, Bonkers Returns: QAV AU #926

QAV AU 926 Club

[00:00:00]

Cameron: Wel­come back to the Bricks- the Bruce Spring­steen, uh, ret­ro­spec­tive hour. Tony’s just telling me Spring­steen sto­ries off air, and I’m like, “This is gold. We’re wast­ing this. This should be on After Hours.” We’ll get to it After

Tony Kynas­ton: Still my favorite con­cert, four hours at, at QEII in Bris­bane in ’85, I think. And it just start­ed to rain at the end. It was just tremen­dous. Yeah. And it start­ed to rain and Spring­steen came out for a, an encore singing, um, I Can’t Help Falling in Love With You. He’s by him­self in the rain. Oh, it’s just sen­sa­tion­al.

Yeah

Cameron: was so dis­ap­point­ed with my audio qual­i­ty last week. Depressed me. Yeah, looks like it’s right. Well, it’s the end of the finan­cial year today, Tony. 30th of June, episode 926, 30th of June 2026. Got­ta say, it’s been a one– it’s been one for the, one for the record books this year. Um, [00:01:00] crazy year for QAV. Um, not so good for every­body else appar­ent­ly, accord­ing to the Fin. The lost year, Shana Clear called it this morn­ing in the Fin. The ASX 200’s lost year. Hmm

Tony Kynas­ton: I thought it had been doing okay. I thought it was still up like five or 6%, 7%, some­thing like that. You got the fig­ures there.

Cameron: 3.3,

Tony Kynas­ton: Oh, that’s all. Okay

Cameron: Mm, com­pared with 20% on Wall Street and 21% across glob­al mar­kets.

Tony Kynas­ton: Well, I think I

Cameron: 200 return for 4% infla­tion and you’ve gone back­wards

Tony Kynas­ton: I think I’d take the 3% in Aus­tralia ver­sus the 20% on Wall Street at the moment.

Cameron: Real­ly?

Tony Kynas­ton: Oh, shit yeah, there’s a lot of, a lot of bombs about to explode, I think, on Wall Street.

Cameron: Well, one of them just

Tony Kynas­ton: Lot of, lot of rock­ets to blow up

Cameron: yeah. Well, before we get into that, I’m just gonna run through our, our end of finan­cial year num­bers as they look at 1:00 PM on the 30th of June. I don’t expect much will change between now and [00:02:00] 4:00 PM. Uh, where will I start? Well, uh, one bit of news is I’ve changed the names, hence post our chat last week.

Uh, the dum­my port­fo­lios are no longer called the dum­my port­fo­lios.

Tony Kynas­ton: Mm-hmm.

Cameron: They’re called the mod­el port­fo­lios,

Tony Kynas­ton: good

Cameron: mod­el and the US mod­el port­fo­lios.

Tony Kynas­ton: Good. Well done

Cameron: Um, the AU mod­el the last 12 months, uh, SPDR200 up 6.61%. I don’t know what the dif­fer­ence is between that and the 3.3% ASX 200 that Chan­ti­cleer’s quot­ing.

He says it’s the S&P ASX 200.

Tony Kynas­ton: You, you track the accu­mu­la­tion index though, don’t you?

Cameron: that’s right. The SPDR’s

Tony Kynas­ton: div­i­dends. Yeah.

Cameron: right. So 50% div­i­dends then if it’s up 6.6, and

Tony Kynas­ton: Yep

Cameron: one’s up 3.3. QAV ver­sus 6.6, we’re up 28.95% [00:03:00] for the year

Tony Kynas­ton: Not a rock­et in sight. No SpaceX, noth­ing.

Cameron: And it’s down too, just the last, uh, cou­ple of days. It was up 31% on the 24th of June, so it’s come back a bit this week. Here’s, um, our cur­rent hold­ings, FYI. CoreVest, KOV,

Tony Kynas­ton: You’ve had that for a long time.

Cameron: up four, up 460%.

Tony Kynas­ton: Well

Cameron: I think I bought it round about COVID.

Tony Kynas­ton: Yeah.

Cameron: might have been ear­li­er, but I think

Tony Kynas­ton: Mm-hmm

Cameron: COVID‑y. So yeah, it’s a five bag­ger more or less over years. Um, not too bad. Um, some­body was ask­ing on the val­ue invest­ing sub­red­dit, um, yes­ter­day, you know, “Do you ever– Are there any stocks that you plan to buy and hold for­ev­er?”

I said, “Every stock I buy, I plan to buy and hold for­ev­er. But then I

Tony Kynas­ton: I,

Cameron: rules

Tony Kynas­ton: that’s a cun­ning plan, Baldrick.

Cameron: [00:04:00] But that’s a great exam­ple. CoreVest, I’ve held for,

Tony Kynas­ton: Mm-hmm.

Cameron: years, up 500%. Glob­al up 300%. up 262%. This is over the entire life of the hold­ing, obvi­ous­ly.

Tony Kynas­ton: Hmm.

Cameron: Civmec, CVL, is up 225%. Per­en­ti’s up 127. KSC is up 87. SRV is up 62. ANZ, 37. I could go on, but it’s bor­ing. The only one that’s down in the whole port­fo­lio is Boom Logis­tics, which is down 6%.

Tony Kynas­ton: Oh. And I’m gonna do a Pulled Pork on the stock on the buy list now, which is up two hun­dred and twen­ty per­cent in 12 months.

Cameron: Whoa!

Tony Kynas­ton: It was, it was too small. It’s been– I’ve been track­ing it for a while, but it was too small. It did­n’t get through our fifty and ADT fil­ter, but that prob­lem’s been solved now that the stock­’s up near­ly three times.

Cameron: Right

Tony Kynas­ton: Yeah. Yep

Cameron: Uh, so that’s the [00:05:00] whole, the mod­el port­fo­lio. I’m going, it’s gonna take me a while to get used to say­ing that. The lite port­fo­lios as a group over the finan­cial year, again, ver­sus the SPDR200 up 6.6, up 35.96% in the last year as a

Tony Kynas­ton: Wow

Cameron: Uneven­ly split, the 221, the orig­i­nal port­fo­lio, is still under­per­form­ing.

It’s up. Well, it’s had a good year. It’s up 11.69% this year ver­sus the 6.6. So it’s done dou­ble mar­ket, uh, this year. But since incep­tion, it’s only up 6% ver­sus 8.5 for

Tony Kynas­ton: Mm-hmm.

Cameron: so it still has­n’t caught up. Uh, the 222.2, the sec­ond lite port­fo­lio for the year is up 16.5 ver­sus six. All time, it’s up 13 ver­sus 7.8.

Uh, 223 is up for the year. What? It’s near­ly 10 [00:06:00] times mar­ket. Oh, my God, South­ern Cross Elec­tri­cal I hold in that. Just, oh, my God. Lis­ten to this. This is the cur­rent hold­ings for the 223 lite port­fo­lio. is up 508%. Genus­Plus, GNP, is up 330%, Durat­e­ch up 267, SHAPE Aus­tralia Cor­po­ra­tion, SHA, is up 134, Civmec up 100, EDU’s up 93, Perseus is up 66, a few oth­ers in there. Cou­ple under­wa­ter, Har­money Group and Tyro Pay­ments are down 2 or 3% each. Um, but oh, my God, that’s bonkers. And 231, the last lite port­fo­lio, incep­tion date Novem­ber 22, is up 46% for the finan­cial year 6.6.

Tony Kynas­ton: inter­est­ing, isn’t it? That’s five mod­el port­fo­lios, all with dif­fer­ent start dates, and only one is. Well, they’ve all [00:07:00] out­per­formed the index this year, but only one has slight­ly under­per­formed

Cameron: Since And it start­ed at the worst pos­si­ble time to start a port­fo­lio in the last five years.

Tony Kynas­ton: Yeah

Cameron: this one, last one holds CoreVest as well. It’s up 144% since I bought it. Per­en­ti, SDI is up 47. It does­n’t have as many big hit­ters in the port­fo­lio, so I don’t know why it’s up 50% this year. assum­ing, uh, it’s CoreVest and Per­en­ti. I don’t know. But, um, noth­ing under­wa­ter in that port­fo­lio. But, uh, any­way, absolute­ly bonkers year for the QAV port­fo­lios this year. And, and I know, you know, and I know I’ve learnt the hard way,

Tony Kynas­ton: Mm-hmm.

Cameron: last.

Tony Kynas­ton: Nope.

Cameron: We’ll have bad years, I feel con­fi­dent in. At least, I mean, I don’t know about that, the, the first dum­my port­fo­lio.

I hope it gets anoth­er good year under­neath it so it can get above the, [00:08:00] uh, index. But over­all, this has giv­en us so much buffer in the oth­er port­fo­lios that we can han­dle a bad year or two and still be way, way ahead, you know?

