Buy Hold Sell, by Livewire Markets

Buy Hold Sell: 3 of the ASX’s fastest-growing stocks (and 2 in the dog house)

With interest rates (currently) on pause, investors are once again looking for growth opportunities that can bolster their wallets and compound their cash faster than if they were to leave it in the bank. 

One way investors can gauge the probability of picking a winning stock is the growth rate in earnings per share (or EPS). 

For those not in the know, EPS is calculated by dividing a company's net profits by the number of shares a company has on issue. The growth in this number demonstrates how quickly a company can boost its profits per share. Typically, a growth rate of 20-25% or more is the sweet spot. 

So in this episode, Livewire's Ally Selby was joined by Elvest's Adrian Ezquerro and LSN Capital Partners' Nick Sladen for their analysis of three stocks with high EPS compound growth rates over the next two years. 

Plus, they also name two stocks that could be in the dog house from here. 

Note: This episode was filmed on Wednesday 23 August 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-3-of-the-asx-s-fastest-growing-stocks-and-2-in-the-dog-house/ 

7 growth stocks for the next 10 years

In the midst of reporting season, it's often easy to forget about the long-term potential of some of the market's great compounders. 

Last week, we saw stocks like Megaport (ASX: MP1) and Altium (ASX: ALU) soar 20% in one day on the back of their results, while stocks that disappointed, like Ramsay Health Care (ASX: RHC) and Iluka Resources (ASX: ILU), were punished by the market. 

But by looking through quarterlies, half yearlies and full-year results, investors can see the bigger picture. 

 

Companies like REA Group (ASX: REA) have returned 345% over the past 10 years, while Fortescue Metals Group (ASX: FMG) has lifted 378%, Xero (ASX: XRO) has soared 706%, and Pro Medicus (ASX: PME) has skyrocketed 15,054%. Over that same time period, the ASX All Ordinaries has only lifted 43% (and the benchmark tracking Australia's biggest companies, the ASX 200, has risen 39%). 

So in this episode, Livewire's Ally Selby was joined by LSN Capital Partners' Nick Sladen and Elvest's Adrian Ezquerro for their tips for finding the best growth opportunities over the next decade.

Plus, they also name seven companies for above-market returns over the years ahead. 

Note: This episode was filmed on Wednesday 23 August 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/7-growth-stocks-for-the-next-10-years 

Buy Hold Sell: 3 stocks with high ROEs (and 2 fundie favourites)

In this high-risk, high-inflation, high interest rate world, profitability has never been so important. Companies know this too, meaning they may go to incredible lengths to present the most positive picture possible of financial health or risk being beaten down by short sellers otherwise. 

One measure of financial health is return on equity, or ROE for short. This is calculated by dividing a company's net income (revenues minus expenses and taxes) by shareholder equity (a company's total assets minus its total liabilities), helping investors gauge how efficiently a company generates its profits. 

Generally, the higher the ROE, the better a company is at converting investor capital into profits. But it also depends on the sector average (typically, the sector average or above is considered a "good" ROE). 

So in this episode, Livewire's Ally Selby took the Buy Hold Sell virginities of LSN Capital's Nick Sladen and Elvest's Adrian Ezquerro for their analysis of three stocks with impressive ROE. 

Plus, they also named their highest conviction stock pick for the year ahead. 

Note: This episode was filmed on Wednesday 23 August 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/buy-hold-sell-3-stocks-with-high-roes-and-2-fundie-favourites/

Buy Hold Sell: 5 growing small caps for FY24

Some of the biggest stocks on the ASX started out as minnows. 

Take BHP Group (ASX: BHP) and CSL (ASX: CSL) for example, today two of the biggest stocks in the country. Once upon a time, these stocks were known as Broken Hill Proprietary Company and Commonwealth Serum Laboratories and very few people knew of them. It took years - decades even - of toiling away in relative anonymity before these companies cracked the big time. 

Imagine if you knew then what you know now. 

I'm sure I'm not alone in my daydreams of borrowing Doc Brown's time machine and whizzing back to invest $1000 in the shares of BHP and CSL when they first listed - for those who are curious that was 10 August 1885 for BHP and 30 May 1994 for CSL (although, CSL was founded in 1916). 

Alas, we cannot. But the next best thing we can do is try to identify current small caps that could ultimately grow into tomorrow's large caps, or at least, grow over the year ahead. 

So in this episode, Bell Direct's Grady Wulff was joined by Tim Johnston from Tyndall Asset Management and Tobias Yao from Wilson Asset Management for their analysis of three stocks that could outperform over the next 12 months. Plus, they each name a stock pick of their own. 

Note: This episode was recorded Wednesday 9 August 2023.

On the hunt for tomorrow’s CSL

While there are winds in the sails of the healthcare industry, such as an ageing and wealthy population willing to pay for healthcare services, building a great healthcare business takes a long time.

Drugs and devices require huge amounts of R&D, often with astronomical price tags attached, and the regulatory process is arduous – as it should be when people’s lives are at stake.

Add to these high barriers to entry the dominance of the incumbents, and it makes you wonder why anyone would try to build a healthcare company in the first place. 

Fortunately, things change. Existing technologies evolve, new technologies are born, and opportunities are created for emerging companies to enter the fray.

In that vein, this episode of Buy Hold Sell is focused on the hidden gems hidden within the smaller end of the healthcare market. 

