Let’s start with a peek outside the ASX, and that’s fine because Aussies are increasingly upping their stakes in US markets. In particular, benefiting from their continued loyalty to big tech in 2023.

eToro tells us the biggest risers in terms of attracting the Aussie investors in 2023 are Microsoft, with an 11% increase in holders from Q4 2022, Coca-Cola with a 10% increase, and Alphabet, with an 8% increase.

A new contender could soon be rising in the form of the ultimate fighting mega-merger between UFC and WWE.

The US$21 billion will see the formation of a newly listed company on the NYSE called TKO. Stake analyst Megan Stals told Stockhead’s Eddy Sunarto TKO would be the most obvious choice for those that want pure play exposure to the merged entity.

If you want to jump in early though, the two players trade under the tickers NYSE:WWE and UFC owner Endeavor Group (NYSE:EDR). Both saw strong growth in the past year, reaching a record US$1.3 billion and US$1.1 billion of revenue respectively.

Endeavor will become the primary stakeholder and Stals said there are, as always, some risks. For example, the deal values WWE some US$1.6 billion above its market cap, and might even fall foul of regulatory concerns.

It’s certainly a niche stock. The only other US-listed stock that has offered similar exposure is Formula 1 Group (NYSE: FWONA), which was listed in the US in 2016. It’s barely looked back, up some 255% since listing, helped largely by the excellent exposure gained from the hit Netflix series, Drive to Survive.

Blair Modica

Director, adviser business, BetaShares

Developed by US artificial intelligence company OpenAI, ChatGPT is the fastest growing consumer application in history, reaching 100 million monthly active users just two months after its November 2022 launch.

The AI sector’s value was estimated at US$119.78 billion in 2022 and is expected to grow to $1.6 trillion by 2030 with a compound annual growth rate of 38.1% from 2022 to 2030.

So with the AI apocalypse coming, do you beat the bots, or join them? Or at least profit off them?

There’s not a lot of exposure on markets to pure-play AI developments. But Modica said an allocation to the BetaShares NASDAQ-100 ETF (ASX:NDQ) offers exposure to Microsoft, NVIDIA, and 98 other leading global companies.

And the BetaShares Global Robotics and Artificial Intelligence ETF (ASX:RBTZ) could add more pure play exposure to artificial intelligence companies.

Stockspot senior manager Marc Jocum would add the GlobalX ROBO Global Robotics & Automation ETF (ASX:ROBO) to that list.

He said RBTZ is the cheapest ETF in this category charging 0.57% per year but does come with slightly higher spreads.

ROBO’s fees are more expensive at 0.69% due to the more active nature of the investment strategy.

Glossing over the bad times

 

We spoke recently in this column about “The Lipstick Effect”, a phenomenon – real or imagined – noted in the 1999-2000 recession when lipstick stocks went on a good run.

The theory is in times of economic uncertainty we cut back on our big luxuries and focus more on cheap stuff that makes us feel good.

A couple of weeks ago, broker Taylor Collison put an Outperform recommendation on Silk Laser Australia (ASX:SLA), viewing its $2.22 share price as an opportunity to buy into the highest quality self-care operator in a growth market.

Good spot. On Thursday, it popped 23% to $3 on news Australian Pharmaceutical Industries, a wholly owned subsidiary of Wesfarmers, wanted to buy 100% of it for $3.15 per share.

Since listing in December 2020, SLA has expanded its network of clinics providing laser hair removal, cosmetic injections and skin treatments from 50 to 142. It also just saw its first half revenue rise by 21% and statutory NPAT by 22%.

We did a quick run round the other “beauty adjacent” stocks on the ASX, but this is just for reference purposes only, and not financial advice. The standouts were:

Adore Beauty (ASX:ABY): A beauty focused e-commerce website that has evolved to an integrated platform that partners with a broad and diverse portfolio of more than 270 brands and over 12,000 products.

Despite headwinds, Adore Beauty delivered record sales during the four-day Cyber sales event last November.

And Lovisa Holdings (ASX:LOV), a retailer of fashion jewellery and accessories, has seen its share price surge by 50% over the past year.

In the last half, Lovisa’s revenue rose by 45%, while its Net Profit After Tax has gone up by 32% to $47.7m.

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees 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.

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