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Speaker 1: Welcome to Fear and Greed. Some are investing series brought

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Speaker 1: to you by VANTA specialists in compliance lead Growth. I'm

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Speaker 1: Sean Elmer. There are some fascinating stories and great opportunities

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Speaker 1: for investors in mid market stocks on the AX. So

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Speaker 1: today we're getting an insight into a few of those companies.

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Speaker 1: As always, this is general information only and you should

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Speaker 1: seek independent advice before making investment decisions that. Jacob Kkanas

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Speaker 1: is the director of Equity Research at Jardin Australia. Jacob,

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Speaker 1: welcome back to Fear and Greed.

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Speaker 2: Hi, Sean, thanks for having me.

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Speaker 1: Let's jump right into it. Well, actually, bid market. I'm

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Speaker 1: defining that as kind of after the top thirty stocks

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Speaker 1: and probably before the top four one hundred and twenty

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Speaker 1: or thereabouts if we jump into it. Brambles one of

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Speaker 1: my favorite companies because all I do is make palettes.

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Speaker 1: Well they probably do more than that, but I think

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Speaker 1: that's a pretty cool thing to do.

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Speaker 2: Absolutely, it's phenomenal still for a post war technology that

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Speaker 2: few pieces of lumbar dictate global supply chains. I think

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Speaker 2: it's one of Australia's great export stories. Ship in its

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Speaker 2: own rights is the leading market share for palettes in

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Speaker 2: the US and one of the greatest continental contenders over

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Speaker 2: in Europe. So it's phenomenal, Like I said, for an

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Speaker 2: increasingly technocratic and technology driven society, that we've got four

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Speaker 2: boards of wood bang together that orientate, however, on acts

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Speaker 2: in the supply chain.

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Speaker 1: Where is Brambles up to? Because it's had its ups

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Speaker 1: and downs over the years, what do you think of it?

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Speaker 1: As we end twenty twenty four heading to next year,

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Speaker 1: what do you think about Brambles?

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Speaker 2: Yeah, we've got a record higher share price sean, we're

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Speaker 2: starting to see the stock trade back in line with

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Speaker 2: its historical averages from a multiple spaces, which is usually

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Speaker 2: how investors look at these things and look. I'd summarize

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Speaker 2: it as Graham Chipchase, the company CEO, and John Mullen,

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Speaker 2: its current chair, as doing an amazing job not only

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Speaker 2: to generate cash flow out of a very capital intensive business,

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Speaker 2: but to also keep its moat defended and its moat

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Speaker 2: as a network business, so it relies on having the

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Speaker 2: most palettes in the most areas so that customers can

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Speaker 2: use them. It's defended its moat really intelligently through proper

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Speaker 2: disciplines around capital, but also making sure that they price

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Speaker 2: for the risks in their market. And as we spoke

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Speaker 2: just before we ramp up, this is a company that

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Speaker 2: can lose palettes. You reflected Sean that whatce upon a

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Speaker 2: time they lost a million palettes one year. This is

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Speaker 2: a common phenomenon and I think it's one of the

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Speaker 2: challenges where you've got physical assets in a global supply

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Speaker 2: chain that things can go missing. But to Graham and

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Speaker 2: John's credit, they've done an excellent job ensuring that there's

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Speaker 2: not that much leakage out of the business anymore.

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Speaker 1: Jacob, I know you like Aurora. Explain what Aurora does

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Speaker 1: and the good and bad of Aurora.

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Speaker 2: Yeah, looks simplistically now sewn. Aurora is a global beverage

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Speaker 2: bottling company. Historically they've been many things. It had come

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Speaker 2: out of Amcor, also another famous Australian export. Originally it

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Speaker 2: had focused on fiber. It had a distribution and value

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Speaker 2: added marketing services business in the US that it just solved.

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Speaker 2: It announced a couple of weeks ago that they're going

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Speaker 2: to commit capital to buying ten percent of their shares

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Speaker 2: outstanding with the proceeds from the North American sale. So

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Speaker 2: now it's a glass bottler. Really and Can's business focused

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Speaker 2: on the beverage segment.

