1
00:00:05,600 --> 00:00:08,280
Speaker 1: Welcome to Fear and Greed, Summer investing series brought to

2
00:00:08,360 --> 00:00:12,160
Speaker 1: you by Vanta, specialists in compliance led growth. I'm Sean Elmer.

3
00:00:12,560 --> 00:00:15,319
Speaker 1: With so much attention on the global tech giants, how

4
00:00:15,360 --> 00:00:18,520
Speaker 1: should investors view our local tech sector. It's home to

5
00:00:18,600 --> 00:00:22,279
Speaker 1: some very solid performers like Wise Tech Global, Zero, Next DC,

6
00:00:22,840 --> 00:00:24,600
Speaker 1: as well as plenty you may not have heard of.

7
00:00:24,880 --> 00:00:27,360
Speaker 1: As always, this is general information only and you should

8
00:00:27,360 --> 00:00:31,200
Speaker 1: seek independent advice before making investment decisions. Sean Miike is

9
00:00:31,240 --> 00:00:34,960
Speaker 1: a senior investment analyst at Wilson Asset Management. Sean, Welcome

10
00:00:35,000 --> 00:00:35,720
Speaker 1: to Fear and Greed.

11
00:00:36,080 --> 00:00:37,320
Speaker 2: Thanks Sean, great to be here.

12
00:00:37,840 --> 00:00:40,360
Speaker 1: Well, the tech space I reckon, I mean teching healthcare

13
00:00:40,360 --> 00:00:42,360
Speaker 1: of the two areas which I think are the most

14
00:00:42,360 --> 00:00:44,440
Speaker 1: fascinating because you go down rabbit holes and you can

15
00:00:44,440 --> 00:00:46,920
Speaker 1: make a MOTSA or lose a motza or within about

16
00:00:47,000 --> 00:00:50,519
Speaker 1: a week. Let's talk about the big guys in the

17
00:00:50,960 --> 00:00:53,400
Speaker 1: Lennon sort of the zero as, the areas the Wise

18
00:00:53,479 --> 00:00:56,480
Speaker 1: Tech Global, they've done, you know, very well in the

19
00:00:56,560 --> 00:00:59,400
Speaker 1: last twelve months. What's the outlook for the bigger guys?

20
00:01:00,040 --> 00:01:02,920
Speaker 2: I mean, as you mentioned, the performance of the technology

21
00:01:02,960 --> 00:01:06,360
Speaker 2: sector has been phenomenal. In twenty twenty four, the index

22
00:01:06,400 --> 00:01:08,760
Speaker 2: is up fifty eight percent year to date versus the

23
00:01:08,800 --> 00:01:11,600
Speaker 2: all lords up seventeen percent. So yeah, the outperformance has

24
00:01:11,640 --> 00:01:14,080
Speaker 2: been dramatic, you know, now view it's been a function

25
00:01:14,160 --> 00:01:17,279
Speaker 2: obviously of a declining interest rate environment in the US

26
00:01:17,319 --> 00:01:20,800
Speaker 2: and globally, but also we think, you know, a lack

27
00:01:20,840 --> 00:01:24,559
Speaker 2: of earnings growth domestically, you know, with elevated interest rates

28
00:01:24,560 --> 00:01:28,440
Speaker 2: and sticky inflation weighing on demand here. So yeah, we

29
00:01:28,440 --> 00:01:31,000
Speaker 2: think the outlook into FY twenty five is a bit tricky,

30
00:01:31,000 --> 00:01:33,400
Speaker 2: and we have seen a decline in the sector over

31
00:01:34,000 --> 00:01:37,399
Speaker 2: you know, the past recent period. You know, since the

32
00:01:37,440 --> 00:01:40,320
Speaker 2: FED began cutting rates earlier this year, the US ten

33
00:01:40,400 --> 00:01:43,640
Speaker 2: year yield has actually risen eighty basis points and it's

34
00:01:43,640 --> 00:01:46,319
Speaker 2: now sitting around four point four percent, which you know,

35
00:01:46,360 --> 00:01:49,560
Speaker 2: a piece to reflect the bond market's concerns over inflation