Tony Kynas­ton: I think also too, if we have a bad year, it’s like­ly the mar­ket’s gonna have a worse year. So we’re still prob­a­bly gonna be out­per­form­ing even though we might be down. That’s the most like­ly rea­son for us out­per– under­per­form­ing is, is the fact that the mar­ket goes down

Cameron: Yeah. I’ll com­pare that with the US, uh, port­fo­lios, which we’ll do more in the next episode, the US episode. But the US mod­el port­fo­lio for the year, the S&P 500 is up 19.91%, 20% as Chan­ti­cleer clear­ly said. so that’s not includ­ing div­i­dends, and I don’t think ours does either on Stock­o­pe­dia. the US mod­el port­fo­lio is up 44% for the year ver­sus the 20% for the S&P, so bet­ter than dou­ble mar­ket. And the lite port­fo­lio, which I just start­ed in Decem­ber, uh, [00:09:00] a lit­tle bit above the S&P at the moment. We’re doing 8.5 ver­sus 8.17 for the S&P. So, uh, still find­ing its feet, but, um, yeah, the mod­el port­fo­lio absolute­ly killing it. And just to give you an idea of some of the stocks in that, Lease Finance Com­pa­ny is up 375%. Uh, Eno­va Inter­na­tion­al is up 294%. And like as you said, no, I mean, no rock­et com­pa­nies in this either. Um, Bladex, which is a Latin Amer­i­can bank, up 150%. Euroseas, which is a ship­ping com­pa­ny, up 137. Tsakos Ener­gy Nav­i­ga­tion, anoth­er ship­ping com­pa­ny, up 100, 103, 104%. Region­al Man­age­ment, which I can’t even remem­ber what they do.

I think they’re a finan­cial ser­vices com­pa­ny, maybe not, up 80%. UBS Bank up 61. Stealth­Gas, anoth­er ship­ping com­pa­ny from mem­o­ry, 58%. [00:10:00] Um, and then there’s an insur­ance com­pa­ny and a finan­cial com­pa­ny and yeah. So again, like just bor­ing, bor­ing QAV stocks that

Tony Kynas­ton: And

Cameron: knows what they are.

Tony Kynas­ton: I was gonna say, and to, and to be hon­est, we we don’t remem­ber what half of them do.

Cameron: No. No, I

Tony Kynas­ton: Yeah.

Cameron: even know what half of the Aus­tralian stocks

Tony Kynas­ton: Hmm

Cameron: US stocks. Um, I try not to. yeah, bonkers year

Tony Kynas­ton: Yep. Well done. Well, hope­ful­ly the lis­ten­ers out there are get­ting sim­i­lar returns, which

Cameron: and,

Tony Kynas­ton: be good

Cameron: encour­age every­one to send us your results next week, uh, and tell us if you’re hap­py for us to read us out on air, read them out on air, and put them on the web­site because, uh, you know, it’s, the proof is in the pud­ding. It’s not what we do, it’s, it’s what you report that, uh, is the proof in the pud­ding.

The results that you get, uh, demon­strates that the sys­tem for every­body if you fol­low it because it’s just log­i­cal. Some of the news of the week, Tony. [00:11:00] Um, bit of rate and RBA anx­i­ety going on. Um, bit of investor anx­i­ety that the RBA might retain a, uh, hawk­ish tight­en­ing bias. I love that term. bias. Sounds sexy.

Tony Kynas­ton: Puck­er­ing.

Cameron: bias. Yeah.

Tony Kynas­ton: Turk­ish puck­er­ing.

Cameron: yeah. the Strait of Hor­muz, uh, again, who the hell knows what’s going on in there? peace in our time except they start­ed bomb­ing each oth­er the next day and, uh, real­ly knows. A of fac­tion­al things. Accord­ing to my Per­sian friend at Kung Fu, um, the prob- the thing in Iran is there’s fac­tions.

So the Khal­ibaaf, the guy who’s sup­pos­ed­ly in head of the IRGC and the nego­ti­a­tions, and Pezeshkian and the pres­i­dent or the Aya­tol­lah can sign off on what­ev­er they like, but there are fac­tions that are going, “Nah, we [00:12:00] don’t, we don’t, we don’t want peace. We’re just gonna keep attack­ing and bomb­ing and caus­ing trou­ble,” ’cause they’re not part of the, uh, fac­tion that seems to be the dom­i­nant fac­tion at the So it’s, it’s a com­pli­cat­ed and tricky sit­u­a­tion And then, uh, Chi­na. Strong eco­nom­ic sig­nals com­ing out of Chi­na. I don’t know if you know this, Tony, but Chi­na is either boom­ing or f- com­plete­ly fail­ing and about to fall over, on any giv­en day

Tony Kynas­ton: Yeah, it’s boom­ing when it buys iron ore from us and it’s fail­ing when it’s com­pared to the US

Cameron: Uh, strong indus­tri­al prof­it num­bers out of Chi­na, 18.8% year on year for Jan­u­ary to May. But it’s, uh, it’s gonna fall over any minute now, Tony. Um, it’s a com­plete house of cards, Chi­na

Tony Kynas­ton: Yeah, those tar­iffs will take effect soon

Cameron: Uh, the biggest dra­ma overnight was the gold sec­tor. Bul­lion slid overnight, h- uh, hit [00:13:00] rough­ly US an ounce. I’ve got the chart here in front of me. It’s basi­cal­ly back to where it was in Sep­tem­ber last year, gold. So all of those peo­ple that were out buy­ing gold, um, hope­ful­ly they got out at the peak.

Tony Kynas­ton: I’ve got an expen­sive paper­weight.

Cameron: Yeah. Uh, what else?

Tony Kynas­ton: Actu­al­ly, I, I noticed in your buy list that you put out, you don’t have a rec­om­men­da­tion on Aus­tralian gold. You’ve got US gold as a Josephine, I thought I saw on the week­end. Is there a rea­son for that?

Cameron: I think they just mir­rored each oth­er for so long that I gave up.

Tony Kynas­ton: Okay

Cameron: Yeah. That was it. And I think also when I was cod­ing it, it was eas­i­er to get the USD

Tony Kynas­ton: Yeah.

Cameron: get num­ber, and they just sort of mir­rored each oth­er, and so I did­n’t see there was much point. Could be wrong on that.

I haven’t paid atten­tion to it since. [00:14:00] Uh, Bit­coin’s also. I don’t know if you’ve been pay­ing atten­tion to this, but it’s, uh,

Tony Kynas­ton: actu­al­ly

Cameron: Oh my God. It’s back to where it was Octo­ber 2024. So it’s writ­ten off good two years of growth, so yeah

Tony Kynas­ton: Yeah, I was hav­ing a debate about this as to what drove the sell-off last week and, um, cou­ple of things I guess was the con­sen­sus view was that, uh, when Strat­e­gy start­ed sell­ing about three months ago, that kind of pulled the rug out of Bit­coin.

Cameron: Strat­e­gy

Tony Kynas­ton: Oh, not Stake, uh, Mi- Strat­e­gy, MicroS­trat­e­gy it used to be called, now it’s called Strat­e­gy.

Cameron: Right

Tony Kynas­ton: they, piv­ot­ed a cou­ple of years ago to be a Bit­coin hoard­er and said they’d nev­er sell, and about three months ago they start­ed sell­ing,

Cameron: Right

Tony Kynas­ton: which took a lot of, um. Well, first of all, it flood­ed the mar­ket with sells, but it also, um, you know, took a bit of the wind out of the sails of the Bit­coin [00:15:00] hold­ers for­ev­er.

Um, but I think also too, there’s, there must have been some sell­ing in Bit­coin to fund share pur­chas­es in the SpaceX IPO. So s- that’s also what I think may have hap­pened. Um, and then there’s the usu­al rea­sons, uh, you know, Bit­coin’s alter­na­tive gold, so gold’s come off, Bit­coin’s come off, um, et cetera, et cetera.

But I think it’s those two rea­sons. Um, Strat­e­gy was sell­ing and then peo­ple were cash­ing in to put mon­ey into Sta- into SpaceX.

Cameron: Right Well, the SpaceX price has ticked back up a lit­tle bit. It was down at, uh, 153 a cou­ple of days ago. It’s back up to 164 today, but it’s a long way below 211, the peak that it hit just after the float

Tony Kynas­ton: And there’s an awful lot of escrow in that stock too, peo­ple who’ve been told they can’t sell for a peri­od of time, um, either ’cause they were ear­ly investors or got in ear­ly on the float or their staff or their bankers or what­ev­er. But [00:16:00] if, if it’s still hov­er­ing around the price it list­ed at when the escrow peri­od ends, then it’s gonna go down

Cameron: Jere­my Grantham, the, uh, famous investor who found­ed GMO, one of the most respect­ed invest­ment firms in Boston. He’s 87. He was on the Diary of a CEO pod­cast a cou­ple of days ago, and he said. He was talk­ing about the SpaceX float. He said, “It’s the clas­sic descrip­tion of a mar­ket peak. It’s what you look for at the top of a ter­rif­ic bub­ble. I think it will fail to deliv­er any­thing like its promis­es in the prospec­tus.” Um, hard to argue with it look­ing like the peak of a bub­ble real­ly,

Tony Kynas­ton: I agree. And, and there’s. And don’t for­get, there’s still two more big floats to come for Ope­nAI and Anthrop­ic. They both an-announced that they’ll float, whether they do or not, but it’s gonna be hard to get three huge floats away on Wall Street this year, I think

Cameron: Well, I’ve heard in the last day or so that Ope­nAI is s- sound­ing like they’re gonna kick it down the road after the [00:17:00] SpaceX

Tony Kynas­ton: All right

Cameron: Yeah. They feel like it, uh, tim­ing’s not right.