Bell Direct's Grady Wulff is joined by Tim Johnston from Tyndall Asset Management and Tobias Yao from Wilson Asset Management for their tips on analysing stocks within the sector, their thoughts on traditional plays versus biotechs, as well as their top picks for today's market. 

Note: This episode was recorded Wednesday 9 August 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/on-the-hunt-for-tomorrow-s-csl/ 

Buy Hold Sell: 5 emerging healthcare heroes

What do we all want? To live long, healthy, and prosperous lives.

Increasingly we’re able to fulfill the first two elements of that triumvirate given the advances in modern medicine and healthcare services.

What’s more, is that we have an ageing population in many parts of the world that not only have the desire for longer and healthier lives, but also the capacity to pay for them.

And that is all good news for the healthcare sector, which enjoys the benefits of said tailwinds from increases in spending on healthcare as a share of GDP.

But not every company can be a healthcare giant like CSL, Cochlear, or ResMed. At least not yet.

In this episode of Buy Hold Sell, we’re running the ruler over healthcare names that, whilst not as big as those mentioned above, sure are mighty.

To do that, we’re joined by Tobias Yao from Wilson Asset Management and Tim Johnston from Tyndall Asset Management.

Note: This episode was recorded Wednesday 9 August 2023. You can read an edited transcript below:

https://www.livewiremarkets.com/wires/buy-hold-sell-5-emerging-healthcare-heroes 

Buy Hold Sell: 5 stocks rallying hard

It’s an age-old debate - technical or fundamental analysis to source stock ideas. Or put another way, do you prefer charts or balance sheets? 

The chartists out there will tell you that everything is captured in the price, so that and volume are all you need to pay attention to. On the other side of the debate, those who employ them will tell you that fundamentals drive prices and help you to determine intrinsic value. 

Ultimately, both methods are used to research and forecast future trends in stock prices and, increasingly, investors are using both to determine whether a stock is up to muster. 

In this latest edition of Buy Hold Sell, we're putting a handful of cap stocks to fund managers that are top right on the chart and have been rallying hard. 

Should they be there and, more importantly, can they keep going or are they overcooked? 

To answer that question, we’re joined by Ben Rundle from Hayborough Investment Partners and Will Granger, from Airlie Funds Management.

Note: This episode was recorded Wednesday 26 July 2023. 

The secrets to picking a winning small cap (and 2 fundie favourites)

There is no perfect recipe for generating profits. 

Value, growth, quality, momentum, long, short, large-cap, mid-cap, small-cap, conservative, moderate, aggressive - the list of investment styles goes on. And the factors fund managers use to identify stocks that meet their investment style can be equally elaborate. 

So in this episode of Buy Hold Sell, Livewire's Chris Conway is joined by two small-cap managers - Ben Rundle from Hayborough Investment Partners and Will Granger from Airlie Funds Management. 

They discuss their favourite factors when assessing small-cap opportunities, as well as those that are misunderstood or overused by investors.  

Those factors are then put to work, with our guests each naming a stock that ticks all their boxes. 

Note: This episode was recorded Wednesday 26 July 2023. 

Buy Hold Sell: 5 stocks with fantastic fundamentals

For nearly 30 years, Martin Roth has published the book ‘Top Stocks’, highlighting 100 ASX companies that are considered to be financially sound. 

In conducting the analysis, the share price of a stock is ignored and the focus is on companies with strong balance sheets, profitability, low debt levels, and sustainable dividends.

More specifically, a "Top Stock" must be:

• Publicly listed since 2017
• A constituent of the All Ordinaries Index (i.e. Top 500 company by market capitalisation)
• Boast a Return on Equity (ROE) ratio of at least 10% in the most recent financial year
• Have a Debt-to-Equity (D/E) ratio of less than 70%

We’ve used similar criteria, with help from the Market Index website, to identify fundamentally sound small caps. 

 

So, which stocks make the cut? And are they all worth buying right now?

To answer those questions, Ben Rundle from Hayborough Investment Partners and Will Granger, from Airlie Funds Management joined Livewire's Chris Conway. 

And just because we know you love a stock pick, they also highlight their top stock with fantastic fundamentals. 

Note: This episode was recorded Wednesday 26 July 2023. You can read an edited transcript below: 

https://www.livewiremarkets.com/wires/buy-hold-sell-5-stocks-with-fantastic-fundamentals 

Buy Hold Sell: 5 ASX stocks for the ”goldilocks” scenario

The most anticipated recession in history still hasn't turned up. All those calls about a US-led recession starting in 2023 have been pushed back. In some cases, those calls are being pushed as far back as the second half of 2024. Others, like Goldman Sachs, have just cut the odds of a US recession occurring altogether - it's now down to a 20% chance in its eyes. 

Here in Australia, disinflation continues to occur with the headline print recently coming in at +5.6% year-on-year. Sure, it's not the RBA's cherished 2-3% target but it's a lot nearer than the 8% we were experiencing at the end of last year. The unemployment rate is still below 4% and the economy is still expanding.

Corporate earnings also continue to be resilient and earnings guidance statements so far this confession season continue to provide an impetus for this market to grind slowly but surely higher in spite of all the headwinds. 

All of this begs an important question - what if the optimists were right all along? And if they are, what stocks do you want to own in that dream scenario?

In this edition of Buy Hold Sell, we're talking about which ASX-listed stocks you would want to own (or not own) in a Goldilocks scenario. Joining moderator Hans Lee are Andrew McKie from Elston Asset Management and Rob Crookston from WILSONS. 

Note: This episode was taped Wednesday 12 June 2023.