1 00:00:05,820 --> 00:00:08,100 Sean Aylmer: Welcome to the Fear and Greed Business interview. I'm Sean Aylmer. 2 00:00:08,670 --> 00:00:11,010 Sean Aylmer: 2024 was supposed to be the year of the small 3 00:00:11,010 --> 00:00:14,190 Sean Aylmer: cap after a few fairly ordinary years, but as we 4 00:00:14,190 --> 00:00:17,519 Sean Aylmer: approach the halfway point of this year, it's not looking 5 00:00:17,520 --> 00:00:20,340 Sean Aylmer: that much better. So what's happened to the small cap 6 00:00:20,340 --> 00:00:23,220 Sean Aylmer: revival and is there cause for optimism as we head 7 00:00:23,220 --> 00:00:25,738 Sean Aylmer: into the second half of the year? Remember, this is 8 00:00:25,739 --> 00:00:28,530 Sean Aylmer: general information only and you should always seek professional advice 9 00:00:28,530 --> 00:00:32,310 Sean Aylmer: before making investment decisions. Oscar Oberg works across a number 10 00:00:32,490 --> 00:00:35,459 Sean Aylmer: of the licks at Wilson Asset Management. He's the lead 11 00:00:35,459 --> 00:00:41,339 Sean Aylmer: portfolio manager at WAM Capital, WAM Microcap, WAM Research and WAM Active. 12 00:00:41,640 --> 00:00:44,250 Sean Aylmer: Oscar, busy man. Welcome back to Fear and Greed. 13 00:00:44,729 --> 00:00:45,960 Oscar Oberg: Thanks, Sean. Thanks for having me. 14 00:00:46,559 --> 00:00:50,788 Sean Aylmer: Broadly speaking, what's happened to the small caps this last 15 00:00:50,790 --> 00:00:54,930 Sean Aylmer: half year, given we started 2024 with so much promise? 16 00:00:55,410 --> 00:00:57,090 Oscar Oberg: Yeah, we did, and I think I was probably one 17 00:00:57,090 --> 00:01:03,150 Oscar Oberg: of the... I think I've been saying it for the last two years, almost feels like forever that 18 00:01:03,150 --> 00:01:05,009 Oscar Oberg: it's going to be the year of small caps. And 19 00:01:05,010 --> 00:01:09,179 Oscar Oberg: yeah, well, I must admit, my confidence levels around January, 20 00:01:09,179 --> 00:01:13,170 Oscar Oberg: February were very, very high, given the feeling around interest 21 00:01:13,170 --> 00:01:18,209 Oscar Oberg: rates following obviously the Federal Reserve's announcers back in December 22 00:01:18,300 --> 00:01:20,160 Oscar Oberg: and what we were seeing on the ground when we 23 00:01:20,160 --> 00:01:24,630 Oscar Oberg: were seeing companies. And I'd say what's happened since then 24 00:01:24,990 --> 00:01:27,779 Oscar Oberg: has been, yeah, small caps have underperformed and we work 25 00:01:27,780 --> 00:01:31,440 Oscar Oberg: in financial years at Wilson Asset Management, but it's three 26 00:01:31,470 --> 00:01:34,080 Oscar Oberg: financial years in a row, so it has been quite 27 00:01:34,470 --> 00:01:37,470 Oscar Oberg: savage and I think it was heading the right direction 28 00:01:38,130 --> 00:01:40,440 Oscar Oberg: really towards the end of March. And then I think 29 00:01:40,679 --> 00:01:44,249 Oscar Oberg: everyone, we've all been surprised at how sticky the consumer 30 00:01:44,250 --> 00:01:49,830 Oscar Oberg: price index announcements have been. And clearly inflation is here 31 00:01:49,830 --> 00:01:52,560 Oscar Oberg: and whether it's here to stay or not is another 32 00:01:52,560 --> 00:01:56,040 Oscar Oberg: story. But certainly the rate cut expectations that were in 33 00:01:56,040 --> 00:02:00,000 Oscar Oberg: the market have been revised up and ultimately that's probably 34 00:02:00,000 --> 00:02:02,670 Oscar Oberg: not good for small caps. So we do need... In 35 00:02:02,670 --> 00:02:06,000 Oscar Oberg: our view, we need to seek more confidence that rate 36 00:02:06,000 --> 00:02:09,510 Oscar Oberg: expectations will come down, which we still believe that will. 37 00:02:09,900 --> 00:02:11,639 Oscar Oberg: It's just probably not to the same extent that we 38 00:02:11,639 --> 00:02:12,960 Oscar Oberg: all thought six months ago. 39 00:02:13,470 --> 00:02:16,169 Sean Aylmer: So is it mostly a macro story rather than sector 40 00:02:16,169 --> 00:02:18,000 Sean Aylmer: specific or stock specific? 