Buy Hold Sell, by Livewire Markets

2 stocks facing headwinds (and the themes fundies are shorting in 2023)

Following the GFC, the world embarked upon a monetary policy experiment the likes of which had never been seen before.

Having read the history books and being aware of the economic and financial malaise that lingered for decades post the Great Depression, and like a bout of long-COVID, central bankers were desperate to ensure it didn’t happen again.

So they pumped the system full of liquidity. Quantitative easing, loose balance sheets, low interest rates, you name it, the list went on. Then, when the pandemic hit, they pumped more liquidity again, and this time, governments got involved as well.

Well, the experiment is now well and truly over. Inflation has soared, recessions are imminent, and some of the distortions of all that liquidity are being reflected in the stock market. The tide is going out, and we’re going to find out just who has been swimming naked.

In that vein, Livewire’s Ally Selby sat down with the two Seans – Sean Fenton and Sean Roger – to discuss the long and short of it all, literally.

Fenton and Roger talk about hunting for shorts in the current environment, whether rate hikes are behind us and some stocks they like, both longs and shorts. 

Note: This episode was filmed on Wednesday 17 May 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/2-stocks-facing-headwinds-and-the-themes-fundies-are-shorting-in-2023/ 

Buy Hold Sell: 3 of the ASX’s most shorted stocks (and 2 long-term buys)

Since the beginning of the year, the total level of shorting on the ASX has risen 16.2%. According to Shortman.com, there is now $25.5 billion being borrowed today to bet against the country's 100 biggest shorts. 

Short sellers borrow shares in a company at the current market price in the hope they can buy back those shares (close a position) once the company's share price has fallen. Many do this in times when sentiment is falling or a business faces short-term headwinds, rather than long-term structural changes - as short-term fluctuations in share price can be incredibly painful - think GameStop. 

So are there any long-term opportunities the short sellers are missing? 

To find out, Livewire's Ally Selby was joined by Sage Capital's Sean Fenton and Perpetual Asset Management's Sean Roger for their analysis of three stocks with high levels of short interest. 

And just because I know you all love a stock pick, our guests also name a high-conviction position they are backing for the year ahead.

Note: This episode was recorded on Wednesday 17 May 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/buy-hold-sell-3-of-the-asx-s-most-shorted-stocks-and-2-long-term-buys/ 

Buy Hold Sell: 3 ASX stocks dropping their dividends (and 2 on the way up)

If there is one thing Livewire readers love just as much as lithium stocks, long-term compounders, and lithium stocks that are long-term compounders, it's dividend darlings. 

After all, Plato Investment Management has found that if investors had put $100,000 in the ASX in 1980, they would now be earning around $85,000 a year in income. In comparison, if you had left that money in the bank, they would now be earning next to nothing (as we all know too well). 

But what if some of the ASX's highest yielders are dropping their dividends? Particularly, those that had a stellar year in 2022?  

In this episode, Livewire's James Marlay was joined by Plato's Peter Gardner and Antares Equities' Andrew Hamilton for their analysis of three dividend darlings that could be heading lower from here. 

Plus, we also asked them to each name a stock with sustainable, growing dividends in the years ahead. 

Note: This episode was filmed on Wednesday 3 May 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-3-asx-stocks-dropping-their-dividends-and-2-on-the-way-up 

 

6 stocks with sustainably high dividends (and 2 on the way south)

According to S&P Dow Jones Indices research, the S&P/ASX 300 has a trailing 12-month dividend yield of 4.5%. This far surpasses the dividend yield of our developed market peers, with the UK boasting a 3.7% yield and the US just 1.7%. 

Last year, total dividends paid out to investors totalled a record $113 billion. S&P Dow Jones analysts found that our market's dividend pool has grown at a compound annual growth rate (CAGR) of 6.5% over the past 10 years - far higher than the RBA's inflation target of 2%. 

In fact, 148 companies increased their dividends in 2022, despite the S&P/ASX 300 falling quite deeply into the red. In total, 216 companies paid out dividends last year. 

As it currently stands, there are 32 stocks within the S&P/ASX 300 with trailing yields higher than the long-term average market return of 8%. Without stating the obvious, this is far higher than the Australian market's average of 4.5%. 

As the saying goes, when something looks too good to be true, it usually is. 

So in this episode, Livewire's James Marlay was joined by Antares Equities' Andrew Hamilton and Plato Investment Management's Peter Gardner for their analysis of the equity income spectrum, as well as the stocks they believe can continue to pay out sustainably high dividends from here. 

Plus, because we all know this anonymous writer loves a dash of drama, we asked Peter and Andrew to each name one double-digit yielder likely to face dividend-paying challenges from here. 

Note: This interview was filmed on Wednesday 3 May 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/6-stocks-with-sustainably-high-dividends-and-2-on-the-way-south/ 

Buy Hold Sell: 5 high yielders trading at compelling prices

Since September last year, Australian investors have piled into defensive dividend-paying darlings in a bid to protect their capital. 