Tony Kynas­ton: Yeah.

Cameron: back to next year

Tony Kynas­ton: And I would­n’t– it would­n’t sur­prise me at all if, if Ope­nAI even­tu­al­ly gets bought out by Microsoft rather than float­ed. But we’ll see

Cameron: Hmm. Well, uh, got a ques­tion from Mike. said, um, got some prob­lems get­ting my wife to okay invest­ing our mon­ey, so I’ll be doing it on paper for a bit. I wan­na bor­row against the equi­ty in the house. I can get an SMSF to get start­ed with too. She want­ed to see some finan­cial advi­sors, saw two of them.

Both, when I said that I want­ed to do QAV and invest direct­ly, warned us about the risks and instead said that we should pay them $4,000 for a plan for them to choose some ETFs for us and $6,000 a year to be avail­able for email con­sul­ta­tion and to check on our ETFs. I declined and [00:18:00] won­dered about their ongo­ing prospects.

Have you got any finan­cial advi­sors that use QAV them­selves? When I asked the finan­cial advi­sors if they did direct invest­ing them­selves, they gave me a death stare.” I said, “Well, that’s the right ques­tion to ask. Can I have a look at your port­fo­lios? Um, also hap­py for you to pay me $6,000 a year to be avail­able for email con­sul­ta­tion.

Can’t give you finan­cial advice, but I’ll answer your emails for six grand a year.” Um, any­way, he’s ask­ing if we have any finan­cial advi­sors out there that use QAV and are QAV-friend­ly. Now, I know that we do have some f- peo­ple that are QAV mem­bers that have the name of a finan­cial advi­so­ry firms in their, uh, email address, I don’t wan­na out them or, you know, both­er them.

So if you’re lis­ten­ing to this

Tony Kynas­ton: And you want the client?

Cameron: advi­sor and you want a client let me know and I’ll bro­ker an intro­duc­tion to you to Mike. But it would be [00:19:00] good ’cause it’s not the first time actu­al­ly I’ve had this ques­tion, but would be good to have a list of, uh, QAV-approved finan­cial advi­sors that we could point peo­ple at

Tony Kynas­ton: Well, a few com­ments on all that. Um, some, some peo­ple and prob­a­bly the vast major­i­ty of the pop­u­la­tion feel com­fort in hav­ing a finan­cial advi­sor look after their affairs and pro­vide advice. Um, you know, that’s the, that’s the envi­ron­ment that Clime works with. Um, and I’m on their board, so I get it. Uh I’d, I’d be very care­ful though of, of finan­cial advi­sors putting you into mul­ti­ple ETFs because, you know, s- the safest thing to do is to buy an index ETF like VAS, like the SPDR.

And I’m not giv­ing any spe­cif­ic finan­cial advice here, I’m talk­ing gen­er­al­ly. Um, you might want to diver­si­fy and buy a sim­i­lar sort of ETF for the US mar­ket or even for the world mar­ket, the MSCI World Index, but that’s three. Um, you know, after that, [00:20:00] what are you real­ly diver­si­fy­ing into? And there is a lot of.

There are a lot of ETFs these days on the mar­ket which are begin­ning to look more like man­aged funds, where they’re charg­ing much high­er fees than the index type ETFs, and they’re track­ing a spe­cif­ic sec­tor of the mar­ket, you know, val­ue or growth or div­i­dend, what­ev­er. Um, and some of them are valid, some of them are, you know, have, have good his­to­ries, but some of them are also charg­ing a lot of fees for doing essen­tial­ly, you know, they’re not out­per­form­ing the index.

They’re doing essen­tial­ly what an index fund does. Um, so that’s my first com­ment. Uh, you know, by– I think you should­n’t hold more than one ETF if you’re look­ing to do it through a, an advi­sor or even on your own because, you know, the ETF that’s been issued or list­ed now may not still be there in 10 years’ time for what­ev­er rea­son.

You know, it’s been delist­ed or it’s– they’ve decid­ed to change its, um, its struc­ture or its fees or what­ev­er. So, you know, I’d rec­om­mend hold­ing two or three in that case, [00:21:00] so you’ve got some­thing to piv­ot into if there’s a change. Um, or you might wan­na diver­si­fy Aus­tralia over– and over­seas, cou­ple of good rea­sons.

But you don’t wan­na be pay­ing high fees for an ETF. It’s, it’s got­ta be sort of below, at or below a quar­ter of 1%. Um, so that’s the first thing. That’s the low-cost way of doing it. Finan­cial advi­sors can obvi­ous­ly help you if you have sp-spe­cif­ic sit­u­a­tions like you’re, had an inher­i­tance or you’ve lost your job or, or some­thing else, a busi­ness that you run is being sold or what­ev­er.

So there are rea­sons to, um, to go to finan­cial advi­sors. So that’s prob­a­bly enough on finan­cial advice. It’s up to you and your com­fort lev­els. Um, the dis­cus­sion between. Was it Mike, I think you said the lis­ten­er was called? Yeah. The dis­cus­sion between Mike and his wife is, is again one I can’t give advice on because I can’t win.

But, um, what I, you know, con. What, what I’d ask Mike to con­sid­er is, you know, maybe doing what’s tra­di­tion­al­ly called a core satel­lite or a dumb­bell [00:22:00] approach where you, you put most of your funds into an ETF and then you, and then you, um,

Cameron: going?

Tony Kynas­ton: and then you, uh, take a lit­tle bit of the port­fo­lio and do QAV and then, you know, prove the results to, um, to your wife going for­ward and allo­cate maybe a lit­tle bit more over time if it works for you.

So that’s prob­a­bly the way I’d approach it if it was, um, if it was me. But, uh, yeah Um, good luck. Uh, you should be doing some­thing. Don’t do, uh, don’t do noth­ing. Just, uh, still get into the mar­ket because, um, you know, it’s, uh, y- it’s still. E- even hold­ing index ETFs is still bet­ter than doing noth­ing

Cameron: At the very least, pay me six grand a year to be avail­able for email con­sul­ta­tion. Daryl asks, uh, “For a few weeks now, SUN, S‑U-N, Sun­corp, has been on the QAV buy list, but on my own Stock­o­pe­dia buy list, it’s rat­ing much low­er, around QAV 0.02 on a price/operating cash flow of [00:23:00] 11.38. On assump­tion that Tony runs an SOP check­list, is he see­ing sim­i­lar to the SD check­list for SUN in his analy­sis?” Um, I like, “What? You got a PROPCAF of 11?” ‘Cause my PROPCAF was 5.44. This was when I looked at it last week. And, um, I went into Stock­o­pe­dia, which seemed to have a dif­fer­ent PROPCAF, and then I did some, did some dig­ging in SUN’s finan­cials and it was hard to fig­ure out. I had Claude look over their last finan­cials, and he could­n’t fig­ure it out either because it’s a bit weird.

But, um, came to the con­clu­sion, I sug­gest­ed to Daryl, I think there might be a dis­agree­ment between Stock­o­pe­dia and Stock Doc­tor on the PROPCAF for SUN, but which one is right and which one is wrong, I uh, fig­ure out. Did, um, do you have any thoughts on how to

Tony Kynas­ton: Oh, yeah. We, we’ve had this prob­lem before. Sor­ry, I should­n’t say it’s a prob­lem. We’ve had this dif­fer­ence before.[00:24:00]

Cameron: Right

Tony Kynas­ton: a‑and it’s basi­cal­ly that Stock­o­pe­dia is tak­ing the annu­al, uh, oper­at­ing cash flow num­ber, and Stock Doc­tor takes the half year­ly and adds it to the sec­ond half of the annu­al. So it adds two halves togeth­er to give a rolling twelve month.

And there’s been a big increase in the oper­at­ing cash flow for. in the last six months for the first half at, for Sun­corp. So, um, Stock­o­pe­dia is using an oper­at­ing cash flow num­ber, I think of about two point five bil­lion, and Stock Doc­tor’s three point two or some­thing like that because of that increase in oper­at­ing cash flow in the sec­ond half.

Sor­ry, in the first half of twen­ty twen­ty-six, which is not in Stock­o­pe­dia

Cameron: is using the last full year, it’s

Tony Kynas­ton: Cor­rect.

Cameron: the TTM?

Tony Kynas­ton: Yep.

Cameron: Right.

Tony Kynas­ton: Yeah. And you can see that in Stock Doc­tor if you go and com­pare the last full year num­ber to Stock­o­pe­dia, they’re the same, they’re the same

Cameron: Yeah. Yeah, I saw that. Okay, so s- inter­est­ing. So that’s gonna have a big impact [00:25:00] on doing num­bers, um, in the

Tony Kynas­ton: Mm-hmm.

