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Experts
MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Cyan Investment Management Director Dean Fergie.
Fergie has a fairly contrarian view and sees value in the least favoured companies across sectors that are not necessarily the ‘flavour of the month’ but that are running close to profitability and have strong balance sheets.
“The fall in the share price only presents a good opportunity for investors to buy into good businesses with scalable, defensive revenue streams which will grow going forward,” he says.
“Investors have been dialling back their growth expectations or trajectories which flows through to the current share price – I think it’s a combination of investor nervousness and keeping cash in bank which started happening towards the end of last year.
“There was some really aggressive tax loss selling which impacted share prices significantly.”
Of course there are businesses out there that are losing a significant amount of money – your BNPLs and high-growth tech stocks like Dubber (ASX:DUB), Fergie adds.
“But there are some businesses that are put into that same risky technology basket even though they’ve got strong underlying fundamentals.”
It all comes down to cherry picking the better stories out there, he says.
One business that has captured his attention is gaming developer, Playside Studios.
“Historically gaming developers in Australia have struggled to do well but Playside has got strong revenues and has made a bit of money on some NFTs in the past,” Fergie explains.
“They are a local Melbourne business but operating successfully on a global scale with brands such as Facebook and Activation Blizzard. We think investors should look at this stock carefully because we think it has a great future.
ALC develops and licenses a range of software products for use in the healthcare sector.
“This stock has come off its highs by about 70% but has been cash flow positive in the last year and we are now starting to see some really strong revenues – this is a good example of a business that has been far too harshly dealt with given its performance metrics.”
“We have recently invested into micro-investing platform Raiz, which has about one billion dollars in funds under management.
“This is another stock that has almost halved from its peak but is operating very close to profitability and has a strong customer base.
“We feel it has a bright future despite the fact the share price has been pretty negative in the last six months.”
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
Experts
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