41 00:02:18,750 --> 00:02:23,459 Oscar Oberg: It is, and it's not. I mean, to summarize, if 42 00:02:23,459 --> 00:02:25,800 Oscar Oberg: you look at the small cap sector, and we were 43 00:02:25,800 --> 00:02:28,650 Oscar Oberg: looking at this the other day, small caps have lost 44 00:02:28,650 --> 00:02:31,320 Oscar Oberg: a lot of good companies over the years that have 45 00:02:31,350 --> 00:02:34,440 Oscar Oberg: gone to large cap sector. Some of those companies are 46 00:02:34,469 --> 00:02:41,069 Oscar Oberg: Pro Medicus, WiseTech, Steadfast, Seven Group, etc. And they've kept going 47 00:02:41,070 --> 00:02:43,770 Oscar Oberg: up. When they get into the large cap market, because 48 00:02:43,770 --> 00:02:47,100 Oscar Oberg: they're going, well, conversely, we've had a lot of... When 49 00:02:47,100 --> 00:02:48,900 Oscar Oberg: a small cap goes to a large cap, you get 50 00:02:48,900 --> 00:02:50,819 Oscar Oberg: the large caps that are now small caps coming back 51 00:02:50,820 --> 00:02:54,750 Oscar Oberg: down. And a lot of them have been companies exposed to 52 00:02:54,750 --> 00:02:56,880 Oscar Oberg: the consumer and that has been a really weak part 53 00:02:56,880 --> 00:02:59,608 Oscar Oberg: of the market over the last, call it three years. 54 00:02:59,609 --> 00:03:02,970 Oscar Oberg: And now I'm talking about companies in the retail sector, 55 00:03:03,120 --> 00:03:06,750 Oscar Oberg: automotive sector in the media sector. They're good companies in 56 00:03:06,750 --> 00:03:08,550 Oscar Oberg: their own right, but they've had a difficult patch. So 57 00:03:09,179 --> 00:03:11,550 Oscar Oberg: while we've been giving up companies like Pro Medicus, we've 58 00:03:11,550 --> 00:03:14,280 Oscar Oberg: been getting companies like ARB and Harvey Norman, right? And 59 00:03:14,280 --> 00:03:17,849 Oscar Oberg: so it's just a totally different mindset and style a 60 00:03:17,850 --> 00:03:21,180 Oscar Oberg: company. So you've got that dynamic and as you look 61 00:03:21,180 --> 00:03:23,910 Oscar Oberg: at it, within the small cap sectors, around 30% of 62 00:03:23,910 --> 00:03:26,639 Oscar Oberg: the small caps are related to the consumer in some 63 00:03:26,639 --> 00:03:30,419 Oscar Oberg: way, whether it's billing materials, whether it's REITs, whether it's 64 00:03:30,450 --> 00:03:34,139 Oscar Oberg: media companies, retail, et cetera. So effectively what you do 65 00:03:34,139 --> 00:03:36,330 Oscar Oberg: need is you need interest rates to fall because all 66 00:03:37,020 --> 00:03:39,450 Oscar Oberg: those sectors should do well in that environment. And we 67 00:03:39,450 --> 00:03:42,150 Oscar Oberg: actually did see that from around December to March, as 68 00:03:42,150 --> 00:03:46,020 Oscar Oberg: I said before. The other dynamic at play, so you've 69 00:03:46,020 --> 00:03:49,799 Oscar Oberg: got effectively small caps, which is largely weighted these days 70 00:03:49,799 --> 00:03:53,399 Oscar Oberg: towards consumer stocks. So you need them to do well. 71 00:03:53,699 --> 00:03:55,800 Oscar Oberg: But on the other hand, there's still a lot of 72 00:03:55,800 --> 00:03:59,790 Oscar Oberg: money coming into equities and the flows that we see 73 00:04:00,120 --> 00:04:03,990 Oscar Oberg: are just incredibly strong and they are globally. And the dynamic 74 00:04:03,990 --> 00:04:06,659 Oscar