Money Talks: Here’s Angie Ellis with her top semiconductor, air freight and fintech stocks for 2021
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MoneyTalks is Stockhead’s regular recap of the ASX stocks, sectors and trends that fund managers and analysts are looking at right now.
Today, investment manager Angie Ellis at 80-20 Investments talks about her favourite sectors and stock picks for 2021.
Market Cap: $177m
Ellis’s first pick.
There’s a global semiconductor shortage right now and the industry could be worth $1 trillion by 2030.
It’s great news for semiconductor stocks – and the companies that make the machines or supply the equipment those companies need.
Making semiconductors requires precise flows of gas to shape the underlying wafer on which the circuits are built. Pivotal makes gas flow monitoring and control technology to enable that.
The company recently announced it’s considering undertaking an initial public offering of its common stock in the US and a dual listing on NASDAQ, and recently raised $6.7 million via a share placement.
“Pivotal Systems recently presented at the Roth Capital London Virtual Conference – only three ASX listed companies Lake Resources (ASX:LKE), Piedmont Lithium (ASX:PLL) and PVS were on the prestigious list of presenters,” Ellis said.
“Two fund managers I follow – Perennial and Viburnum Funds – have increased their holdings.
“Perennial has increased from 7.06% to 9.11% and Viburnum Funds have gone from 15.16% to 16.42%.”
Ellis said the recent appointment of CFO Ron Warrington – who has Nasdaq IPO and M&A experience – is a good sign PVS can execute on its US IPO plans.
Market cap: $50m
Ellis’s second pick is Australia-Asia air freight logistics player Wiseway.
“Wiseways is an integrated freight and logistics operator offering a one-stop shop for their customers’ day-to-day logistics needs,” Ellis said.
“In August 2021, Wiseway completed its first cross-border acquisition of TAF, a Singapore-based airfreight company that has been serving the SE Asia market for 30 years.
“TAF runs its main operations from a customs-bonded warehouse, strategically located within Singapore Changi Airport’s Airfreight Centre and provides a full range of services including customs brokerage and clearance, local transportation, and cross-border trucking.
“Revenue for FY21 was $126.0 million, up 23.5%, driven by the key growing segments of perishables, imports, and road transportation. NPAT $1.8m.”
Plus, the company has opened a branch in LA and appointed Robert McNutt to the board – whose experience with M&A Ellis expects will help the company expand in the US.
“Freight and logistics have shown resilience through the pandemic,” she said.
Market cap: $44m
Ellis also flagged global fintech player Change Financial as one of her top picks.
“I bought into Change Financial when they acquired the Wirecard business back in September last year,” Ellis said.
“A friend had worked at Wirecard Australia for many years, and I had always thought it was a fantastic business – sticky product, global customers, Big 4 banks plus big retailers in a growing industry, so I was excited by the opportunity to invest in it finally.
“I understood the testing platform Paysim which enables financial institutions to test their payment systems – it simulates the full transaction lifecycle, enabling banks and fintechs to complete end to end testing of their payment platforms and processes.
“Plus, the average client tenure sits at over eight years.”
Ellis said acquiring Wirecard also gave CCA control over a strong global payments business that generated recurring revenues of $9.3m in the 2020 financial year.
“When they bought the business, it had 120 customers across 35 countries, including the Big 4 Australian banks and major supermarket operators and now it has 136 clients in 36 countries,” she said.
“They are focused on the US, Latin America, SE Asia and Oceania markets and the total addressable market is over US$10 trillion.”
Ellis also chucked in a bonus pick in OpenLearning.
“I bought into the IPO after meeting Adam Brimo at TechKnow a few years ago,” she said.
“I have completed a few of their training courses to get an understanding of what makes them unique, and I love the platform and the community feel.
“Super impressed with this company. They are growing revenue – up 120% YoY to $1.135 million.
“They have retained key uni clients and have a prestige client base including the University of Wollongong, UNSW & Afterpay.”