36
00:01:49,720 --> 00:01:52,520
Speaker 2: reaccelerating juda. You know, I guess what would be termed

37
00:01:52,520 --> 00:01:56,400
Speaker 2: a Fed policy era. I suppose also the potential impact

38
00:01:56,440 --> 00:01:59,880
Speaker 2: of tariffs you know, from the Trump government. So you know,

39
00:02:00,120 --> 00:02:03,080
Speaker 2: rising yields are clearly ahead wind valuations, but you know,

40
00:02:03,120 --> 00:02:06,200
Speaker 2: the US curve is still pricing in three cuts into

41
00:02:06,240 --> 00:02:09,320
Speaker 2: twenty twenty five. So I think the other factor to

42
00:02:09,400 --> 00:02:12,760
Speaker 2: consider for the tech sector into twenty twenty five is really,

43
00:02:13,120 --> 00:02:15,480
Speaker 2: you know, China and your views around you know, the

44
00:02:15,520 --> 00:02:18,240
Speaker 2: stimulus that they may put in the market. And if

45
00:02:18,280 --> 00:02:21,560
Speaker 2: we do see an improvement in commodity prices, you're likely

46
00:02:21,600 --> 00:02:24,080
Speaker 2: to see fundment and just rotate out of these you know,

47
00:02:24,160 --> 00:02:30,280
Speaker 2: high flying, high valuation technology stocks into beaten up cyclicals

48
00:02:30,320 --> 00:02:33,240
Speaker 2: and commodities. So there's a few things to consider, we

49
00:02:33,320 --> 00:02:34,160
Speaker 2: think at the moment.

50
00:02:34,960 --> 00:02:37,520
Speaker 1: Okay, so, are there any particular stocks that you like

51
00:02:37,639 --> 00:02:40,519
Speaker 1: in that tech sector? Mean, in your list which ones

52
00:02:40,560 --> 00:02:41,200
Speaker 1: you like most?

53
00:02:41,520 --> 00:02:44,360
Speaker 2: Yeah? So, I mean, so, I guess our base case

54
00:02:44,440 --> 00:02:48,280
Speaker 2: is that as rates stabilized, investors will refocus on earnings growth,

55
00:02:48,320 --> 00:02:51,320
Speaker 2: and we think the tech sector will continue to lead

56
00:02:51,360 --> 00:02:54,560
Speaker 2: the charge from that perspective. So the stocks we like

57
00:02:54,639 --> 00:02:58,240
Speaker 2: within the technology space, so Life three sixty, you know,

58
00:02:58,280 --> 00:03:01,600
Speaker 2: the core subscription business is continue to grow very strongly,

59
00:03:01,680 --> 00:03:04,720
Speaker 2: and twenty twenty five does represent what we believe is

60
00:03:04,720 --> 00:03:07,120
Speaker 2: in the inflection point for the business. With their nascent

61
00:03:07,360 --> 00:03:12,840
Speaker 2: advertising business. We think Iris looks cheap and his Catalyst

62
00:03:12,919 --> 00:03:16,440
Speaker 2: Rich management have come out recently and reconfirmed that they're

63
00:03:16,440 --> 00:03:18,799
Speaker 2: going to deliver the top end of their calendar of

64
00:03:18,880 --> 00:03:21,440
Speaker 2: twenty four guidance, and you know, we think into twenty

65
00:03:21,440 --> 00:03:25,400
Speaker 2: twenty five you're likely to see continued significant cost out

66
00:03:25,480 --> 00:03:29,320
Speaker 2: asset sales and refocus on how they can reinvigorate the

67
00:03:29,360 --> 00:03:32,480
Speaker 2: top line. And the final one, i'd say is the

68
00:03:32,600 --> 00:03:36,480
Speaker 2: much publicized Digiico IPO, which has attracted a lot of

69
00:03:36,480 --> 00:03:39,600
Speaker 2: press recently. I mean that's fallen fourteen percent since listing

70
00:03:39,640 --> 00:03:42,720
Speaker 2: and now trades on less than half a valuation of

71
00:03:42,760 --> 00:03:46,360
Speaker 2: it's listed per next DC. We think AI will remain

72
00:03:46,400 --> 00:03:49,280
Speaker 2: a strong tail window to twenty twenty five, which underpins

73
00:03:49,360 --> 00:03:52,520
Speaker 2: data center demand, and you know you're likely to see

74
00:03:52,560 --> 00:03:55,760
Speaker 2: that falling rate environment benefit valuations as well. So we

75
00:03:55,800 --> 00:03:58,160
Speaker 2: actually think that one looks good buying here.