Oberg: that we've seen in the United States is that the 75 00:04:06,660 --> 00:04:10,350 Oscar Oberg: Magnificent Seven, although the large technology companies I think have been 76 00:04:10,350 --> 00:04:14,670 Oscar Oberg: responsible for 50% of the upside in terms of performance 77 00:04:14,670 --> 00:04:17,400 Oscar Oberg: over the last financial year in the United States, and the same 78 00:04:17,400 --> 00:04:20,039 Oscar Oberg: dynamics here. So as a lot of your listeners will 79 00:04:20,040 --> 00:04:23,250 Oscar Oberg: know that the Big four banks have performed extremely strongly 80 00:04:23,730 --> 00:04:26,759 Oscar Oberg: over the last few years. The Iron all majors have 81 00:04:26,759 --> 00:04:30,089 Oscar Oberg: been incredibly strong when you consider how many dividends they've 82 00:04:30,089 --> 00:04:32,849 Oscar Oberg: been paying over this period as well. And what we 83 00:04:32,850 --> 00:04:34,560 Oscar Oberg: tend to have seen is a lot of the large cap 84 00:04:34,560 --> 00:04:37,560 Oscar Oberg: companies, they just continually get the flow of money because 85 00:04:37,560 --> 00:04:41,159 Oscar Oberg: there's perceived risk towards small caps. There's two dynamics at 86 00:04:41,160 --> 00:04:44,460 Oscar Oberg: play here and which could be very beneficial for small 87 00:04:44,460 --> 00:04:46,740 Oscar Oberg: cap companies when it does occur. And that's where we 88 00:04:46,740 --> 00:04:50,070 Oscar Oberg: see interest rates fall, demand will return to consumer, but 89 00:04:50,070 --> 00:04:53,010 Oscar Oberg: then the money that's been going into companies such as 90 00:04:53,010 --> 00:04:55,710 Oscar Oberg: Commonwealth Bank as an example, might come back into small 91 00:04:55,710 --> 00:04:58,260 Oscar Oberg: caps so you get the double benefit. So that's what 92 00:04:58,260 --> 00:05:00,178 Oscar Oberg: we're waiting for. We saw a glimpse of it this 93 00:05:00,178 --> 00:05:03,870 Oscar Oberg: financial year, but we think we need to see actual interest rates come 94 00:05:03,870 --> 00:05:07,710 Oscar Oberg: down for that real confidence to occur and for a good 95 00:05:07,710 --> 00:05:09,000 Oscar Oberg: period for small caps to happen. 96 00:05:09,690 --> 00:05:12,390 Sean Aylmer: So let's use Commonwealth Bank as an example. It's extremely 97 00:05:12,390 --> 00:05:15,960 Sean Aylmer: expensive on a historical perspective, it's more expensive than the 98 00:05:15,960 --> 00:05:19,499 Sean Aylmer: Aussie banks. It's more expensive than most global banks. At 99 00:05:19,500 --> 00:05:24,389 Sean Aylmer: some point... Well, so that's arguably overvalued. It keeps going 100 00:05:24,389 --> 00:05:26,700 Sean Aylmer: up. So maybe not. Market is always right, I suppose. 101 00:05:27,180 --> 00:05:29,310 Sean Aylmer: The flip side though, does this mean that there are 102 00:05:29,310 --> 00:05:33,868 Sean Aylmer: some of these small caps which are relatively undervalued? 103 00:05:34,320 --> 00:05:37,080 Oscar Oberg: Well, that's our view. I mean, there's absolutely... When I 104 00:05:37,290 --> 00:05:40,199 Oscar Oberg: talk about Commonwealth Bank being expensive, it should be expensive. 