Category Archives: Ask The Analyst

Ask The Analyst LIVE: What’s Stopping You?

What if you could ask your burning question about trading?

What if you could ask the most active and successful share trading teams in Australia, what you want to know?

  • Would you ask about a stock, should you buy, hold or sell?
  • Do you always seem to hold your losers and sell your winners, and want to know why?
  • Does it feel you backing a trade is a sure way for it go out of business?

We are putting a LIVE webinar on THIS FRIDAY 22nd November at 2 pm A.E.S.T (Sydney, Australia time)

Whatever your question, bring it to the webinar and the team will answer it for you!

Join us this Friday, 22nd November 2019, LIVE at 2 PM AEST.

We thought it would be interesting to talk about a few stocks today! Some to look at as we find them extremely exciting! Let’s dive right into it.

  • APT – Most of you know Afterpay by now seeing as they are in numerous stores across the country! Simply, they let you buy clothes for example, and you get to pay it in 4 instalments over 8 weeks! Huge growth since inception and it looks like they might reach profitability (FY17 had positive EBITDA) by FY18-end!Today’s announcement: Funding facility in NZ established to further scale the business, and Aus funding facility from NAB increased from $200M to $350M. Seems they are getting more traction.

  • KGN – The most popular online retailer in Australia now, and extremely competitive prices to go with it. Amazon might have a competitor in their hands!Today’s announcement: Update on outlook with exciting NBN plans, Kogan internet (expecting launch in 2H18), and Kogan Insurance looking good already since its launch in early August. The growth to October has been flagged as amazing and Kogan continues to impress.
  • MSM – Interesting little story revolving around talent competitions, all on an app! It’s been gaining traction among social media with users participating for the chance to win a $1M dollars! For us, the business still needs to advance a little more, but it’s definitely an exciting story!Today’s announcement: In trading halt due to a capital raise. Stay tuned.
  • VXR – Largely exciting due to the fact that they are one of the few in the Pilbara Gold Rush, and they have conglomerate style gold mineralisation, similar to that in South Africa where things turned out better than imagined.Today’s announcement: Raised $4M in fully underwritten placement to instos at 1.8c a share. Money is going to advancing the Sulphur Springs Copper-Zinc Project, Exploration at Whim Creek, and working capital. Cashed up and ready to go, how great!
  • WGL – Aiming to be the new service for parents to help their kids grow up in a safer environment. Their Family Insites software helps parents identify irregular behaviours in kids’ use of their phones or internet, and allows a deeper connection to occur through communicating about the issues that are brought up via the app.Today’s announcement: Since launching their Family Insites software on the 27th of October 2017 (iOS), they have now launched on the Android platform and is available to download on the Google Play store. Desktop version expected in December and child tracking GPS feature set to be released by end-Nov. Will be good to see how this translates to revenues from upcoming results.

Starting off with a chart of this Company – Big Un (BIG), we can see that the stock went from a low of 9c to a whopping $3.91 high in just over a year. Congratulations to anyone that had the guts to pick it up at those prices and managed to hold it to today!! (might even give you a job)

In any case, we’ve wondered how the Company had such a move. Upon looking, we saw that they had this astounding run on the back of an incredible uplift and growth in revenues, almost too good to be true.

The business model seems simply enough. They own Big Review TV (website:, which attracts small businesses (or big) by offering a marketing service. Simple business model and we see merit in the idea (image below).

As a small business wanting to get their name to the market, a video not only better shows what the business is all about, but being on Big Review TV’s website and app allows a new community to discover them. With a growing trend of people moving to video, it’s quite a simple and sound business model.

However, the question now is whether the revenues can be justified. For FY17, the Company posted revenues of $13.97M  and a net loss of -$4.24M (from FY16 $2.64M and -$7.80M respectively). The 1Q18 quarterly showed cash receipts of $15M (up 488% on pcp), no doubt extremely impressive considering members/subscribers have also increased to 128,700 members (up 544% from prior year), of which 4,900 are paying members (up 114%).

One issue we have with this Company is that we cannot reconcile the revenue numbers. The traffic details provided by BIG doesn’t seem to correspond to traffic numbers provided by services which track website traffic numbers. Having a look into the BIG website statistics, the video viewer numbers are low and we have sent questions regarding that to company and haven’t got any response so far.

