Buy Hold Sell, by Livewire Markets

Buy Hold Sell: 5 Livewire reader requests

With a growing army of investors hungry for knowledge and insights, we're getting more and more queries to cover specific stocks from fans of Livewire.

In this episode of Buy Hold Sell, Matt Williams of Airlie Funds Management and Sean Fenton of Sage Capital dedicate their time to our readers and have a red-hot crack at five stocks you want an opinion about.

They include 1) Wesfarmers - which Matt reckons operates the "best business in Australia"; 2) Beach Energy - whose revenues are holding up thanks to its solid contracts and net cash on the balance sheet; 3) CSL – a company that Sean believes will rebound and continue to grow strongly; 4) Coca-Cola Amatil – a consumer business that’s seen deteriorating profitability, and 5) A2 Milk - a market darling until just recently.

Visit Livewire Markets for the edited transcript, podcast and more great insights.

Note: This video was recorded on 7 October 2020.

4 beaten down sectors (and if now's the time to buy)

The ramifications of Covid-19 have been felt across economies around the globe, however, it has become evident that not all sectors have been treated equally. With extended lockdown and border closures looking set to continue, is there any hope for the most vulnerable industries? Tourism, REITs, banks and energy have all fallen victim to the shocks in consumer spending, government policy and travel restrictions brought about by the pandemic.

Despite these short-term hardships however, there’s an abundance of value and opportunity for the patient investor willing to dig into some of these distressed pockets of the market, explain Matt Williams from Airlie Funds Management and Sean Fenton from Sage Capital. In this thematic, Matt and Sean discuss whether they are bullish or bearish across the four worst affected sectors, as well as the stocks that are set to benefit from a return to relative normality.

Visit Livewire Markets to access the edited transcript or podcast for this episode.

Note: This episode was filmed on 7 October 2020.

Buy Hold Sell: 7 stocks for offence and defence

It goes without saying that the outlook for markets and the global economy is highly uncertain due to COVID-19. The bulls believe we're in for a V-shaped recovery in 2021 if 'Operation Warp Speed' delivers a vaccine by year-end. On the other hand, there could be no cure. Or one which is ineffective or refused by a large segment of the population.

In an investing context, one strategy to play an uncertain outcome is to build a portfolio comprising quality companies whose earnings can re-rate materially in an optimistic scenario, whilst holding defensive stocks if the vaccine thesis doesn't pan out.

In this episode, Sean Fenton of Sage Capital and Matt Williams of Airlie Funds Management discuss seven companies that can set you up for offence and defence. They kick-off by discussing Qantas, Coles and Cochlear, and then each bring their best growth idea and their top defensive stock.

Visit Livewire Markets to access the video and edited transcript for this episode.

Note: This interview was recorded on 7 October 2020.

Buy Hold Sell: 5 of the most traded stocks

For months now several of Livewire's contributors have consistently warned about increasingly stretched valuations across growth and technology stocks. And it looks like investors are finally paying attention.

During September, momentum-driven names including BNPL and e-commerce stocks largely kept out of the limelight insofar as the most-traded stocks on share trading platform Bell Direct go. Instead, investors rotated into beaten-down and defensive names.

Here, Jessica Amir from Bell Direct shares what some of the most popular ASX stocks were during the month, and gets Michael O'Neill from Investors Mutual and Neil Margolis of Merlon Capital to opine whether these companies offer attractive right now. The companies discussed range from a critical infrastructure asset, to a major bank, and an industrial business proving resilient amid the pandemic.

Visit Livewire Markets for the edited transcript and video for this episode as well as more great insights. 

Note: This episode was filmed on 23 September 2020.

Building a sustainable income portfolio

Since 2010 traditional blue-chip yield stocks have become notoriously unreliable for consistent income.

Take for example NAB's dividend, which peaked at $1.98 in FY 14 before being chopped to $1.66 and then $1.13 in the prior two financial years. That's a 42% pay cut compounded with a significant decline in the bank's share price. Meanwhile, Telstra and Woolworths' dividends are 48% and 32% lower, respectively, since peaking some five years ago.

This volatility of income underscores why it's critical for investors to assess the sustainability of cash flows when considering dividend stocks, especially now given the level of stimulus sloshing around the economy, according to Neil Margolis of Merlon Capital and Michael O'Neill of Investors Mutual.

In this thematic, they break down what they look for in yield stocks, how they manage risks within their strategies, sectors they’re looking at today for income, and their top ex-20 ideas for sustainable dividends and capital growth.