105 00:05:40,199 --> 00:05:45,150 Oscar Oberg: It's a great company, they're doing everything right. It keeps 106 00:05:45,150 --> 00:05:48,599 Oscar Oberg: beating expectations. But when it comes down to it, it is 107 00:05:48,600 --> 00:05:52,169 Oscar Oberg: a bank and it's trading at a price-to- earnings multiple, 108 00:05:52,170 --> 00:05:55,710 Oscar Oberg: I think of over 20 times earnings. Well, I think 109 00:05:55,710 --> 00:05:58,710 Oscar Oberg: most people would think if the economy's weak, then therefore 110 00:05:58,770 --> 00:06:02,190 Oscar Oberg: a bank should be weak. But it's really powered through 111 00:06:02,190 --> 00:06:06,479 Oscar Oberg: this period. Conversely, I could buy a retailer today at 10 times 112 00:06:06,480 --> 00:06:09,510 Oscar Oberg: earnings, which is half the valuation and probably has a 113 00:06:09,510 --> 00:06:12,990 Oscar Oberg: very good balance sheet. So we just think that tide 114 00:06:12,990 --> 00:06:15,659 Oscar Oberg: will turn at some point, money comes out of a 115 00:06:15,660 --> 00:06:18,299 Oscar Oberg: Commonwealth Bank, it doesn't have to go down. It might 116 00:06:18,299 --> 00:06:22,080 Oscar Oberg: just stagnate for a period of time. And that money comes back 117 00:06:22,080 --> 00:06:25,860 Oscar Oberg: to that 10 times valuation retailer that something goes back 118 00:06:25,860 --> 00:06:27,809 Oscar Oberg: to 14 times because that's what it used to trade 119 00:06:27,809 --> 00:06:30,750 Oscar Oberg: on over the last 20 years and you make 30 or 40% 120 00:06:30,750 --> 00:06:34,618 Oscar Oberg: upside on it just from effectively a reversion back to 121 00:06:34,619 --> 00:06:37,438 Oscar Oberg: the mean. So there will see a number of companies like that 122 00:06:37,440 --> 00:06:40,710 Oscar Oberg: at the moment. And we're not short of ideas at 123 00:06:40,710 --> 00:06:45,270 Oscar Oberg: the moment across micro caps, mid- caps, small caps. It's 124 00:06:45,270 --> 00:06:47,340 Oscar Oberg: just the timing of those ideas is what's key. 125 00:06:48,089 --> 00:06:49,799 Sean Aylmer: Stay with me, Oscar, we'll be back in a minute. 126 00:06:57,659 --> 00:07:03,990 Sean Aylmer: My guest today is Oscar Oberg from Wilson Asset Management. So let's push 127 00:07:03,990 --> 00:07:06,630 Sean Aylmer: into some of those ideas. I suppose firstly, is it 128 00:07:06,630 --> 00:07:09,149 Sean Aylmer: a stock pickers market? So you need to be pretty 129 00:07:09,150 --> 00:07:12,360 Sean Aylmer: active in what you are looking for or is it 130 00:07:12,360 --> 00:07:15,210 Sean Aylmer: more sectoral? And then I'm going to ask you Oscar 131 00:07:15,210 --> 00:07:18,239 Sean Aylmer: for some ideas for listeners, but firstly, is it a 132 00:07:18,240 --> 00:07:19,170 Sean Aylmer: stock pickers market? 133 00:07:19,890 --> 00:07:23,460 Oscar Oberg: Yeah, it definitely is. I mean, I would say from 134 00:07:23,460 --> 00:07:27,000 Oscar Oberg: our perspective, it hasn't been favorable in terms of large 135 00:07:27,000 --> 00:07:29,789 Oscar Oberg: caps have been favored over small caps, invest in large 136 00:07:29,789 --> 00:07:32,910 Oscar Oberg: caps, but we've actually outperformed this year. So there's been 137 00:07:32,910 --> 00:07:35,970 Oscar Oberg: some great stock picking across our team. If I had 138 00:07:35,970 --> 00:07:39,929 Oscar Oberg: to pick the theme that's been consistent really over through 139 00:07:39,929 --> 00:07:42,330 Oscar Oberg: the year, I would say it'd be artificial intelligence and 140 00:07:42,330 --> 00:07:45,989 Oscar Oberg: how that feeds into technology companies. So companies such as 141 00:07:45,990 --> 00:07:49,830 Oscar Oberg: Megaport, NextDC, Life360, done incredibly well for us. And that's been 142 00:07:49,830 --> 00:07:52,830 Oscar Oberg: quite consistent over the last 12 months. I think that 143 00:07:53,160 --> 00:07:54,810 Oscar Oberg: it's a sector we don't really play in, but the 144 00:07:54,810 --> 00:07:57,990 Oscar Oberg: biotech sector has been very strong. So the two companies 145 00:07:57,990 --> 00:08:01,619 Oscar Oberg: there would be Neuron and Telix Pharmaceuticals. And the theme 146 00:08:01,620 --> 00:08:04,260 Oscar Oberg: that we really played on, which we