Furthermore, we question whether BIG can really scale and expand the number of viewers (ie. people to use the website/app to discover companies). Essentially they are aiming to become the Youtube for Companies, and we wonder what kind of viewers would spend time on the website/app discovering companies.

We haven’t recommended to stock as such yet, but we’d love to be proved wrong. Spanning across Australia, New Zealand, the UK, U.S, Hong Kong, Singapore, and Canada, BIG definitely has caught many eyes in terms of the share price momentum. We’d love to see a sustained development in their business before making a final decision, but it’s quite the stellar price action on the ASX.


The ASX Energy Index (below) has been off the charts lately having began its bull run from early-2016. In particular the main Energy Stocks in our market are listed below and all of them have been moving beautifully since this run (or slightly later). In any case, you have to question what triggered this move!

  • Caltex (CTX)
  • Origin Energy (ORG)
  • Oil Search (OSH)
  • Santos (STO)
  • WorleyParsons (WOR)
  • Woodside Petroleum (WPL)
  • AWE (AWE)
  • Beach Energy (BPT)
  • New Hope Corporation (NHC)
  • Senex Energy (SXY)
  • Whitehaven Coal (WHC)

Most of these moves are heavily driven by the U.S. Crude oil prices, and I’ve inserted a chart below for you to have a look. Clearly from the lows of early-2016, we’ve been seeing this recovery, and although the price has struggled to stay above $50.00 around early-2017, we’re finally back up above it, and dare I say, close to breaking 2-Year Highs!

To go back, Oil had a dire performance after concerns about China’s economy that demand for the commodity would fall drastically as they start moving from an infrastructure focused economy to a service economy. Add to that concerns of the effect of the first hike in U.S. interest rates since 2009, and the issues with Greece/the EU.

Luckily the situation regarding Oil has been better since with OPEC talking production cuts and Trump’s economy looking surprisingly bullish for the U.S. markets. Although the uncertainty of how the OPEC supply restrictions would happen created a lot of choppy trading between $45-50 (mainly as conflicting data points were being released), stronger news from this year with Kuwait and Oman saying they would fulfil production cuts boosted prices.

Oil has been a really slow mover when we talk about momentum in percentage terms, and it isn’t blatantly obvious yet whether Oil will continue its recovery, but we know one thing for sure: it’s bullish on the charts.

While we might experience a few swings down, overall the picture is pointing north, and in times like these, individual stocks as mentioned above will get a boost. I would keep a close eye on some of these stories as any strong movement in oil will translate to a correlated move, and I urge you to stay alert for news regarding Oil.

Happy trading and have a fantastic weekend!


The remaining 6 Companies’ writeup is below! The TechKnow show definitely brought to us more ideas to look at and we hope we can keep attending these events.
14. Wangle Technologies (WGL)
Two products: 1st is the VPN and 2nd is the Family Insites.
Family insites is a similar concept to FZO in the sense that they are trying to solve the same problem. Fundamental difference is that Wangle’s approach is not the “put up walls” unlike FZO, but they use metadata to detect trends in order to detect, then alert the families so that they can talk about it. Upon talking to the CEO, he was saying it’s really impossible to avoid harmful content ie. friends can show the child, people can go off wi-fi (FZO) and use Telstra’s data for example, to look up stuff. By alerting the parents, you take a realer approach to these things and helps the child develop properly (educational programs included with Wangle’s product).
During FY17 they signed with Student Edge (access to potentially 900K users, that would be paying ~$2/mth or below for the app) vs regular price is $4.99/mth (family product is $9.99/mth)
Foundations laid down, R&D will be constant, Growth phase begins (ie. marketing post-launch of wangle family insites). Best to see how their sales pan out over the next 2 quarters to March at least to gage demand for this product.
FY17 Numbers
Revenue $840K ($740k from R&D rebate, $60k from interest)
NPAT -$5.1M
Cash $923K + $1.2M from tax rebate (18th October 2017)
Debt free
Net Assets $3M
Shares 773M
MCAP @ $0.019 ~$15M
Weekly Chart
15. Brainchip (BRN)
Machine learning. Developer of software and hardware to create AI. They sell “Brainchip” products which are little chips that can simulate neuron functions.
Complex industry to understand and hard to gage whether they are doing well. Perhaps a few more quarters to see how they go in terms of sales and if solid, consider investing. Chart indicates a lot of bullish sentiment, so potentially something to keep a close eye on
FY17 Numbers
Revenue $369K ($11.6K from interest, $224K from random areas due to RTO pre-owned assets)
NPAT -$5.8M
Cash $4.5M
Debt $339K
Net Assets $6.8M
Shares 849M + ridiculous amount of options and performance rights
MCAP @ $0.245 ~$221M
Weekly Chart

