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 VP Capital co-founder, John So.


What’s hot right now?

Over the last four to six months tech and Software-as-a-Service stocks (SaaS) have taken a bit of a hit, trading below their COVID lows.

But VP Capital’s John So says the interesting thing is most of these businesses haven’t deteriorated – in fact, they’ve improved and continue to grow.

“It’s just a question of whether they deserve to trade at a different multiple.

“Sometimes stocks become cheap because the business situation has worsened, like with the ecommerce sector, however with tech and Software-as-a-Service companies, a lot of them are growing as they always have yet trading at five-year lows.

“They may continue to burn cash flow, but with the companies I am going to talk about, the cash burn isn’t at a severe level, and they have no debt.

“A couple of these companies I am going to talk about are even on the cusp of breaking even,” he adds.

“Which means investors would be picking these stocks up very, very cheaply.”

Like all things contrarian, it is hard to get the timing right – if you take a position today, you may not see results next month let alone next week.

However, So believes as the corporate world normalises, these Software-as-a-Service companies – that have always seen good growth trajectory – will continue to see uptake of their services and continued revenue growth.


Top picks


Whisper is a cloud based omni-channel communications-as-a-service platform provider for Australian and New Zealand corporates.

It combines internet and mobile phone messaging tools that we use on a day-to-day basis, whether it’s SMS or email or social media, and places them all onto one platform.

“Rather than having to deal with different communication tools, you have one space to more quickly control and better position your communications for customers, staff, workflow management and so forth,” So explains.

“The company has proven to be a perennial revenue grower over a period of more than five years.

“Its revenue consistently grows at 20 to 30% per annum and it has had some pretty big Australian and US corporate names as customers such as Qantas, Disney, and Australia Post with a very low turnover rate at around 2 or 3 per cent.”

So explains this is testament to the fact that once a corporate embeds the Whispir omni-channel onto its communications platform, the business isn’t going to change because it’s not overly expensive and is convenient for staff.

“A lot of these unprofitable software or platform businesses tend to trade on revenue multiples and before the stock market rout earlier this year, these multiples were anywhere between 8 to 12 times revenue on the ASX,” So says.

“That multiple has generally fallen to around three to four times, so in other words, the average software company has probably fallen around 60 per cent in share market value.

“Whispir, on the other hand, trades on slightly more than one times its $65 million annual recurring revenue and is arguably at more than 50 per cent if not a 70 per cent discount to the rest of its ASX peers.”

Another big plus is that WSP is on the cusp of earnings breakeven.

“In the company’s recent release, if revenues were only 10-15 per cent higher it would have reached break-even on a quarterly basis AND its share price is at a five-year low.”



Bigtincan trades more expensively than Whispir at two times recurring revenue and has managed to springboard its recurring revenues significantly in the past two years from an acquisition, So explains.

“If they had not done the acquisition, the recurring revenues still would have grown by more than 20 per cent – so another perennial growth company like Whispir, but of course it doesn’t generate profits and continues to have a cash burn situation,” he says.

“That said it has enough cash to see it through for at least another two years which has always been the case and isn’t a particular concern.”

The company provides AI powered sales platforms, connecting sales teams with each other and to promotional information released by head offices in various corporate organisations.

“This provides a one stop shop to access all information and materials corporates may need when making sales to another mid-sized company or potential customer.”

Again, the share price has taken an incredible dive with the latest round of interest rates bringing the share price down to near its COVID lows.

“Bigtincan is probably behind Whispir in terms of being at the point of earnings breakeven but it’s probably only a year or two away at the rate that it’s growing – every year it tends to grow around 15 to 30 per cent depending on the year, just on organic growth. The company has guided annual recurring revenues to reach $137 million plus this financial year.”



Dubber is another cloud-based software company that provides recording technology to corporates and is embedded and delivered through telcos such as Optus and internet video calling tools such as Microsoft Teams.

It is also a standard feature for some of Cisco’s products and cloud calling subscriptions.

“For the ASX, it is a company that generates relatively meaningful sales with annual recurring revenues of again close to $60 million.

“Dubber hasn’t had quite the growth trajectory like Bigtincan or Whispir recently, but it still has been growing between 10 to 15% per annum and in the past financial year it grew closer to 25%.

“They trade on a little bit over two times annual recurring revenue, which is a discount to the ASX market currently and a very big discount to companies trading at eight to 12 times revenue multiple before these interest rate rises,” So explains.


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