Cameron: finan­cial year, right? There’s gonna

Tony Kynas­ton: Yeah

Cameron: between Stock Doc­tor and Stock­o­pe­dia num­bers

Tony Kynas­ton: Well, it could be. It does­n’t always hap­pen. I mean, some­times a lot of com­pa­nies have fair­ly steady oper­at­ing cash flow. But, um, yeah, if there’s a big increase or a big decrease in the half, it will sep­a­rate the two

Cameron: And I assume we would side with Stock Doc­tor’s approach

Tony Kynas­ton: Hmm.

Cameron: it’s real mon­ey, it’s a real num­ber

Tony Kynas­ton: Yeah, and it’s also the most recent real num­ber too.

Cameron: Yeah So what’s the solu­tion for that?

Tony Kynas­ton: Oh, the only solu­tion, you’d have to down­load the annu­al report and the half year­ly report and add them togeth­er your­self, yeah, or the two halves, yeah.

Cameron: Mm.

Tony Kynas­ton: Um, giv­en that this is the only one that’s been point­ed out in years, it’s prob­a­bly not gonna be a big deal, I don’t think

Cameron: Well, yeah, peo­ple haven’t been using Stock­o­pe­dia for that long, but, uh, you know, we only launched the check­list, like, in the last year or so. I don’t know how many peo­ple use it. But yeah, oh, that’s good know. [00:26:00] I’ll have to make a note of that some­where so I remem­ber next time.

Tony Kynas­ton: Hmm

Cameron: Okay. Well, thanks for point­ing that out any­way, Daryl.

Um, Jim, “I thought I would share the fol­low­ing from Andrew Page on his Straw­man plat­form, which I’ve been on since around the same time­line as QAV. The con­trast between QAV and the Straw­man investors is stark. I’m hav­ing my best year ever fol­low­ing your QAV rules and hold­ing a fair­ly mun­dane group of com­pa­nies. share results next week. Where so many on Straw­man talk con­stant­ly about the lat­est growth stock or macro trend with often unfor­tu­nate con­se­quences. Keep up the good work. Thank you and regards, Jim.” And so then this fol­lows, uh, fol­lows off of this, the Andrew Page, uh, post. In Half it’s called. “Mis­ery loves com­pa­ny, so in light of the lat­est Bit­coin dump and our return to the 50% draw­down mark, I thought I’d reach out to the oth­er suf­fer­ers and [00:27:00] see how every­one is hold­ing up. not just to the weirdo mag­ic beans max­is. There’s a lot of fol­low, fel­low trav­el­ers doing it tough out there. So let’s also pour one out for the poor fools among us hold­ing stuff well below recent lev­els.

Too many to ful­ly eulo­gize here, but spe­cial men­tion to WiseTech, down 75%, Pro Medicus, down 45%, ARB, down 54%, CSL, down 58%, Xero, down 63%, Cochlear, down 60%, and Cat­a­pult, down 50%. only because it’s prob­a­bly not too con­tro­ver­sial to class them all as good com­pa­nies and none fac­ing exis­ten­tial demise. Even gold is down 25%. just sucks, and it’s made worse by the fact the mar­ket as a whole remains rather rude­ly up for the year and only 5% or so from record highs. One is always tempt­ed to throw out a be greedy when oth­ers are fear­ful line or look at mar­ket fluc­tu­a­tions as your friend [00:28:00] rather than your ene­my, does­n’t do a lot to soothe the pain.

It’s entire­ly pos­si­ble for a well-mean­ing Buf­fet­tism to be both the right thing to say and super annoy­ing at the same time. what it’s worth, I will say that the expe­ri­ence of watch­ing your port­fo­lio get cut in half does get eas­i­er the more often you expe­ri­ence it. Not easy to be clear, just eas­i­er. And I speak as some­one who has had the priv­i­lege more than a few times now. In fact, what tends to come to my mind at times like these are the regrets of pri­or cycles, not in hav­ing had to endure them, but in hav­ing allowed the lizard part of my brain to be too influ­en­tial. can make peace with how I could­n’t have ever hoped to time an exit at the mar­ket top, but what always caus­es me to wince when reflect­ing on past port­fo­lio dumps how I allowed fear to restrain an aggres­sive­ness that I knew was what was need­ed, or worse, how the pain of a loss pushed me to capit­u­late at exact­ly the wrong time.

That’s the stuff that will haunt you for a long time. [00:29:00] To be clear, I’m not say­ing you should­n’t sell the invest­ments that have crashed low­er. Maybe they deserve to be sold. And I’m not say­ing that you should buy either. Maybe things will drop a lot fur­ther yet. I’m just say­ing that the very real pain of loss should­n’t cloud your judg­ment, and that if the the­sis has­n’t changed and val­ue as you per­ceive it still exists, the last thing you should do is sell.

You should prob­a­bly buy more if you can. Eas­i­er said than done, of course, but what val­ue is there in being an invest­ment club if we can’t offer each oth­er a bit of gen­tle encour­age­ment when it’s need­ed? It’ll all be very obvi­ous what the right move is in hind­sight, but we know the good times will return even­tu­al­ly and when they do, we will all look like genius­es again. It’ll only be because we did­n’t do some­thing stu­pid just because a num­ber on a screen went low­er. And what’s more, we can say to those who will look at us with envy and call us lucky that the gains were very much earned, nay, deserved, paid for in anguish and ridicule. Huz­zah!

Tony Kynas­ton: Well, that’s, that’s a– I mean, that’s a– it’s good that Andrew [00:30:00] is being self-reflec­tive, but he just needs to go that one more step. And that, that list of stocks that he was hold­ing that have come down a lot, um, whilst I don’t dis­agree with his the­sis that they’re good com­pa­nies, maybe there’s one or two in there that I might dis­agree with, but on the whole, they’re good com­pa­nies.

But be a lit­tle bit more self-reflec­tive and real­ize you’re pay­ing way too much for them. And they– and that worked for a num­ber of years, and as it always does, always, every sin­gle time, if you over­pay for some­thing, it comes back to bite you in the end,

Cameron: Yeah Well, what’s my theme song? Makes You Feel Good? It’s like there’s a, there’s a Möt­ley Crüe song, Doc­tor Feel­go­od. the one you call Doc­tor Feel­go­od. He’s the one that makes you feel all right. He’s the one they call Doc­tor Feel­go­od. Yeah. I don’t wan­na, I don’t want to, um, I don’t wan­na [00:31:00] be rude, but yeah, we’ve had a good year.

Tony Kynas­ton: Well, I don’t want to get too hubris­tic either because we’ll have a bad year.

Cameron: Yes,

Tony Kynas­ton: year at some stage and we’ll be in the same boat, but it’ll be for a dif­fer­ent rea­son. It’s large­ly because gen­er­al­ly when we have a bad year, some­thing hap­pens that, that dri­ves the mar­ket down like, you know, um, Ukraine war or Straits of Hor­muz or some­thing like that.

Cameron: Hmm.

Tony Kynas­ton: won’t be because we paid

Cameron: Yeah

Tony Kynas­ton: 200 times the earn­ings for a stock because we thought it was, you know, gonna take over the world

Cameron: Hmm. Hmm. All right, Tony, that’s all my notes. What you got?

Tony Kynas­ton: A cou­ple of things, and I guess they’re a bit on the same sort of theme too, so I don’t wan­na labor, um, a dead. flog a dead horse here. But, um, I’m s- I’m see­ing so many com­men­ta­tors now which are talk­ing about signs of the mar­ket top. You men­tioned Jere­my Grantham before, and he’s cer­tain­ly seen a few mar­ket [00:32:00] cycles.

Um, so, you know, y- you’d lis­ten, I’d lis­ten to him. But a cou­ple of oth­er arti­cles I saw, uh, in The Wall Street Jour­nal today that, uh, there was an arti­cle say­ing that mar­gin loans are up 50% in the US. Um, just, you know, the amount of lever­age that is going on over there, and I guess some of it is to take part in SpaceX IPOs or what­ev­er.

But, um, there is. That’s a real dan­ger sig­nal, I think, when, uh, it’s as, it’s as sure as pay­ing 200 times earn­ings for a s- a stock you like. If you gear in to do it, you know, not only does the stock come down 50%, but you’re called and you have to sell at the wrong time. So the mar­ket is look­ing very, very risky, uh, in the US in par­tic­u­lar.

And of course, if the mar­ket turns in the US, it’ll, it’ll turn here as well. So I just, um, I’m gonna start sound­ing these warn­ing bells because [00:33:00] I think they’re very real at the moment. And I know the first thing you’ll say is, “What do we do about it?” And of course, we can’t. We, we don’t do any­thing about it.