16. LiveHire (LVH)
They make money by getting companies to create talent communities. Users join the talent communities if they are interested in working for that company, and users can join more than 1 talent community to stay alerted on any job openings.
Business model makes money off the size of the talent communities so as long as they keep adding talents, which they are, they will generate a nice recurring revenue. Very solid business model considering the exponential effect and users being able to join more than 1 talent community.
1Q18 Highlights
Record cash receipts up 35% QoQ to $444K
senior appointments made to boost sales
no outlook but at their presentation they talked about simply adding more talent communities to leverage growth. Also talked about entry into U.S. market (no competition there at present)
Expensive at current price, but the trend is your friend. Potential trade but can have a huge drop at any point in time
FY17 Numbers
Revenue $1.3M
NPAT -$4.7M
Cash $16.2M (3Q)
Debt free (3Q)
Net Assets $20M
Shares 260M fully diluted
MCAP @ $1.00 ~$260M
Weekly Chart
17. Change Financial (CCA)
Wholly owned subsidiary called ChimpChange is an all-online banking service for millennials that have been seeing huge new-client figures since launch. Adoption rate is huge but we question whether they can manage their cashflows (FY17 saw 8M spending in just operations, mainly due to a larger headcount as they have been growing).
At such extreme levels of growth, it’s market cap is somewhat justified. However the risks are huge. If they start slowing down drastically, you could see a shock in price. Obviously very speculative at this stage with huge losses, but a lot of postiive sentiment behind it that makes it a potentially fun trading stock.
They are also entering crypto space (announcement) so that’s interesting.
FY17 Numbers
Revenue US$602K
Cash US$9.5M
Debt free
Net Assets US$10.4M
Shares 71.8M
MCAP @ $0.80 ~$57.5M
Weekly Chart