did really well 147 00:08:04,260 --> 00:08:07,290 Oscar Oberg: out of and thankfully we reduced our exposure there was 148 00:08:07,290 --> 00:08:09,840 Oscar Oberg: what I was saying before was there was a period probably 149 00:08:09,840 --> 00:08:14,460 Oscar Oberg: from around October to March where retailers did extremely well 150 00:08:14,460 --> 00:08:18,059 Oscar Oberg: because expectations were very low. And the economy probably wasn't 151 00:08:18,059 --> 00:08:22,020 Oscar Oberg: as bad as what people thought. And of course that's 152 00:08:22,020 --> 00:08:25,350 Oscar Oberg: what really drove the small cap sector. But then since 153 00:08:25,350 --> 00:08:28,770 Oscar Oberg: around March, April, the interest rate expectations a bit higher 154 00:08:29,160 --> 00:08:32,070 Oscar Oberg: and a little bit tougher conditions that's fallen by the 155 00:08:32,070 --> 00:08:35,759 Oscar Oberg: wayside. So despite all that, so big summary I would 156 00:08:35,759 --> 00:08:38,820 Oscar Oberg: say, yeah, tech and biotech, definitely the consistent themes. I 157 00:08:38,820 --> 00:08:40,828 Oscar Oberg: think retail had its own theme for a period of 158 00:08:40,830 --> 00:08:47,520 Oscar Oberg: time. But yeah, at the same point, despite unfavorable market 159 00:08:47,520 --> 00:08:49,830 Oscar Oberg: dynamics, you could call it an uncertainty, you can still 160 00:08:49,830 --> 00:08:53,010 Oscar Oberg: 100%... You can find great ideas and outperform in this 161 00:08:53,010 --> 00:08:54,689 Oscar Oberg: market. You've just got to work hard at it. 162 00:08:55,170 --> 00:08:59,100 Sean Aylmer: So Oscar, What are some of those ideas out there? 163 00:08:59,100 --> 00:09:02,160 Sean Aylmer: Given the macroeconomic environment, it will turn at some point, 164 00:09:02,160 --> 00:09:05,250 Sean Aylmer: but given that uncertainty, what sort of stocks do you like? 165 00:09:05,730 --> 00:09:09,030 Oscar Oberg: Yeah. Look, I mean on the theme of what we're 166 00:09:09,030 --> 00:09:12,900 Oscar Oberg: talking about today, just in terms of stocks that probably 167 00:09:12,960 --> 00:09:15,870 Oscar Oberg: potentially have been forgotten about that are probably related to 168 00:09:15,870 --> 00:09:17,002 Oscar Oberg: the economy. I mean, I'll start off with (inaudible) 169 00:09:17,670 --> 00:09:20,100 Oscar Oberg: Education, which is G- E- M is the ticker, its 170 00:09:20,700 --> 00:09:24,120 Oscar Oberg: largest child care operator in Australia, has over 400 child 171 00:09:24,120 --> 00:09:26,760 Oscar Oberg: care centers. It's been a tough company for a number 172 00:09:26,760 --> 00:09:29,309 Oscar Oberg: of years. Our catalyst to buy shares was a couple 173 00:09:29,309 --> 00:09:31,410 Oscar Oberg: of years ago with the announcement, the new management team, 174 00:09:31,650 --> 00:09:34,259 Oscar Oberg: and they've done an incredible job. So it's a very 175 00:09:34,260 --> 00:09:38,189 Oscar Oberg: simple thesis. The company's recovering from COVID and getting its 176 00:09:38,190 --> 00:09:40,949 Oscar Oberg: occupancy back to what it was pre- COVID. At the same 177 00:09:40,950 --> 00:09:43,920 Oscar Oberg: time they're getting rid of some of the underperforming child 178 00:09:43,920 --> 00:09:48,629 Oscar Oberg: care centers and been very stringent on costs. And we've 179 00:09:48,630 --> 00:09:52,409 Oscar Oberg: actually gone above 5% of this company, a substantial shareholder. 180 00:09:52,740 --> 00:09:54,958 Oscar Oberg: And that's largely due to our views that we think 181 00:09:54,960 --> 00:09:57,240 Oscar Oberg: the government's going to be very supportive of child care 182 00:09:57,600 --> 00:10:00,330 Oscar Oberg: and fund some of the cost increases that we're seeing around labor. 