Buy Hold Sell: 6 sustainable dividend stocks

Dividend sustainability has become front-of-mind for investors as Australian companies grapple with the short-term hit to earnings and payouts as a result of COVID-19 and a host of long-term issues such as competition and structural changes in consumer behaviour.

In this episode, Jessica Amir of Bell Direct sits down with Neil Margolis of Merlon Capital and Michael O'Neill from Investors Mutual to discuss six income candidates and whether they can be trusted for sustainable dividends.

They include 1) Fortescue Metals Group - Which is facing questions around how long elevated iron ore prices can last; 2) Telstra - Whose current dividend is under doubt due to earnings and margin pressures; 3) Medibank Private - A business swimming in cash but contending structural issues impacting insurance affordability; and 4) AMP - A company that's been in the news for all the wrong reasons. Neil and Michael also each bring their one top stock idea for sustainable dividends, trading at an attractive valuation right now.

Visit Livewire Markets for the edited transcript and video for this episode, plus more great content.

Note: This interview was recorded on 23 September 2020.

Buy Hold Sell: 5 ETFs for a strong core

Blame Canada! That's where exchange-traded funds (ETF) came from; the inaugural fund, known as Toronto Index Participation Shares (TIPS), listed in 1990 and tracked the country's biggest companies. In 1993 State Street replicated this idea for the S&P 500, and for a long time ETFs were spruiked as a low-cost, core investment.

While ETFs now track everything weird and wonderful, today James Whelan of VFS Group and Charlie Viola of Pitcher Partners go back to the basics and offer tips on ASX ETFs for core investments.

They include 1) Vanguard Australian Shares Index ETF – A widely-used ETF for broad Australian market exposure; 2) iShares S&P 500 ETF - A popular choice for access to U.S. stocks, and 3) ETF Securities Physical Gold ETF - A commodity product riding strong interest in the precious metal. They each also bring one ETF that they expect will generate solid returns for long-term investors.

Visit Livewire Markets to access the edited transcript and podcast for this episode.

Note: This interview was recorded on 9 September 2020.

Buy Hold Sell: 5 quality small caps winning market share

Who says boring can't be beautiful? While much of the attention in ASX small caps has centred around Buy Now, Profit Later and e-commerce stocks, a handful of quality businesses are on a tear.

In this episode, Gary Rollo of Montgomery and Chris Stott of 1851 Capital discuss high-calibre companies with a proven track record of profitability and shrewd management teams making the most of opportunities presented by COVID-19.

They include: 1) ARB Corporation - A 4WD accessories manufacturer and distributor whose share price is being driven higher by a record order book; 2) Ingenia Communities - Poised to benefit as domestic tourism opens up; and 3) Macquarie Telecom - A cloud boom winner investing heavily to cope with higher demand.

Chris also reveals the "best micro cap opportunity in the market" right now while Gary brings a stock whose savvy management team is capitalising on a beaten-down market.

Visit Livewire Markets for the full transcript and video of this episode.

Note: This interview was recorded on 9 September 2020.

Tips for using ETFs in an investment portfolio

Exchange-traded funds (ETFs) are growing rapidly in popularity among Australian investors. The ~240 ETFs on the ASX hold nearly $70 billion in assets. Of course, not all funds are created the same. Like stocks, some of them have been utter duds and delivered poor returns as they track niche parts of the market or due to flawed and complicated methodologies. 

As the level of adoption and choice increases, so too does the need for high-quality information that can help investors make better choices with ETFs. That’s why we’ve brought together investment advisers James Whalan of VFS Group and Charlie Viola of Pitcher Partners. They discuss how to navigate the world of ETFs, what to look for in individual funds and how they use them in portfolios. They also each nominate the ASX-listed ETF they would hold if they had only a single choice of fund.

Visit Livewire Markets to access the video and edited transcript for this episode.

Note: This interview was recorded on 9 September 2020.

Rotate or stay? Playing the small cap rally’s next phase

Since the market bottomed in late March, the S&P/ASX Small Ordinaries Index has soared over 40%. However, it's evident that the rebound is thus far two-tiered in nature; e-commerce and technology-oriented stocks have done much of the heavy lifting and left nearly everything else in their wake.

The key question for investors now is whether the dichotomy in sector performance presents an opportunity to take profit from the exuberantly expensive 'online' stocks and redeploy it into the laggards... or is it the case that the world really has changed and the COVID-19 winners will keep on winning?

Here, Gary Rollo of Montgomery and Chris Stott from 1851 Capital discuss this thematic and whether its time for investors to make a big portfolio pivot into the small caps which have been behind.

Visit Livewire Markets to access the video and edited transcript for this episode.

Note: This episode was recorded on 9 September 2020.