76
00:03:58,480 --> 00:04:00,560
Speaker 1: Well, I mean those three that you mentioned, it's interesting.

77
00:04:00,560 --> 00:04:04,520
Speaker 1: They're all from very different spheres of the economy, and

78
00:04:04,720 --> 00:04:08,720
Speaker 1: so tech stocks are an interesting bunch because they are technology,

79
00:04:09,040 --> 00:04:11,880
Speaker 1: but they're totally you know, they're all over the shop

80
00:04:11,880 --> 00:04:13,960
Speaker 1: in terms of what they're actually doing. Who there's I mean,

81
00:04:14,000 --> 00:04:16,520
Speaker 1: Life three sixty is a long way from RS.

82
00:04:16,920 --> 00:04:18,600
Speaker 2: Yeah, no, that's dead right. And then I mean you

83
00:04:18,600 --> 00:04:21,320
Speaker 2: look at you know, their larger cap piers. You know,

84
00:04:21,400 --> 00:04:25,040
Speaker 2: you've got obviously the classified plays ARIA, car sales seek

85
00:04:26,080 --> 00:04:27,920
Speaker 2: you know, and then within that, you know obviously they've

86
00:04:27,960 --> 00:04:31,159
Speaker 2: got different underlying exposures. You know, we like ARIA. We

87
00:04:31,240 --> 00:04:34,360
Speaker 2: think you know, the domestic property market will benefit from

88
00:04:34,360 --> 00:04:37,800
Speaker 2: interest rate cuts at some point. Car sales, you know,

89
00:04:37,880 --> 00:04:40,800
Speaker 2: I think the US business they've done an amazing job

90
00:04:40,839 --> 00:04:43,080
Speaker 2: there and there's a you know, the playbook from Australia

91
00:04:43,120 --> 00:04:45,200
Speaker 2: at Mirrors, you know, five to six years ago. So

92
00:04:45,200 --> 00:04:47,240
Speaker 2: we still think has a lot of upsiding car sales

93
00:04:47,279 --> 00:04:48,440
Speaker 2: in the US as example.

94
00:04:48,520 --> 00:04:51,320
Speaker 1: To fantastic Sean, thank you for joining me this morning.

95
00:04:51,640 --> 00:04:52,720
Speaker 2: Thanks Sean, appreciate it.

96
00:04:52,839 --> 00:04:56,200
Speaker 1: That was Sean White, Senior investment analyst at Wilson Asset Management.

97
00:04:56,240 --> 00:04:59,160
Speaker 1: Remember to get your own independent advice before making decisions.

98
00:04:59,480 --> 00:05:01,919
Speaker 1: This is and Greed Summer Investing Series, brought to you

99
00:05:02,000 --> 00:05:06,240
Speaker 1: by Vantera. Vanta automates compliance for frameworks like ISO twenty

100
00:05:06,279 --> 00:05:09,960
Speaker 1: seven one, SoC two, CPS two three four in essentially

101
00:05:09,960 --> 00:05:12,760
Speaker 1: elate saving time and money while building trust. Join over

102
00:05:12,800 --> 00:05:15,680
Speaker 1: eight thousand companies like at Lassian, Dovetail and fire Ant,

103
00:05:15,720 --> 00:05:18,240
Speaker 1: managing real time risk in one thousand dollars off at

104
00:05:18,320 --> 00:05:21,920
Speaker 1: vanta dot com slash fear and greed. I'm Sean Elmer.

105
00:05:22,240 --> 00:05:24,040
Speaker 1: Enjoy your day.