18. Volpara Health Technologies (VHT)


Digital health SaaS whereby they detect early signs of breast cancer by improving the screening process. Not the type of business we have a lot of insight into, but we can definitely say we like that they’ve transitioned from a contractual style business to providing SaaS and enjoying more recurring revenues that in FY16. Top line growth has been great so not a bad punt and seeing how their operations only burn through NZ$1.8M per quarter, they are cashed up for FY18.
This needs to be on the watchlist.
FY17 Numbers
Revenue NZ$1.8M (2Q18 says Annual recurring revenue of NZ$2.14M, 71% of revenue; )
Cash NZ$9.3M (2Q18)
Debt free
Net Assets NZ$14.2M
Shares 142.6M
MCAP @ $0.66 ~$94M
Weekly Chart
19. Updater (UPD)
Moving service whereby when you move house, Updater helps you update your addresses, utilities, accounts, mail etc. they have announced two new verticals, insurance and full service moving, and have raised A$55M recently to implement it.
Also acquired 2 companies: IGC Software and Asset Controls Inc (together, MoveHQ) expected to be integrated with the core business by end of 1Q2018 (March)
Pumping money into growth and market seems to like the story a lot. Pulling back to support but this could be a seriously good trade if one sets up via bounce near $1.00 levels.
1H17 Numbers
Revenue $505K
Gross Margin $477K
NPAT -$5.7M
Cash US$69.3M vs 3Q17 of -$3.1M
Debt free
Net Assets $29.6M
Shares 649.9M CDIs
MCAP @ $1.165 ~$757M
Weekly Chart
Our analyst attended the TechKnow show yesterday in Sydney and has provided his opinions on the first 13 of the 19 ASX-Listed Companies that presented. The remaining 6 will be available very soon so tune in!
1. Mobecom (MBM)
Company that has 5 services with flagship product being the “airBux” – loyalty program/app that signs on Companies that can offer users coupons, discounts, advertising. Users can use airBux to purchase products (transaction revenues)
Recent capital raising at $0.20 for $5.11M for a re-list on the ASX
Could potentially be adopted in the future as an exciting play, but currently too early and would like to see adoption rate / growth in future reports. Yes, the idea seems to be taken up by Companies, but I can’t figure out how much they would be making and would like to see written-down numbers instead of speculating
FY17 Numbers
Revenue $1.64M
Gross profit $1.25M
NPAT -$3.2M
Cash $33K
Debt $1.11M
Net Assets -$3.76M
Shares 162.24M
MCAP @ $0.35 ~$57M
Daily Chart
2. Inabox (IAB)
Only provider in Australia with an end to end (IT, Cloud, Telco) turnkey solution for large corporates to become a telco. Essentially offers large corporates a whitelabel telco product to offer to their own customers. They also provide general telco/cloud services to Companies.
Solid business that’s growing and had a weak FY17 due to large investment in their platform, development of their cloud-based products, and 2 acquisitions – Hostworks and Logic Communications.
High barriers to entry and they have the infrastructure in place now for growth in FY18. Only concern is the high debt which all profits will likely be used to pay down the balance over time. Good to know the operations are cash flow positive FY17 was +$4.2M. Funnily enough they managed to pay a dividend in FY17 of 1.7c after a strong FY16
FY17 Numbers
Revenue $90.11M
NPAT $86K (FY16 NPAT was $859K, FY17 Underlying EBITDA was $6.1M vs FY16 EBITDA of $5.5M)
EPS $0.004
Cash $5M
Debt $14M of $24M facilities used
Net Assets $14.7M
Shares 23.7M
MCAP @ $0.95 ~$20M
Weekly Chart
3. Gooroo Ventures (GOO)
AI-based algorithm that can analyse potential employees before recruitment. Saves on costs associated with recruitment.
Given negative NPAT, the big questions is, are revenues growing strongly enough, and what sort of clients have they signed to date. Having only had just started pushing their service to the market (U.S. from Jan 2017, sales leader appointed May 2017), they’ve been signing heaps of new clients, notably KPMG, Kinetic IT, Randstad. Whole bunch more and an alliance with Microsoft (learning partner of microsoft to offer targeted learning and career development opportunities to Gooroo’s growing community of tech professionals)
Still early and worth a punt if speculating revenue will grow exponentially, but another report to confirm numbers would be ideal as we want to see the growth momentum.
FY17 Numbers
Revenue $68K
NPAT -$2.7M
Cash $1.8M
Debt free
Net Assets $3.5M
Shares 61.5M
MCAP @ $0.13 ~$8M
Weekly Chart
4. Dreamscape Networks (DN8)
RTO’ed in December 2016, acquiring Pandora Enterprise Holdings – Ultimate parent of Dreamscape
Owner of CrazyDomains (#1 market share @ 30%) and in FY17, acquired a Singaporean equivalent – Net Logistics Pty Ltd who own Vodian, #3 in market share
Acquisitions of Pandora ($16.1M) pushed their NPAT to negative, but businesses are cashflow positive (+$12.1M). The underlying business showed these figures
Not the fastest growing business, but at +$1M cashflow / month, they are looking to grow inorganically in SEA mainly given high growth and fastest growing internet markets are in SEA. Received an acquisition funding facility from “a major aussie bank” for $20M (3yrs cash advance). Strong position to drive inorganic growth. I would say this is watchlist material, and we’d need to see further growth numbers.
FY17 Numbers
Revenue $46.4M
NPAT -$13.8M
Cash $17.7M
Debt free
Net Assets -$6.9M
Shares 344M
MCAP @ $0.24 ~$83M
Weekly Chart
5. MSM Corporation International (MSM)
We know the story, but other extra points to note were:
– expecting to raise money again at some point to boost growth
– foundations are all set (ie. capex) and just need to pump operations
– still not sure exactly how they will be making money, but from my perspective there are 2 they can aim to achieve for FY18: after growing their audience more, they can generate advertising revenue / freemium business model + selling the data from the behavioural aspects of the audience.