183 00:10:00,570 --> 00:10:02,550 Oscar Oberg: So we think this business and the sector can actually 184 00:10:02,550 --> 00:10:06,719 Oscar Oberg: achieve positive operating leverage over the next few years. And 185 00:10:06,719 --> 00:10:08,009 Oscar Oberg: at the same time, (inaudible) has a very good 186 00:10:08,009 --> 00:10:10,350 Oscar Oberg: balance sheet. So we see the potential for capital management 187 00:10:10,350 --> 00:10:12,900 Oscar Oberg: as well. So that's a company that's trading on 11 times 188 00:10:12,900 --> 00:10:17,550 Oscar Oberg: earnings, could easily trade at 15 to 16 times earnings once the 189 00:10:17,550 --> 00:10:22,140 Oscar Oberg: market gets confidence on the strategy and the consumer environment. 190 00:10:22,679 --> 00:10:26,130 Oscar Oberg: Another company that we like at the moment, Service Stream, 191 00:10:26,790 --> 00:10:31,260 Oscar Oberg: the code's SSM. Again, we're a substantial shareholder there. Company 192 00:10:31,260 --> 00:10:34,290 Oscar Oberg: that used to be a market darling before COVID and 193 00:10:34,290 --> 00:10:37,890 Oscar Oberg: was really benefiting from the NBN had to fundamentally change their 194 00:10:37,890 --> 00:10:40,170 Oscar Oberg: business as a lot of the NBN work came off and 195 00:10:40,260 --> 00:10:44,069 Oscar Oberg: the construction work and has done so. And around 80% 196 00:10:44,070 --> 00:10:47,549 Oscar Oberg: of their business now is pure maintenance. They're investing quite 197 00:10:47,549 --> 00:10:50,670 Oscar Oberg: heavily into get into the defense sector. They've had one 198 00:10:50,670 --> 00:10:55,140 Oscar Oberg: underperforming contract that's now completed in their utilities' division that's 199 00:10:55,140 --> 00:10:57,179 Oscar Oberg: been dragging down their margins. But the next two years 200 00:10:57,179 --> 00:11:00,210 Oscar Oberg: we think margins can increase and actually go from around 3% 201 00:11:00,809 --> 00:11:03,630 Oscar Oberg: to 5%. And again, it's trading on a price earnings 202 00:11:03,630 --> 00:11:06,360 Oscar Oberg: multiple 13 times. I think we've got growth next year 203 00:11:06,389 --> 00:11:09,929 Oscar Oberg: close to 20%. Its net cash has more cash than 204 00:11:09,929 --> 00:11:13,108 Oscar Oberg: its debt. We think there's ability to make acquisitions good 205 00:11:13,110 --> 00:11:16,409 Oscar Oberg: management team. So we really like that one. But I 206 00:11:16,410 --> 00:11:18,449 Oscar Oberg: think just generally, I think if I was sitting here 207 00:11:18,450 --> 00:11:20,399 Oscar Oberg: this time last year, I would've said the retail sector 208 00:11:20,400 --> 00:11:23,789 Oscar Oberg: looks really interesting because we thought expectations were just too 209 00:11:23,789 --> 00:11:27,390 Oscar Oberg: low in terms of the analysts following the sector. As 210 00:11:27,390 --> 00:11:30,210 Oscar Oberg: I said, it had a really good period from November 211 00:11:30,210 --> 00:11:34,468 Oscar Oberg: to March. It's been hammered since that point. But again, 212 00:11:34,469 --> 00:11:36,809 Oscar Oberg: we're looking at company having a look at these companies 213 00:11:36,809 --> 00:11:38,909 Oscar Oberg: again, because a lot of the retailers in the space 214 00:11:38,910 --> 00:11:41,218 Oscar Oberg: have another story and that's what you generally want to 215 00:11:41,219 --> 00:11:44,940 Oscar Oberg: look at for retail. You don't want just to be looking 216 00:11:44,940 --> 00:11:47,340 Oscar Oberg: at the same store sales growth or the store count 217 00:11:47,340 --> 00:11:49,950 Oscar Oberg: for the next period. It needs something else. And so 218 00:11:49,950 --> 00:11:53,520 Oscar Oberg: companies such as Premier Investments, that's doing a spinoff of 219 00:11:53,520 --> 00:11:57,270 Oscar Oberg: Smiggle and Peter Alexander looks really interesting. Very cheap net 220 00:11:57,330 --> 00:12:00,689 Oscar Oberg: cash balance sheet, great board, great management. That's starting to 221 00:12:00,690 --> 00:12:04,020 Oscar Oberg: look interesting again. We think Harvey Norman looks interesting again. 