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Speaker 1: Wait, so where does that men do? I don't know

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Speaker 1: how it makes its money.

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Speaker 2: How does it make its money? Okay, this is a

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Speaker 2: great question. So Penfolds is a great example for the

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Speaker 2: Australian business. They're one of the great Australian wine exporters.

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Speaker 2: Aurora will exclusively provide them the bottles for their red wine,

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Speaker 2: a lot of the prestige but also a lot of

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Speaker 2: the mass market wines that get exported out of Australia.

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Speaker 2: They also purchased a business called Saviglass that's based out

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Speaker 2: of France, but it has a global production supply chain

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Speaker 2: and the way to think about Savaglasses that services the

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Speaker 2: premium beverage market. So if you've ever had an expensive cognac,

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Speaker 2: or if you've ever had an expensive tequila or vodka,

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Speaker 2: chances are it's Aurora's product from Savaglass. So brands that

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Speaker 2: come to mind there would be Grey Goose, which is

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Speaker 2: one of their famous bottles that they do with the

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Speaker 2: nice shaded and frosted glass. That's proprietary technology to Aurora.

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Speaker 1: Wow, what are the risks on Aurora?

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Speaker 2: The risks at the moment, Sean. Obviously, with the global

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Speaker 2: demand environment, as interest rates had come up, people would

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Speaker 2: pulled back, surprise, surprise on their eight hundred dollars bottles

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Speaker 2: of Cognac all of a sudden. It's not o fay

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Speaker 2: to have Hennessy sitting around the house in a cost

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Speaker 2: of living crisis. So one of the risks still is

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Speaker 2: that there's a little bit of a wash of those

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Speaker 2: inventories that lvmh Remy Contro had anticipating that demand would

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Speaker 2: stay higher and what it has been.

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Speaker 1: So from your top shelf Cognacs to clean Away, Yeah,

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Speaker 1: that's quite the jump.

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Speaker 2: Look, there's a lot of money to be made in both.

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Speaker 2: Cleanaway is a really interesting company for many reasons Sean.

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Speaker 2: It's the last remaining listed global waste player in Australia.

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Speaker 2: So as our super funds grow and as they look

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Speaker 2: for sustainable investments but also defensive investments, Kleanaway's one that

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Speaker 2: seems to be screening really well. It's got two parts

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Speaker 2: of its business that are really interesting. There's a solid

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Speaker 2: waste collection, so the blue trucks that come and wake

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Speaker 2: everyone up at five am in the morning, that's clean Away.

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Speaker 2: They do the council runs, but they also have a

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Speaker 2: really interesting duo ballistic health business. So there's two companies

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Speaker 2: in Australia that collect all the medical waste from elective surgeries.

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Speaker 2: Kleanaway is one of them. And what I never knew

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Speaker 2: before I started covering the companies, a lot of this

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Speaker 2: waste is really heavy, but it has to go away

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Speaker 2: and get incinerated so that it stays healthy for all

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Speaker 2: of us and prevents contamination. So Keleanway's in a really

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Speaker 2: interesting spot. It's got great management. It's seen through some

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Speaker 2: really disruptive times from labor and operating disynergies, but it

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Speaker 2: feels like we're getting through the end of those.

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Speaker 1: It's just that.

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Speaker 2: Investors are in this current debate about whether or not

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Speaker 2: that's priced into the share.

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Speaker 1: Price valuations everything. Jacob, thank you for joining us this morning.

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Speaker 2: Thank you, Sean.

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Speaker 1: That was Jacob kakanis Director of Equity Research at Jarden Australia.

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Speaker 1: Remember to get your own independent advice before making investment decisions.

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Speaker 1: This is fear and greed. Some are investing series brought

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Speaker 1: to you by vant Vanta automates Compliance for frameworks like

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Speaker 1: ISO twenty seven one SoC to CPS two, three, four,

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Speaker 1: and tac teat dot io managing real time risk, get

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Speaker 1: one thousand dollars. Ad vanter dot com, slash fear and greed.

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Speaker 1: I'm Sean Elmer. Enjoy your day,