We keep, um, we keep going the way we’re going now. And we’ll, we’ll just have to wade our way through a mar­ket down­turn, but we’ve got rules on how to do that

Cameron: Remind me how a mar­gin loan works again

Tony Kynas­ton: Yeah. So this is, it’s a bit like tak­ing out a mort­gage on a house. So you, um, you go to the bank, ask for a loan. They say, “What are you gonna buy?” I say, “I’m gonna buy a house.” They say, “Well, we’ll lend you up to eighty per­cent of the val­ue, and then you pro­vide twen­ty per­cent.” Now, the bank, the bank will call, you know, if your house falls in val­ue dra­mat­i­cal­ly and you can’t, you can’t, um, meet the, you know, the repay­ments, um, you’ll get called.

The dif­fer­en-dif­fer­ence with a mar­gin loan is you’re tak­ing it out on a stock. Um, the inter­est rate is much high­er, but there’s this extra clause which says that if the stock val­ue falls below [00:34:00] the, um, the loan ratio that, uh, we agreed on when you took out the loan, we get to sell the stock and keep the pro­ceeds.

So typ­i­cal­ly, like if you’re buy­ing CBA, Comm­Bank, um, you don’t need to hold that much equi­ty. It might go as high as, um, sev­en­ty per­cent loan to val­u­a­tion. So if CBA is at a hun­dred and fifty bucks, you can bor­row a hun­dred or a hun­dred and ten, uh, against it. But if CBA falls below a hun­dred, um, and you can’t con­tribute, um, more equi­ty to the bank, then the bank will sell the stock.

And you get to pay, you know, a large inter­est rate, like nine or ten per­cent these days to. for the, for the fun of doing that. So, um, it’s, it’s high­ly lever­aged bets on things con­tin­u­ing, c‑continuing to go up and, you know, we’re see­ing every day oth­er, oth­er sit­u­a­tions that point to them not going up. You know, there’s been anoth­er, um, uh, trad­ing halt on the Kore­an index last week, [00:35:00] so that’s, I think that’s the sec­ond one I’ve heard of.

Um, so things are get­ting the jit­ters over there. That did force a sell down some, uh, some tech stocks on the Nas­daq, so it will flow thr- will flow through to that mar­ket as well. Um, so that’s, that’s the risk. The oth­er thing that’s risky in the US, and it was in this Wall Street Jour­nal arti­cle, is that often­times peo­ple are lever­ag­ing up to then buy an ETF, which is itself geared up.

So you can. As I said before, when I was warn­ing peo­ple not to buy ETFs that ac- that l‑look like man­aged funds, but they’re called ETFs, there are geared funds now that will buy, say, the Nas­daq or the tech sec­tor, and they’ll give you three or four times lever­age. So, you know, they’re, they’re going to their bankers and say­ing, “We think the Nas­daq is going up.

We wan­na buy. bor­row fifty per­cent of the val­ue of going out and hold­ing a port­fo­lio of Nas­daq stocks.” And they can get called, but then if you’ve geared up on them, [00:36:00] it just becomes an ampli­fied down­turn. You’re sold out, you lose mon­ey, um, and they do the same thing. So the Nas­daq may have only gone down thir­ty or forty per­cent, but you could be, you know, wiped out or, or los­ing eighty or nine­ty per­cent of your mon­ey.

So that’s a real risk.

Cameron: Hmm.

Tony Kynas­ton: There was anoth­er arti­cle, um, the. This was in today’s AFR, but the, uh, Bank of Inter­na­tion­al Set­tle­ments, which is kind of the, the cen­tral bankers’ bank around the world that help cen­tral banks do trades. Um, they’ve come out and said that, uh, there’s exces­sive spend­ing on AI data cen­ters and that there’s, um, what they called opaque trans­ac­tions, which are risk­ing a finan­cial melt­down sim­i­lar to the glob­al, glob­al cred­it crunch near­ly two decades ago.

So they’re also call­ing, um, tech as a, as a poten­tial risk in the mar­ket, much like the GFC. [00:37:00] So a lot, uh, you know, you see these kinds of art- well, you only see these kinds of arti­cles pop­ping up when we’re get­ting near the top of a mar­ket. And, you know, as I said many times, um, these arti­cles were around in ’98, ’97, ’98, ’99, 2000.

So the, the mar­ket could con­tin­ue to go up for anoth­er three years or more, but it will crash even­tu­al­ly.

Cameron: Hmm.

Tony Kynas­ton: So not hap­py news, um, but I guess it’s the counter to the hubris of we’ve had a good year.

Cameron: Well, as I said when I said we had a good year, I know that it won’t last, but we’ve got a buffer,

Tony Kynas­ton: Yep.

Cameron: you know. Um, our good years buy us, buy us a cou­ple of bad years, you know?

Tony Kynas­ton: Gen­er­al­ly, yeah. All right, well, the only oth­er thing I’ve got is a pulled pork, um, which is on EVZ or EVZ, EVZ, yeah.

Cameron: I’m

Tony Kynas­ton: Aus­tralian

Cameron: talked about these guys before, haven’t we?

Tony Kynas­ton: Oh, [00:38:00] look at, you know, it was­n’t on the pulled pork list, so, um, it did ring a bell, but it must have been four or five years ago, I think. And I am strug­gling to find stuff we haven’t talked about before as well.

Cameron: Yeah. It’s get­ting like that, isn’t it?

Tony Kynas­ton: Hmm.

Cameron: Let’s see. We did them in, uh. Well, we talked about them. They had a qual­i­fied audit. This is back in episode 411, uh, record­ed on the 17th of March 2021.

Tony Kynas­ton: Mm-hmm.

Cameron: The last time I’ve got any­thing tagged with EVZ, so it’s been five years. I think

Tony Kynas­ton: Yeah.

Cameron: it’s,

Tony Kynas­ton: And they cer­tain­ly went, they cer­tain­ly went through a restruc­tur­ing as well around that time, which I’ll cov­er off on. Uh, and the share price went down a lot dur­ing that, um, ear­ly two thou- twen­ty twen­ties peri­od, and it’s now recov­ered and it’s, as I said before, it’s up a lot this year. I think it’s up from about, um, well, the fig­ures are in twelve months it’s gone from [00:39:00] six­teen cents, uh, to get up to sev­en­ty-sev­en and now it’s back to six­ty-five.

So it’s gone up, um, quite a lot this year.

Cameron: Hmm.

Tony Kynas­ton: So I think it’s worth cov­er­ing. Um, they were. As you know, when I do my down­load, I, I don’t put a fil­ter on ADT, so I’ve been watch­ing these guys because they, they were a very low ADT stock, um, sort of one or two thou­sand dol­lars a day. And then they’ve gone through this ter­rif­ic run and now the ADT is a hun­dred and fifty thou­sand dol­lars a day.

So it’s cer­tain­ly, um, start­ing to get investable for lis­ten­ers to the show. Um, and large­ly that’s because of the, the run up in the, the share price. But they’re an engi­neer­ing com­pa­ny and they pro­vide man­u­fac­tur­ing and ser­vice, uh, uh, options, uh, across a num­ber of dif­fer­ent sec­tors, infra­struc­ture, ener­gy and resources.

They’ve been around for a long time. They were first estab­lished back in the nine­teen eight­ies and, uh, they oper­ate through a num­ber of dif­fer­ent com­pa­nies in dif­fer­ent sec­tors which they’ve acquired over the time. So sec­tors [00:40:00] like steel fab­ri­ca­tion, a lot, a lot of busi­ness with water stor­age tanks, uh, bulk han­dling mate­r­i­al sys­tems and elec­tri­cal infra­struc­ture com­po­nents.

So they oper­ate in Aus­tralia, um, and, and they’ve been grow­ing by acquir­ing oth­er engi­neer­ing com­pa­nies. Uh, basi­cal­ly oper­at­ing in, in the ener­gy and resources sec­tors in the main. Lot of work for the elec­tri- uh, elec­tri­cal infra­struc­ture side of things, uh, but also oil and gas facil­i­ties. Uh, they’ve done work with what’s called con­stant load pow­er sta­tions, back­up pow­er gen­er­a­tion equip­ment, clean ener­gy infra­struc­ture.

But they also do large steel tanks, silos, cool­ing tow­ers, uh, pres­sure ve- ves­sels and oth­er sort of struc­tur­al steel work, and they also work in the build­ing prod­ucts area. Uh, they do a lot. They bought a com­pa­ny which does a lot of, um, roof­ing and roof drainage sys­tems, uh, [00:41:00] com­plex roof struc­tures, um, and they install, uh, water tanks and hydraulic sys­tems.

So engi­neer­ing fab­ri­ca­tor and ser­vice provider. They oper­ate under dif­fer­ent brands, which are large­ly the com­pa­nies that they’ve acquired over the years, like Brock­man Engi­neer­ing, Siphon Sys­tems, Tank Indus­tries and TSF Pow­er. So, uh, you know, s- I was, I was gonna call them a bog stan­dard engi­neer­ing com­pa­ny.

That’s prob­a­bly being a lit­tle bit unkind to them, but they’ve been doing it for a long time, ser­vic­ing, um, mak­ing things and ser­vic­ing dif­fer­ent, uh, sec­tors of the econ­o­my. So why did the, the stock price go up from six­teen cents to six­ty-five cents? Well the mar­ket re-rat­ed dur­ing the year and, uh, it start­ed to re-rate ear­ly on in the year, in the last 12 months, but it was real­ly, um, kicked on by, uh, bet­ter finan­cials for the com­pa­ny.