222 00:12:04,020 --> 00:12:07,650 Oscar Oberg: It's come off from well over $5 and the low fours. 223 00:12:08,400 --> 00:12:11,759 Oscar Oberg: The property by itself, I think it's worth $ 33.40, so you're not 224 00:12:11,759 --> 00:12:14,999 Oscar Oberg: paying much for the retail business. Beacon Lighting's got its 225 00:12:15,000 --> 00:12:18,629 Oscar Oberg: own story with its rollout through the trade sector. So 226 00:12:18,780 --> 00:12:20,640 Oscar Oberg: we're looking at those sort of companies at the moment 227 00:12:20,640 --> 00:12:23,190 Oscar Oberg: because they have been really hit with odds just over 228 00:12:23,190 --> 00:12:25,740 Oscar Oberg: in the UK. I think travel looks interesting again. I think 229 00:12:25,920 --> 00:12:28,920 Oscar Oberg: travel's still going to remain quite buoyant. People are worried 230 00:12:28,920 --> 00:12:31,379 Oscar Oberg: in the market about ticket prices, but this could actually 231 00:12:31,380 --> 00:12:34,170 Oscar Oberg: be a positive for the travel agents because there's more 232 00:12:34,170 --> 00:12:38,100 Oscar Oberg: incentive for the airlines to pay commissions to the travel 233 00:12:38,100 --> 00:12:40,559 Oscar Oberg: agents and also the ticket price is lower. You might 234 00:12:40,559 --> 00:12:43,740 Oscar Oberg: actually see higher volume of tickets being sold. So Flight 235 00:12:43,740 --> 00:12:45,540 Oscar Oberg: Center we think looks really good there as they approach 236 00:12:45,540 --> 00:12:48,840 Oscar Oberg: their 2% margin target. We're looking at corporate travel at 237 00:12:48,840 --> 00:12:51,659 Oscar Oberg: the moment, we think that looks interesting too. So I 238 00:12:52,080 --> 00:12:56,910 Oscar Oberg: think in summary, you can't be invested heavily in the 239 00:12:56,910 --> 00:13:01,890 Oscar Oberg: sectors such as technology and biotech this coming 12 months 240 00:13:02,010 --> 00:13:04,650 Oscar Oberg: and expect to do well in the small cap sector. 241 00:13:04,650 --> 00:13:08,309 Oscar Oberg: You do need to take some more calculated risks, let's 242 00:13:08,309 --> 00:13:12,809 Oscar Oberg: say it on the consumer sector because that's the sector 243 00:13:12,809 --> 00:13:14,700 Oscar Oberg: that has the most value and that definitely has the 244 00:13:14,700 --> 00:13:15,480 Oscar Oberg: most upside. 245 00:13:15,929 --> 00:13:17,730 Sean Aylmer: Oscar, thank you for talking to Fear and Greed. 246 00:13:18,030 --> 00:13:19,050 Oscar Oberg: No worries. Thank you guys. 247 00:13:19,559 --> 00:13:23,040 Sean Aylmer: That was Oscar Oberg, lead portfolio manager of WAM Capital, 248 00:13:23,040 --> 00:13:26,700 Sean Aylmer: WAM Microcap, WAM Research and WAM Active. This is the 249 00:13:26,700 --> 00:13:29,488 Sean Aylmer: Fear and Greed business interview. Remember, this is general information 250 00:13:29,490 --> 00:13:32,458 Sean Aylmer: only and you should seek professional advice before making investment 251 00:13:32,460 --> 00:13:35,189 Sean Aylmer: decisions. Join us every morning for the full episode of 252 00:13:35,190 --> 00:13:37,710 Sean Aylmer: Fear and Greed Daily Business News for people who make 253 00:13:37,710 --> 00:13:40,500 Sean Aylmer: their own decisions. I'm Sean Aylmer. Enjoy your day.