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Speaker 1: Welcome to Fear and Greed. Sum Are investing series are

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Speaker 1: brought to you by vant specialist in compliance lead browth.

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Speaker 1: I'm Sean Almer. This series is all about giving investors

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Speaker 1: some ideas, the starting point for your research, a few

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Speaker 1: things to consider when you're investing in twenty twenty five.

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Speaker 1: So continuing with that theme today, we're looking at three

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Speaker 1: companies you may not have heard of. As always, this

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Speaker 1: is general information only. You should always seek independent advice

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Speaker 1: before making investment decisions. Matthew Kidman is the principal at

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Speaker 1: Centennial Asset Management. Matthew, welcome back to Fear and Greed.

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Speaker 2: Hi Sean, thanks for having me.

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Speaker 1: You've been prepped on this one. Three stocks that we

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Speaker 1: haven't heard about. Stock number one is.

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Speaker 3: It's a company called drop Suite codds in the technology space.

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Speaker 3: So one of the big problems with technology is security,

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Speaker 3: as we know, and there's a lot of products that

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Speaker 3: you can buy to help secure what you've got at

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Speaker 3: work or at home. Drop Suite primarily concentrates on Office

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Speaker 3: three sixty five. As we know, we've gone to the

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Speaker 3: cloud with Microsoft and it allows you to back up

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Speaker 3: your Microsoft three six five. Now that doesn't sound exciting.

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Speaker 3: Doesn't Microsoft do that. Microsoft doesn't really do it in

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Speaker 3: any meaningful way, but drop Sweet does and it has

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Speaker 3: been growing, and especially with the SME type market, it's

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Speaker 3: been able to grow the size of its customers and

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Speaker 3: it's also been able to grow the amount of their customers.

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Speaker 2: It's run at break even. It's kepped about four hundred

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Speaker 2: million or maybe a bit less three hundred and fifty

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Speaker 2: million dollars worth, got a decent balance sheet, and it

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Speaker 2: runs at about break even as it grows that twenty

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Speaker 2: to thirty percent pace. We kind of like that. We've

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Speaker 2: watched it for a long time. It's executed well. Not

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Speaker 2: cheap structural growth, but we do think it's got a

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Speaker 2: lot of growth to go for the next two or

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Speaker 2: three years.

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Speaker 1: Okay, Number one's drop Suite Number two.

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Speaker 3: Well, you've probably heard of this, but it's probably been

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Speaker 3: off the radar. Which fits into the category I think,

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Speaker 3: which is a dares nice old retailer has got an

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Speaker 3: online business called Mockup, but primarily the old storefront selling

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Speaker 3: your furniture and home goods. Adares has been a real problem.

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Speaker 3: Child had a boom. Like most retailers in COVID, it

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Speaker 3: exceeded all profitability, especially around the margin front. As we know,

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Speaker 3: we stayed at home and spent money on our house.

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Speaker 3: Then it all dropped off the edge of the cliff.

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Speaker 2: And guess what.

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Speaker 3: At the same time Instraits went up, A dars balance

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Speaker 3: sheet was two gears, so it got hit from a

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Speaker 3: couple of different angles. Stock price went down about seventy percent.

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Speaker 3: And the other issue they had was that they at

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Speaker 3: the same time was doing all that. They were building

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Speaker 3: a new distribution center, which when they moved in there

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Speaker 3: it just didn't work. They had to get rid of

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Speaker 3: the third party process, go in take it for themselves.

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Speaker 3: Now it's operating as we see the last couple of updates.

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Speaker 3: It's actually sales. They've started to grow, and if we

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Speaker 3: get a couple of instraight cuts, it'll pick up on

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Speaker 3: that cyclical element we'd like. As we get deeper into

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Speaker 3: twenty twenty five, balance sheet's getting a bit better. Debts down,

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Speaker 3: distribution center working okay, back on its feet, balance sheet repair.

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Speaker 2: We think there's a bit of upside in a DAEs job.

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Speaker 1: Suite one A dares to number three.

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Speaker 3: I'm going to go with one that's spent an absolute

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Speaker 3: banger over the last year or so, and it's in

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Speaker 3: a really high growth part of the market. So it's

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Speaker 3: risky in the sense that it's gone up a lot.

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Speaker 3: It was incredibly cheap, and it's one called SKS Technologies.

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Speaker 3: SKS basically is a commercial electrician, and what I mean

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Speaker 3: by that it wires big buildings my university's hospitals might

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Speaker 3: to a commercial building in the city, even though that's

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Speaker 3: a bit more competitive. And the more recent one that.

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Speaker 2: It does sector is data centers.

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Speaker 3: As we know, that's the moon product, and a lot

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Speaker 3: of the equipment that goes into a data center it's

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Speaker 3: shed with a lot of electric because we know and

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Speaker 3: there's a lot of power to run those service that

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Speaker 3: sit in there and allow you to access the cloud

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Speaker 3: or premise work. It's done really well. The stock has

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Speaker 3: gone up about five or six times in the last

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Speaker 3: twelve months. And you say, well, I've missed the boat.

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Speaker 3: I don't think so. I think it's getting into bigger

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Speaker 3: projects and I think that it can grow at an

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Speaker 3: above average rate over the next two years if it

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Speaker 3: continues to execute well. There's always risk around that, but

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Speaker 3: we think they're executing really nicely and that they're increasing

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Speaker 3: their margins at the moment because the demand for this product.

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Speaker 3: Electricians are in big demand and if you can get

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Speaker 3: access to them, you can charge higher rates. So margins improving,

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Speaker 3: revenue improving, and it's not about thirteen or fourteen times,

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Speaker 3: but we think that can probably grow at twenty five

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Speaker 3: thirty percent over the next couple of years.

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Speaker 2: So there's plenty of upside in.

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Speaker 1: That balance sheet. Matthew, you always talk balance sheets. You

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Speaker 1: haven't mentioned s cases.

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Speaker 2: Balance sheet improved a lot, improved a lot did have

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Speaker 2: a lone of credit. There was a lot of talk

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Speaker 2: around in the market I needed to raise money because

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Speaker 2: the amount of work they were taking on their last

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Speaker 2: update was a really good one where they said that actually,

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Speaker 2: when net cash now a line of credit, we don't

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Speaker 2: need new equity. A line of credit is still there,

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Speaker 2: we're not tapping into it because we've collected our money

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Speaker 2: at such a good speed when net cash at the moment. So, yes,

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Speaker 2: sean good question. I'm glad I had an answer.

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Speaker 1: Fantastic. So we have drop Suite A, Dares, SKS, all

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Speaker 1: very different parts of the market, all improved, good or

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Speaker 1: improving balance sheets. There's a theme there, Matthew. Thank you

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Speaker 1: for joining us today.

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Speaker 2: Thanks Sean.

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Speaker 1: Now was Matthew Kidman from Centennial Asset Management. Remember to

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Speaker 1: get your own independent advice before making decisions. This is

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Speaker 1: fair and greed. Some are investing series brought to you

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Speaker 1: dot com, slash fear and greed. I'm shanelma Enjoy your day.