So rev­enue at the half, first half FY26 went up 16% [00:42:00] to 63 mil­lion. Um, net prof­it grew by 191% to just under two mil­lion. EBITDA went up 78% to four point four mil­lion. So, um, that was a, a large set of, um, good results. They also announced that they were debt-free, um, and they did refi­nance their, their bank­ing sit­u­a­tion, so they have access to a large cred­it facil­i­ty which, um, can help them when they’re ten­der­ing for work, um, with deposits and things like that.

Um, or if they need to invest to pick up a con­tract, they’ve got, um, the facil­i­ties to do that. Uh, and they also announced, uh, that their full year guid­ance would be very strong as well. So FY26 full year guid­ance is, um, expect­ed between one twen­ty and one twen­ty-five mil­lion for rev­enue. Uh, and that’s ver­sus 108 mil­lion in 2025.

And like­wise, EBITDA is track­ing to be between eight point five and nine mil­lion ver­sus five point three mil­lion in [00:43:00] 2025. So not, not quite dou­bling, but, um, 20% odd up in rev­enue and near­ly dou­bling in EBITDA. Um, and they’ve also announced that they’ve record­ed their high­est cash bal­ance since the start of, of trad­ing back 40 years ago.

Um, and they cur­rent­ly hold just under $19 mil­lion of cash in the bank. So the mar­ket’s lik­ing all that. Um, and it’s, it’s see­ing that what­ev­er prob­lems they had sort of five years ago have, are well and tru­ly behind them now. Uh, prob­a­bly a good idea to go through the his­to­ry of the com­pa­ny, which gives you an idea for both the cycli­cal nature of the indus­tries they oper­ate in, but also where they came unstuck.

So, uh, incor­po­rat­ed back in ’84, list­ed in April, uh, 1985. Um, and for the first 20 years, the com­pa­ny basi­cal­ly, uh, did a lot of man­u­fac­tur­ing and tech­nol­o­gy invest­ments, and then it, [00:44:00] uh, decid­ed to reor­ga­nize the strat­e­gy towards com­mer­cial infra­struc­ture and indus­tri­al engi­neer­ing. Uh, and then sort of in the ear­ly 2000s, 2006 say to 2010, they start­ed to acquire, um, estab­lished pri­vate engi­neer­ing com­pa­nies like Siphon Sys­tems, which was the roof drainage, uh, sys­tem, uh, or roof drainage installer.

Brock­man Engi­neer­ing, uh, which was the, uh, major bulk liq­uid tank fab­ri­ca­tor and main­te­nance busi­ness. So they did a lot of work in the oil, gas, and resources sec­tors. And they also acquired TSF Pow­er, uh, which was focused in the renew­able, um, elec­tric­i­ty indus­try, but also in the diesel pow­er, gas and diesel pow­er gen­er­a­tion indus­try as well.

So they diver­si­fied a lot, but then a few years after that, 2014 to 2018, uh, they found it very chal­leng­ing and their, [00:45:00] their debt peaked in 2017 at 13 odd mil­lion dol­lars and the mar­ket val­u­a­tion for the com­pa­ny was depressed. Uh, so in 2017, they decid­ed to recap­i­tal­ize the busi­ness. Um, they did, uh, issue a num­ber of shares which dilut­ed exist­ing share­hold­ers.

They raised $4.7 mil­lion, uh, in cap­i­tal. Uh, they also did a debt to equi­ty con­ver­sion, which meant that bor­row­ers of the com­pa­ny had the oppor­tu­ni­ty to con­vert their debt for, uh, for shares in the com­pa­ny, and they also sold, uh, some of the assets off as well. So they cut their debt down from 13 to six, and that basi­cal­ly saved the com­pa­ny from a poten­tial insol­ven­cy.

So, uh, that’s, that’s what hap­pened with the recap­i­tal­iza­tion. Um, and then from 2020s onwards, they, uh, con­tin­ued to expand after the sort of recap­i­tal­iza­tion. So they, uh, [00:46:00] got into water tanks in a big way. Um, they sort of piv­ot­ed away from the, uh, build­ing of tanks for, um, stor­ing diesel and oth­er fuels to build­ing tanks to store water, uh, and for things like fire safe­ty sys­tems, both, uh, for com­mer­cial use and, um, uh, treat­ment plants, et cetera.

So, uh, that has worked out well for them. They leant heav­i­ly into the clean ener­gy piv­ot, um, and so they, um, uh, repo­si­tioned their pow­er busi­ness and Brock­man Engi­neer­ing towards LNG. Um, they have a lot of busi­ness installing what’s called hydro­gen-ready pip­ing and a lot of busi­ness in renew­ables, uh, for the ser­vices around renew­ables.

Um, and then, um, you know, that’s all come to where we are today. Those, those changes [00:47:00] in, in their strat­e­gy, the recap­i­tal­iza­tion, the, the, um, dilu­tion, uh, has now kind of turned full cir­cle and they’re now expand­ing, they’re debt-free and, uh, they’ve got, uh, good mar­gin, uh, good mar­gins, so they’ve improved their effi­cien­cies and they’re now expand­ing to look for work.

Um, so that’s all the good news. One sort of inter­est­ing thing I found when I was look­ing through the, the, um, the com­pa­ny announce­ments today was that, uh, after the, the re- the results announce­ment, uh, back in May, the, i‑i. the, um, non-exec­u­tive chair­man, a guy called Graeme Burns, who has been around for a long time, um, you’d prob­a­bly call him an own­er-founder, except that he had sold about half of his hold­ings.

So, um, he sold five mil­lion shares on mar­ket at fifty three cents, and that caused the stock to tum­ble nine per­cent on the day of the announce­ment. But it rep­re­sent­ed [00:48:00] forty one per­cent of his direct indi­vid­ual share­hold­ing, so he still has a rea­son­able amount invest­ed. Uh, I think it’s about six per­cent of the stock in the com­pa­ny.

Um, and he said that he was doing this to, uh, allow more insti­tu­tion­al investors and to, to cre­ate more free float in the com­pa­ny, and cer­tain­ly the ADT has gone up for the busi­ness. Sec­ond thing ar-around the same time was, though, was that, um, one of the orig­i­nal sort of cor­ner­stone or one of the cor­ner­stone share­hold­ers for a while, a com­pa­ny called, uh, Thor­ney Invest­ments Group, um, they also sold down.

So they, they, um, through a sub­sidiary called Tiga Trad­ing, T‑I-G‑A, they, uh, also start­ed to light­en in May this year as well. And so, uh, they dropped from nine­teen point eight per­cent to four­teen point three per­cent now through a cou­ple of sell­ing tranch­es. Um, no oth­er direc­tors have been sell­ing. Does­n’t seem to be oth­er [00:49:00] big, uh, instos sell­ing.

Um, so it’s an inter­est­ing sit­u­a­tion. I mean, some, some parts of the mar­ket have seen that as both the chair­man and Thor­ney Invest­ments kind of pick­ing the top of the mar­ket. Uh, how­ev­er, I think it’s prob­a­bly more that they’re just, um, able to take some prof­its off the ta- off the table through a fair­ly dif­fi­cult, uh, peri­od in the last sort of five or six years for the com­pa­ny.

Uh, giv­en that there’s no debt, giv­en that the mar­gins are expand­ing, giv­en that they’ve got a bank facil­i­ty which is, uh, quite large, I, I don’t think it’s the top of the mar­ket for the share price, but it, that has had a good run up and it has come off a lit­tle bit from its peak. So, uh, I think we’ll need to wait until we see some con­tract wins or some results in the next half to, um, to look for a leg up in the com­pa­ny again.

Um, that’s the sit­u­a­tion it’s at now. The QAV num­bers look pret­ty good. ADT’s a hun­dred and fifty-nine [00:50:00] thou­sand. Uh, the stock price I’m doing this at is six­ty-four cents. There’s no bro­ker cov­er­age, so there’s no con­sen­sus tar­get. IV1 is only ten cents and, and we don’t have an IV2. The com­pa­ny does­n’t pay a div­i­dend.

Stock Doc­tor finan­cial health and trend is strong and recov­er­ing, so Stock Doc­tor is rec­og­niz­ing the improve­ments in the finan­cial sit­u­a­tion, and we score recov­er­ing stocks with a two. Stock­o­pe­dia have a qual­i­ty rank­ing of eighty-five, an F score of six out of nine, which are both good, and an over­all rank­ing of nine­ty-two, which is also good.

Uh, PE ratio has shot up to thir­ty-one times, uh, which is a lot high­er than it was in the ha- at the half when it, uh, issued its lat­est results. If you take it at the PE at the half, it’s the low­est PE for six halves. If you take it at the cur­rent one, it’s the high­est. So, um, it’s up to you how you score it.