Think Aristocrat Leisure (ASX: ALL), which has seen its share price soar 23% year to date. Or ResMed (ASX: RMD), which has generated a return of 16% in just four months. Or Transurban (ASX: TCL) - which despite its recent selloff, is still up 13% in 2023 alone. 

But should you overpay to be defensive? 

In this episode, Livewire's James Marlay was joined by Plato Investment Management's Peter Gardner and Antares Equities' Andrew Hamilton for their analysis of three high-yield stocks that haven't enjoyed the re-rating of their peers over the past few months. 

Plus, we also asked them to name one high yield stock that hasn't seen its share price materially rise this year. 

Note: This episode was filmed on Wednesday 3 May 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/buy-hold-sell-5-high-yielders-trading-at-compelling-prices 

Buy Hold Sell: 3 rockstars (and 2 past their prime)

The music industry can be savage. The majority of artists work their entire lives to make hardly any money at all. And then there are those who produce a truly great song - only to become a one-hit-wonder.

Come to think of it, Australia's resources and materials sector isn't so different.

So in this episode, Tribeca Investment Partners' Todd Warren and Eley Griffiths Group's Tim Serjeant analyse three stocks that have seen their share prices soar over the past 12 months.

Plus, for a challenge, we asked them to name two stocks they believe are now past their prime.

Note: This episode was recorded on Wednesday 19 April 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-3-rockstars-and-2-past-their-prime 

Why there’s still room in the tank for battery materials

There have been very few market themes in recent years (perhaps apart from buy-now-pay-later) that have whipped the market into a frenzy quite like battery metals.

The promise of widespread electric vehicle adoption and the demand it would create saw the share prices of producers and explorers alike surge.

In 2022 it was the rising tide that lifted all boats, as lithium prices soared, whilst 2023 – so far at least – has been a more sobering experience.

The question now begs, can these commodities resume their upward trajectory, or will they be resigned to suffer the same fate as the many hot commodities that came before?

To unpack these themes, Bell Direct’s Grady Wulff is joined by Tim Serjeant from Eley Griffiths Group and Todd Warren from Tribeca Investment Partners. 

They share their insights on the current state of the commodities markets and two commodities (and stocks) they like moving forward.

And, as an added bonus, they each share a commodity and a stock they believe the market has misunderstood.

Note: This episode was filmed on Wednesday 19 April 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/why-there-s-still-room-in-the-tank-for-battery-materials 

Buy Hold Sell: 3 hot copper stocks (and 2 high-conviction calls)

According to McKinsey, copper demand will increase to 36.6 million metric tonnes per annum by 2031. For context, production from all the copper mines around the globe was just 22 million metric tons in 2022.

Meanwhile, Goldman Sachs believes that copper prices will soar from US$8500/t to US$11,000/t this year.

So how are fund managers investing in copper?

In this episode, Eley Griffiths Group's Tim Serjeant and Tribeca Investment Partners' Todd Warren analyse three of the few copper stocks remaining on the ASX.

And for a bit of fun, they also name their highest-conviction call for the next five years.

Note: This episode was filmed on Wednesday 19 April 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-3-hot-copper-stocks-and-2-high-conviction-calls 

Buy Hold Sell: 3 undiscovered gems (and 2 overhyped duds)

Typically less researched than their large-cap counterparts, small-cap companies can easily rise to 'market darling' status.

We all know the stocks. They’re the ones that the bulls get hold of, causing them to rally to dizzying heights. They’re often the ones discussed in stock chat rooms where warnings about ramping are largely ignored.

Very often (almost universally) a market darling’s price departs significantly from its fundamental reality, and these stocks can become overhyped and overbought. No points for guessing what happens next.

So, how on earth are you meant to sort the wheat from the chaff? Which stocks are growing and have positive outlooks, but aren’t overcooked? And which have run too hard?

To find out, Livewire’s Chris Conway was joined by Yarra Capital Management's Katie Hudson and Prime Value's Mike Younger for their analysis of three undiscovered gems. Plus, they also name and shame two overhyped duds.

Note: This episode was filmed on Wednesday 5 April 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-3-undiscovered-gems-and-2-overhyped-duds 

2 big buys (and why the worst could be over for small-cap investors)

It hasn't been easy being a small-cap investor over the past 12-18 months. Since December 2021, the ASX Small Ordinaries has nosedived around 18%, while the S&P/ASX 200 (which tracks the country's listed large-cap companies) has posted modest gains over the same time period.

So, where to from here?

Well, having rebounded from a fresh low in March, it could be argued that small caps have reached their nadir, offering far more compelling value than their large-cap peers. Given the recent pause in interest rates, it's also worth noting that small caps typically bounce harder when the cycle turns.

To explore these themes and more, Livewire’s Chris Conway was joined by Yarra Capital Management's Katie Hudson and Prime Value's Mike Younger to discuss whether the worst is over for small caps, where they are finding pockets of value, and which stock they got wrong over the past 12 months. 

Plus, for a little bit of fun, we also asked them each to pick one small-cap stock they would go all-in on – but only if they had to, of course.

Note: This episode was filmed on Wednesday 5th of April 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/2-big-buys-and-why-the-worst-could-be-over-for-small-cap-investors