– Dion made a comparison of MSM to (a gaming version of MSM, but more like youtube than america’s got talent in the sense that there is no winning), which was sold for ~$800M but is valued now at $2.5B
– Impressive numbers of audience attraction to date (but that might be early-stage hype and not sustainable figures to base assumptions from)
Overall still risky, but it is definitely exciting to sit on the sidelines and watch
Weekly Chart
6. Sky & Space Global (SAS)
So we all remember this story, shooting nano-satellites into space to allow connectivity in the equatorial regions of the world.
So far, they’ve sent 3 satellites and are aiming for 200 over the next 4 years.
Too early and need to see real numbers before deciding. But another crazy exciting story that could potentially be a multi-bagger if successfully carried out.
FY17 Numbers
Revenue $54.4M (from interest)
NPAT -$14.9M
Cash $10M
Debt free
Net Assets $14.9M
Shares 344M
MCAP @ $0.24 ~$83M
Weekly Chart
7. Titomic (TTT)
Weird business but sounds somewhat interesting – in the 3D Printing space. Their technology differs in the sense that traditional 3d printing requires a block of material which the lasers cut away, ie. subtractive process. Titomic’s tech uses a spraying machine that sprays eg. titanium, at such force that it creates the object – additive. Saves a heap on costs apparently, their metal powder is a tenth of the market average, and build speed is 10x faster than market.
U.S. and Chinese patens have been granted and they have a heap of clients in the pipeline that operate in these industries: sporting goods, aerospace and martime.
Based on their peer analysis in page 16 of their presentation, their machine can make the biggest objects, meters-cubed-wise.
Too early at this stage to justify their market cap considering they don’t have any actual signed contracts to date. They will get some revenue from prototypes but still watchlist material to see if they will have momentum.
FY17 Numbers
Revenue $6.8K (from interest)
NPAT -$1.4M
Cash $357K
Debt free
Net Assets $921K
Shares 63.8M
MCAP @ $0.59 ~$38M
Daily Chart
8. Resapp Health (RAP)
We know this story, and essentially they’ve come to the market saying that they’ve fixed up the execution and clinical issues for upcoming clinical studies in the next few months (they are funded for it so that’s good). Will be interesting to see if things pan out the way it did prior to the share price fall (~90% accuracy in diagnosis).
$50M Market cap currently so might be a cheap pickup for the speculator
9. Family Zone (FZO)
Business model based on them selling technology that restricts harmful sites to kids. So far they’ve been aiming schools by offering to give it to them for free (schools can then also restrict kids from accessing certain sites), on the condition the schools promote it to the families in the school, and according to feedback, there has been a great take-up.
Strong adoption rates and the products were officially offered in July 2016. Lots of partnerships which are good. Revenues of $1.6M represent an awesome takeup-rate, having only had revenues of $5.5K in FY16 (development stage). Another quarter result to really gage momentum would be great. Need to better understand where all the money is being spent.
FY17 Numbers
Revenue $1.6M
Gross profit $620k
NPAT -$8.8M
Cash $1.4M plus $5.2M raising
Debt free
Net Assets -$2.6M
Shares 60.1M
MCAP @ $0.84 ~$51M
Weekly Chart
10. Nuheara (NUH)
We know the story and nothing really different about it except they may be bringing out a new product in the next few months. Christmas quarter will be a strong indicator of whether they can leverage the 5,000 stores they currently are in to bring them revenue.
Next quarterly is the make or break.
Personally tested the product as well, and that was quite interesting. Product does exactly what we’ve all heard about and is amazing in dampening external noise and being able to focus on what you want to hear.
Revenue $2.5M
NPAT -$4.8M
Shares 260M fully diluted
MCAP @ $0.058 ~$15M
11. Robo 3D (RBO)
They do 3D printers as well but much smaller things. Products are already developed and being sold at numerous retailers/online stores such as Amazon, Foxconn, Bestbuy…
Operationally making money, but came out at a loss in FY17 mostly because of the listing (RTO). Not sure what to think here considering they are getting sales, but the loss was so large. Keep an eye on it.
FY17 Numbers
Revenue $1.9M
Gross $400K
NPAT -$9.4M (3M from listing, but still quite high)
Cash $1.1M
Debt $250K
Net Assets $8.8M
Shares 259M and raised another 800K
MCAP @ $0.053 ~$14M
Weekly Chart
12. Mobilicom (MOB)
Offers a product that allows communication between things like ships and aircraft. Necessary and a strong market, eg. oil operations in the ocean – traditional methods require setting up infrastructure, and calls via satellite phone – very expensive.
Their product has been awarded government contracts already, and in the tender for one of the contracts (can’t remember exact but the CEO said this to me), was won over 17 other competing firms offering similar tech.
They are now also targeting the commercial sector as the growth there is much larger (margins also great), and are signing contract after another.
Post 3Q announcement
– Potential sales of $1.4M via design with with Japanese manufacturer of UAV, eLAB
Q3 Highlights
1H17 Numbers
Revenue $814K
Gross $550K
Cash $9.9M
Debt free
Net Assets $9.4M
Shares 217M
MCAP @ $0.165 ~$35M
Weekly Chart
13. Scout Security (SCT)
DIY IOT-connected home security devices which run on batteries
Can mix and match to home needs
Need to see how they can translate top-line figures to profits. So far, it’s hard to read their statements having just IPO’ed.
Promising considering US$1.9M revenues from FY16 alone.
FY17 Numbers
Revenue (FY16 had US$1.9M revenue)
Cash $5.1M
Debt free
Shares 259M and raised another 800K
MCAP @ $0.155 ~$40M
Daily Chart