It won’t make a big dif­fer­ence to, um, to things. Uh, I [00:51:00] actu­al­ly took– My rule is that you take the low­er of the PEs of the cur­rent ver­sus what it was at the last result. So I’m gonna score it as a, as a good score, but, um, I com­plete­ly accept the crit­i­cism that, um, you could score it the oth­er way. But, uh, yeah, any­way, um, that’s the PE ra- PE ratio.

Uh Net equi­ty per share is thir­ty cents, so we can’t buy it at book or book plus thir­ty. And I do high­light that it’s car­ry­ing a lot of good­will and that NTA is prob­a­bly half that amount. So, uh, just bear that in mind. No earn­ings per share fore­cast, so we can’t do a growth over PE score. Direc­tors are still hold­ing sev­en per­cent.

We look for ten per­cent, uh, so we can’t score it for own­er founder. Prob­a­bly would have been, uh, before May, but not now. Um, one thing which I real­ly like about the com­pa­ny is, uh, it’s got con­sis­tent­ly increas­ing equi­ty over the last three years. That’s– I, I think that’s a very good sign of qual­i­ty. All in all, the qual­i­ty score is ten out of eleven for the things we can score it for, which is nine­ty-one [00:52:00] per­cent, and the QAV score is point one three.

So it’s towards the bot­tom of the buy list, um, large­ly because the price is get­ting away from us. Uh, so it’s a good time to high­light it in case some­one’s inter­est­ed. Uh, they can still buy it as a buy list stock, but if the price does go up, uh, it’ll come off the buy list fair­ly soon. Um, obvi­ous­ly, in a cycli­cal indus­try, the com­pa­ny has lots of risks, but it also has oppor­tu­ni­ties.

So the biggest risk is the cycli­cal nature of the min­ing and infra­struc­ture cycles. You could also prob­a­bly say the same thing about renew­ables at the moment, um, which they’re heav­i­ly into. So th- all of those things are gonna have cycles. But the best way to, to de-risk against cy-cycli­cal down­turns is to hold no debt, which is where they are.

So I think that’s a good strat­e­gy on their behalf. Uh, their mar­gins are increas­ing, which is a good sign. Uh, they are, um, debt-free and with a high PE ratio now. I think there’s an oppor­tu­ni­ty for them to [00:53:00] start, uh, con­sol­i­dat­ing in the sec­tor again. So I would­n’t be sur­prised at all if we see them go out and acquire some more engi­neer­ing com­pa­nies in the next six to twelve months, which would also help to re-rate the, the stock price.

Uh, so the, the biggest ques­tion I think is, is the large run-up in the stock price over? And, um, I think it’s prob­a­bly paus­ing at the moment. But, um, you know, insid­ers have tak­en some prof­its off the table, which I think has, has stopped the run. Um, but with no debt, improv­ing mar­gins, high scrip price that can be used for takeovers, I think there prob­a­bly or pos­si­bly is any­way, um, a, a case for this, uh, for the bull side of things in this stock, even though some insid­ers have tak­en some prof­its.

So that’s, uh, an engi­neer­ing com­pa­ny called EVZ Lim­it­ed.

Cameron: Thank you, Tony. What did you have as their Pr/OpCaf?

Tony Kynas­ton: Oh, I just shut my notes.

Cameron: Sor­ry

Tony Kynas­ton: Uh, let me have a look. What did I have for the Pr/OpCaf?

Cameron: The rea­son I ask is I tried to [00:54:00] find out why they weren’t on my buy list.

Tony Kynas­ton: Mm-hmm.

Cameron: and my Pr/OpCaf was just over sev­en. It was 7.05, so

Tony Kynas­ton: Right. Okay.

Cameron: you might have done yours. When did you do your buy list?

Tony Kynas­ton: Yes­ter­day, yeah.

Cameron: Hmm.

Tony Kynas­ton: So that could be the case. Sor­ry, I’m not see­ing it. Oh, I don’t know if I cov­ered that. Let me have a look at my spread­sheet.

Cameron: Yeah, their price has dropped back a lit­tle bit, um. Maybe from when I did mine.

Tony Kynas­ton: Okay. EVZ.

Cameron: No, actu­al­ly, no. I don’t know. Twen­ty-six, six­ty-three. Yeah. You might have got them in the morn­ing when they dropped down to six­ty.

Tony Kynas­ton: Yeah, I’ve got 6.84.

Cameron: Just snuck in when you

Tony Kynas­ton: Yep. Yep.

Cameron: Very good. After hours Tony.

Tony Kynas­ton: After hours, I don’t have much. I’ve, um, watched the movie called In the Hands of Dante. Have you seen that one?

Cameron: I don’t think so.

Tony Kynas­ton: Very inter­est­ing. It’s, it’s a bit of a hot mess real­ly. It’s, it, it’s all over the shop, but it’s a stel­lar [00:55:00] cast. It’s, um, and full of amaz­ing cameos from peo­ple like Al Paci­no and Mar­tin Scors­ese.

Cameron: Julian Schn­abel film.

Tony Kynas­ton: Yeah. Yeah. And I don’t know if it was like. I don’t know if they shot all these cameos and then tried to leave them in the edit when they should­n’t have, but it, it jumps around a lot. So, like, it’s, it’s a bit sort of Taran­ti­no-ish in that you have a real­ly great scene and then sud­den­ly you’re back in the 1200s in medieval times when Dan­te’s, you know, writ­ing his divine com­e­dy and then you’re, you’re in the 1920s and you’re back in the mod­ern days or 1960s, and it’s just jumps around a lot.

But, um, very ambi­tious. Yeah, it’s, it’s kin­da worth a look just to, for the act­ing real­ly, and for indi­vid­ual scenes, but it does­n’t hold togeth­er as a movie. It’s a bit of a flawed, flawed mas­ter­piece or an attempt at a flawed– at a mas­ter­piece. Yeah.

Cameron: 28% on, uh,

Tony Kynas­ton: Yeah.

Cameron: I mean, I’m a, I’m a fan of Schn­abel. Like he [00:56:00] did, um, Basquiat, which I real­ly enjoyed.

Tony Kynas­ton: Mm-hmm.

Cameron: that was his first film. And I know he was good friends with Lou Reed. He, uh, when Lou went on tour with the Berlin album in the late 2000s, sort of the res­ur­rec­tion of the Berlin album.

Like the orig­i­nal album came out in ’73, and it was a huge flop, and then he res­ur­rect­ed it in 2007. Schn­abel sort of did all the set design, and they did a con­cert in. So it came to, uh, I think he brought it to Syd­ney and, um, so I nev­er got to go see it. I could­n’t afford to go to see it and sort of broke my heart. But, um, uh, yeah, he- I know he’s, like he’s got a lot of. He’s friends with Bowie, and Lou, and Dafoe, and all those sorts of guys. He’s in that sort of

Tony Kynas­ton: Yeah. Well, Dafoe, he’s got a part in it.

Cameron: has he? Yeah, right. Hmm.

Tony Kynas­ton: Yeah. So yeah, great cast, but, um, and some great scenes in it, but it just does­n’t hang togeth­er as a movie.

Cameron: Does­n’t [00:57:00] work, hmm.

Tony Kynas­ton: And

Cameron: Well, I saw, uh, For­bid­den Plan­et. I final­ly watched

Tony Kynas­ton: Ah,

Cameron: Have you ever seen

Tony Kynas­ton: many times. Yeah.

Cameron: Oh my

Tony Kynas­ton: It’s great, isn’t it?

Cameron: Oh, so great.

Tony Kynas­ton: Hmm.

Cameron: Like, so I was on Claude for the whole thing going, “Oh my God, how did they shoot this? How did they shoot

Tony Kynas­ton: Yeah, right. There are some spec­tac­u­lar pho­tog­ra­phy scenes.

Cameron: How did they do these spe­cial effects

Tony Kynas­ton: Yeah. Yep.

Cameron: Unbel- and Rob­bie the Robot,

Tony Kynas­ton: Yep.

Cameron: Leslie Nielsen in the lead role

Tony Kynas­ton: Do you know what it’s based on?

Cameron: Well, I read, well, Claude told me it’s sort of a retelling of The

Tony Kynas­ton: Tem­pest, yeah.

Cameron: yeah.

Tony Kynas­ton: Mm-hmm.

Cameron: very well, so I would­n’t have picked that up. That’s one Shake­speare play I’ve nev­er real­ly gone deep on.

Tony Kynas­ton: Mm. And great con­cepts too, The Id.

Cameron: Yeah.

Tony Kynas­ton: Yeah.

Cameron: Freudi­an stuff in it,

Tony Kynas­ton: Yeah.

Cameron: the id mon­ster.

Tony Kynas­ton: [00:58:00] Yep. And I for­get who plays the, um, the guy who’s been on the plan­et all those years marooned with his daugh­ter, but, uh, he’s fan­tas­tic. Wal­ter Pid­geon, that’s right. Yeah, he’s ter­rif­ic.

Cameron: Ter­rif­ic, yeah. The thing is just, like it deserves its rep­u­ta­tion as a mas­ter­piece. It’s just fan­tas­tic and I, read­ing up on it, um, like it was the first big bud­get Hol­ly­wood sci-fi film. Rob­bie the Robot was about 10% of their bud­get.

