Live Wire Transcript

https://www.livewiremarkets.com/wires/buy-hold-sell-5-stunning-comeback-stocks


James Marlay: Welcome to buy, hold, sell. Today we're talking about the comeback stories. Everyone loves an underdog. The stocks we're talking about today have had a period of underperformance but are starting to turn good. Here to talk about comeback stories. I've got Rob Miller from NAOS and Arden Jennings from Ausbil. Arden, let's kick it off with you and Enero Group. Buy, hold or sell?

Arden Jennings: Yeah, I think it's a buy, James. Management have done a great job turning around the business. We've got 60% of their earnings offshore now. They had been acquisitive and they've acquired quite well. They also have a PR business called Hotwire that is really servicing the U.S. tech firms primarily, but also other firms around the globe, and that's really exposed to a high growth segment of the market. It's trading on a reasonable valuation sort of 14 times, but offering 26% EPS growth. So from that perspective it's a buy.

James Marlay: 26% EPS growth sounds pretty attractive. Buy, hold or sell, Rob?

Rob Miller: Yeah, it does James. And I think it's a buy as well. It's one we hold in the portfolio. It's been a key turnaround over many years, but it's starting to really bear some fruit. I think the key thing at the FY '19 team result was the double-digit organic growth figure, which the market clearly liked. For us, Hotwire is the jewel in the crown. Plenty of growth there in terms of upside in the U.S. market. They are clearly under penetrated there and that is the biggest market for them to operate within. Net cash balance sheet, they've got the ability to acquire more businesses and it's a growing market and in terms of their multiple, they trade at a significant discount to global public and unlisted peers as well. So we think it's a buy.