Kogan.Com (KGN) has been a phenomenal performer and such an interesting story on our market. Since we’ve had it on as a story we’ve seen the price up almost 200%!

Yesterday’s announcement regarding their quarterly performance for the period ending 30th September 2017 was equally fantastic which highlighted a revenue growth of 35.9% – roughly in line with what the Company provided in their FY17 results.

Alongside, active customers grew significantly and passed the 1M subscriber mark with gross margins going up. With Christmas on the way KGN is “well poised to continue its trajectory” with an increase of $12.8M in inventories as they anticipate huge sales. With their verticals firing on all cylinders, it should translate to a very god 2nd quarter and no doubt the market expects a strong report.

The Company however has flagged that it decided to increase marketing spending which will hit bottom line in the short term but provide benefits in the long term. Cash of $25.8M and a $10M bank facility which is undrawn so far; they are in a fantastic position to handle the upcoming quarter.

Aside from that however, the business itself seems to be doing really great, and it’s no wonder the market has piled into this story sub $2.

Kogan Mobile hit their 2 year anniversary with promotional offers having performed supremely, and recent introduction of another vertical, Kogan Insurance, has had a very “promising start after launching in August”.

We really have to give it to Ruslan Kogan who founded the Company in 2006 and succeeded in turning what was once a two-product garage business, to the largest online department store in Australia. We personally find that with Mr Kogan, he understands the market he operates in extremely well and ensures the services that Kogan.Com offers are as rock solid as possible. Take Kogan Mobile which had gone through a rough patch due to complaints regarding mobile data overcharges, after which with revamping and reconsidering, launched a much stronger mobile service that better catered to the market.

We love the Company and the operator running the gears, and believe (with fingers crossed) that Kogan can continue to deliver year on year. Currently up 155% since their IPO at $1.80, Kogan.Com has definitely been a stellar play on the ASX and we are simply running with our profits.

Currently, KGN is sitting around $4.00, and you’re probably asking whether this is a buy. It’s hard to say at this stage as, technically, there hasn’t been a strong signal. KGN has about 100M shares outstanding so on a market cap of ~$400M you can judge whether a 35.9% in revenue growth for the quarter (1Q17 vs 1Q16) is reasonable.


Today, MGC Pharmaceuticals (MXC) signed a binding deal today to sell cannabidiol cosmetic products to a South Korean manufacturer.
The deal specified a minimum purchase quantity and the Company stated their expectations of revenue at $40M/yr or $3M+ a month.
The stock is currently sitting around 7c a share, around $85M market cap at these levels. The question is whether the deal will actually reflect in their numbers when they do report.
The Company and the market have been pumping this deal a bit, stressing the fact that they will be “Australia’s highest paid cannabis supplier”. The stock jumped 84% and to us, it’s hard to say whether at current prices, this is a buy hold or sell.
For us, it’s always high risk until we see solid figures from the Company that can reflect a sustainable business model. As such, although the stock could definitely continue its upwards momentum next week, we’d rather sit on the sidelines until we have a bit more confidence.
Cannabidiol has definitely been gaining some traction the past few months and there has been a larger adoption from customers across the globe. Whether MXC’s cannabidiol products will receive similar adoption in the South Korean market is a test only time will tell.