Tony Kynas­ton: Hmm.

Cameron: They spent on Rob­bie the Robot. I read that it was cost­ing like $150,000 at the time, which is the equiv­a­lent to like $1.1, $1.2 mil­lion today, which was a big deal at the time, and a lot of inno­v­a­tive tech­niques for mold­ing plas­tic and what­ev­er to make it, and holds up quite well, you know, as a, as a [00:59:00] robot, a char­ac­ter in the thing.

Tony Kynas­ton: Yeah.

Cameron: just real­ly loved it. Although it’s very hard to see Leslie Nielsen deliv­er any­thing seri­ous, you know. I know he was in, um, The Posei­don Adven­ture. I watched that a while ago and, you know, very hard to see him deliv­er any seri­ous lines. I saw this like mini doc­u­men­tary on Air­plane! on YouTube this morn­ing, actu­al­ly, coin­ci­den­tal­ly, and they were talk­ing about the, the, the pro­duc­ers, what­ev­er they were of Air­plane!,

uh, Zuck­ers, I think they were the Zuck­ers.

Tony Kynas­ton: broth­ers, yep.

Cameron: We’re talk­ing about how, you know, all of the actors in Air­plane! were seri­ous dra­mat­ic actors. There was­n’t a come­di­an among

Tony Kynas­ton: Ooh.

Cameron: them,

Tony Kynas­ton: George Kennedy, Robert Stack, yeah.

Cameron: Yeah, right? And they real­ly strug­gled to deliv­er it orig­i­nal­ly, and they were try­ing to– They had to tell them, “Don’t try and do it for the sake of com­e­dy,” right?

“Don’t try and be fun­ny with it. No wink­ing. Play it like it’s writ­ten. Let the words do the com­e­dy. You act it like it’s [01:00:00] seri­ous.” uh, they said Leslie Nielsen did­n’t get it. Leslie Nielsen did­n’t get it at first, and they had to show him the orig­i­nal film. It was based on

Tony Kynas­ton: I was gonna say that.

Cameron: a film, like almost line for line,

Tony Kynas­ton: Hmm.

Cameron: a gen­uine air­plane dis­as­ter film, they threw in sil­ly bits in it. Any­way, and, um, The Stones’ new sin­gle, Jeal­ous Lover. Have you heard that?

Tony Kynas­ton: I haven’t. I’ve, I’ve– lis­tened to the clips, but I haven’t heard the full thing yet.

Cameron: It’s, um, great.

Tony Kynas­ton: Is it? Oh, good.

Cameron: mid-’70s Wait­ing on a Friend style Mick,

Tony Kynas­ton: Oh, good.

Cameron: some acoustic gui­tar in there. It’s a clas­sic Stones sound, you know? Um, I was super impressed. I’ve lis­tened to it a bunch of times. There’s a cou­ple of oth­er tracks they’ve come out with off this upcom­ing album too, which I like, but yeah.

They’re, that’s– They’re [01:01:00] incred­i­ble that they’re

Tony Kynas­ton: I’ll check

Cameron: still putting out

Tony Kynas­ton: that out.

Cameron: good stuff. Like, they’re 80 or some­thing,

Tony Kynas­ton: Yeah.

Cameron: putting out good stuff, like real­ly impres­sive. Not, not as good as Sparks, but you know, it’s– They’re only The Stones, so you got­ta go.

Tony Kynas­ton: Oh, that’s good to hear.

Cameron: Well, that’s all I got. Yeah, Jeal­ous Lover, check that out. Real­ly, I

Tony Kynas­ton: Yeah, Reil­ly. Yep. Yeah, I don’t have any­thing else. Um, it’s been a busy week for me. I was up in Syd­ney, uh, doing end of years, end of finan­cial year stuff with Climb, so did­n’t have much time to do read­ing or watch­ing things.

Cameron: watch stuff.

Tony Kynas­ton: Yeah.

Cameron: Uh, how are the hors­es going? You got Lake

Tony Kynas­ton: Oh, I got Lake For­est run­ning on Thurs­day. Yeah.

Cameron: Yeah, right.

Tony Kynas­ton: so hope­ful­ly she’ll do well again.

That’s at Bal­larat, so I doubt if I’ll be going up to see that. Big dri­ve from here.

Cameron: Hmm.

Tony Kynas­ton: Mm-hmm.

Cameron: wan­na throw in any Spring­steen notes before we, before we go?

Tony Kynas­ton: Oh, I could talk for hours on Spring­steen. Like I was say­ing before, go back and watch No Nukes, the footage from that, [01:02:00] which is incred­i­ble. Um, you know, and he almost, he almost, uh, the band almost fell apart before that. He was almost sacked by the label, you know? ‘Cause he, um, he’d put out two, two albums and they’d done okay, but not great.

And the, he was on his last legs,

Cameron: Yeah.

Tony Kynas­ton: when Born to Run came out, and that, and that No- whole No Nukes thing kicked, kicked, like kicked him into gear. Um, but yeah. A- and it’s very, like I, I love the first two albums. The first album in par­tic­u­lar, Greet­ings From Asbury Park, sen­sa­tion­al. How, you know, it’s, um, “It’s hard to be a saint in the city” is just, the lyrics in that are just so good.

Cameron: Yeah.

Tony Kynas­ton: Yeah, real­ly good.

Cameron: I was say­ing to, so I was telling Tony off air, I, I always, I f- you know, he’s one of those guys I try and get into. Every cou­ple of years I go, “Okay, I’m gonna get into Spring­steen.” And, uh, I, it’s nev­er, it’s nev­er tak­en for me. It’s nev­er worked. Oh, excuse

Tony Kynas­ton: Yeah, well he kind of, he’s kind of blown up to, you know, almost being a par­o­dy of him­self in some respect. But [01:03:00] the ear­ly days, the, you know, that, that movie they made with the guy from The Bear is a good sort of insight into his think­ing, which is, you know, I’m, I’m kin­da, I’m a bar band from, leader of a bar band from Jer­sey and, uh, you know, I don’t know if I’m up to being world-class and all the doubts and.

But, but also all the rejec­tions of, of sort of a rock star lifestyle. He just want­ed to make music with his mates. It’s,

Cameron: Yeah.

Tony Kynas­ton: yeah.

Cameron: Oh, one oth­er thing I did wan­na, I could throw in there is, um, I watched, um, The Pun­ish­er spe­cial.

Tony Kynas­ton: Right.

Cameron: So, you know, there’s

Tony Kynas­ton: Don’t think I know it.

Cameron: you know the, c- the com­ic book guy, The Pun­ish­er? He’s a Mar­vel.

Tony Kynas­ton: Oh, I’ve heard of him, but I don’t know him.

Cameron: He’s basi­cal­ly just a, you know, badass. I think he’s like an ex-Marine. He’s just like a Bat­man. No pow­ers, just he’s just a badass on the streets. Sort of, I think, I haven’t read a Pun­ish­er com­ic book since I was a kid, but from mem­o­ry, [01:04:00] nei­ther good nor bad. He’s just, he’s, he’s Charles Bron­son. He’s a vig­i­lante on the streets tak­ing down the, the crims, right?

Tony Kynas­ton: Yep.

Cameron: Like, not like Bat­man, he’ll blow your head off. He does­n’t care. Mar­vel did a TV series 10 years ago or so now with Jon Bern­thal play­ing the role. Had a cou­ple of cracks at it over the years, movie ver­sions. I think Stal­lone may have made a movie ver­sion about it years ago, too, decades ago. Bern­thal just came back and did a one-off spe­cial that he co-wrote, and Tay­lor told me I had to go watch it, so I did. I di- I did­n’t watch the series, but I watched this thing, it’s basi­cal­ly a half hour of John Wick style vio­lence. Basic set­up is, I think in the series he took out this mob, this fam­i­ly of mob­sters, the, killed all the male mem­bers of this mob fam­i­ly, and the, the moth­er sur­vives, and she sets every gang­ster in New York on him. Has like a, a, a, puts a price on his [01:05:00] head. And he lives in this, um, shit­ty, run­down apart­ment build­ing, and all of a sud­den, like 500 thugs turn up with machetes and flamethrow­ers and guns and knives and axes and what­ev­er, and he just goes to town on them, and it’s the most blood­thirsty 30 min­utes of tele­vi­sion I’ve ever seen.

Like, it is absolute­ly bat­shit crazy, balls to the wall, blood and vio­lence of him tak­ing down these guys. So yeah, if you’re into that

Tony Kynas­ton: Okay.

Cameron: thing.

Tony Kynas­ton: If you vote for the Repub­li­can Par­ty, check it out. Yeah. There’s such right-wing, you know, wet dreams, all these vig­i­lantes that clean up the streets and all this crap. Yeah.

Cameron: I guess, yeah. It’s one way of look­ing at it,

Tony Kynas­ton: Hmm.

Cameron: All right. We’ll go talk Amer­i­ca.

Tony Kynas­ton: Okay.