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MoneyTalks: Why Red Leaf Securities reckons these three stocks offer value
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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 Red Leaf Securities director Jonathon Howe.
What’s hot right now?
Howe says there’s no real sector which is hot right now with markets currently facing higher than normal turbulence driven by rising inflation risks brought on by surging oil prices, and the 10-year Treasury yield hitting pre-2008 levels.
“Inflation, spurred by supply chain issues and pent-up demand, prompts fears of further central bank tightening, or at least less dovish than they were mid 2023, causing market jitters,” he says.
“Oil price hikes, driven by geopolitical tensions and supply disruptions are also threatening consumer spending.”
He says meanwhile, surging 10-year US treasury yields offer safer returns, luring capital away from equities.
“Amid these challenges, investors must maintain a long-term outlook, diversify portfolios, and stay informed to navigate this uncertain terrain, acknowledging that market resilience has prevailed in the past,” he says.
However, he believes while no real sector stands out as hot right now the one which should recover the quickest when the rising interest rate cycle ends is technology, which has had a rather large selloff in the past 18 months.
Jaxsta (ASX:JXT)
Howe says JXT is a potentially a billion-dollar opportunity with the the world’s largest dedicated database of official music credits (366 million plus), 60 million recordings, Vinyl.com with 52k of vinyl titles and Vampr, considered the LinkedIn for musicians.
The company also has the support of richlister and WiseTech Global (ASX:WTC) founder and CEO Richard White, who has a 10% stake along with US based Songtradr and its CEO Paul Wiltshire.
Josh Simons, the founder and head of Vampr, which JXT acquired on June 1, was appointed CEO of the company following its acquisition.
A musician himself, 32-year-old Simons co-founded Vampr in 2015 with Hunters and Collectors guitarist Barry Palmer.
“JXT is potentially a billion dollar opportunity with the world’s largest database of music credits,” Howe says.
“With notable investments from Richard White of 10% and US-based Songtradr and its CEO Paul Wiltshire both with significant stakes, it’s clear that seasoned professionals in the tech and music industry believe in Jaxsta’s mission.”
Mad Paws (ASX:MPA)
The online digital platform offers a comprehensive pet service marketplace, catering to pet owners’ needs such as pet sitting, dog walking, daycare, and grooming.
MPA has a diverse revenue structure that encompasses an e-commerce platform called Pet Chemist, specialising in providing prescription pharmaceuticals and over-the-counter healthcare products for pets.
Additionally, MPA is steadily increasing its subscription-based revenue through various verticals. These include Waggly toys & treats, Mad Paws Insurance, Dinner Bowl for fresh pet food options, and Sash for pet beds and a range of accessories.
Howe says its wholly-owned online pet care supplier Pet Chemist, is Australia’s leading online pet pharmacy.
“MPA is the ASX’s only one stop shop for pets outside of vets and the company keeps going from strength to strength but it is not reflected in the share price,” Howe says.
“MPA is on track for cashflow breakeven/profits in its next quarterly, so we are certainly due a re-rate from these levels if they can show consistent revenue growth and profitability.”
Platinum Asset Management (ASX:PTM)
PTM is one of the largest equity investors on the ASX. The firm focuses on international shares or according to its website “more simply put we provide portfolios of listed companies from around the world”.
“PTM is a beaten down fund manager with circa $17.5 billion in FUM and backed by Kerr Neilson, one of the elite fund managers of our time and has been blitzed from its $5.50 highs,” Howe says.
“Currently trading at $1.24 and also has a buyback underway plus a solid dividend yield (circa 10% here), shares look really attractive at current levels for portfolios.”
The JXT, MPW, PTM share price today:
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
