Why Are Australia's Best Companies Being Sold Off?

In tonight’s Australian Stock Market Show, Filip, Janine and Pedro discuss why Australia's best companies are being sold off.

• 0:01Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice. Enjoy.

• 0:20Speaker 01

  What if some of Australia's best companies are being sold off, not because they're bad businesses, but because investors have lost confidence? Some established ASX names have fallen more than 40 or even 50%. So are these genuine bargains hiding in plain sight, or is the market warning us about something much bigger? With decades of combined market experience, nationally recognised and accredited stock market education and analysis featured across major Australian media, I'm Philip Lotefsky, joined tonight by senior analyst Janine Cox and Pedro Banyales and we are Wealth Within. Good evening.

• 0:52Speaker 02

  Good evening, I made it.

• 0:53Speaker 01

  You did make it a frantic afternoon, but very glad to have you. We have a big topic tonight.

• 0:59Speaker 02

  Yes, and really interesting stocks to look at too. We've also got something for everybody on cryptos.

• 1:06Speaker 01

  Yes, we sure do. Pedro, welcome in also mate. You're joining us from remote abroad, wherever the hell you are, you're always somewhere. How are you going?

• 1:15Speaker 03

  G'day guys. Look, you know, at least you made it in, Janine. Can't say the same for me. But look, I'm loving a good bargain. So yeah, let's get into it.

• 1:24Speaker 01

  Awesome. All right, guys. Now, when investors think about Australia's best companies, they generally look for strong profitability, manageable debt and businesses with a proven track record. But what happens when those same companies start experiencing significant share price declines? Now, according to Market Index Fundamentally Sound Companies List, where companies are screened using criteria including a return on equity of at least 10% and debt to equity below 70%, based on research that has been printing since 1995, shows quite a large amount of companies which have suffered extraordinary declines this year. Cochlear, ARB Corporation and Ades, for example, have all fallen more than 50% over the past year. Now, this raises an interesting question. Are investors selling quality businesses

• 2:09Speaker 01

  because of genuine concerns about future earnings, or have falling share prices created opportunities that most investors are overlooking? When a fundamentally strong company falls 40 or 50%, how do you actually determine whether this is a genuine buying opportunity or a value trap? Janine, this is one of the biggest questions that, you know, people looking for bargains have, or people that are trying to make sense of this. Because I could tell you when we're putting this topic together, I was speaking to some of our younger crew, if I can call them that, in production. And this instantly spoke to them. They said, I've always asked this question, why is a company with good fundamentals share price falling?

• 2:46Speaker 02

  Yeah, we see this all the time in reporting season particularly, when companies come out and they've got great announcements. And then all of a sudden, we see prices falling. We don't know why they're falling until they release what their future forecasts are. And as soon as the big funds get any whiff of anything that's different to what they expected, or if there's some sort of forecast variation, or if they're in a sector that the market thinks is likely to have further declines, even if they're a really good company. And this is where you can find really good opportunities amongst those stocks that have been sold down because it's been a sector driven thing where money is just coming out

• 3:29Speaker 02

  of that area. And this is why this is a perfect topic for that.

• 3:33Speaker 01

  Do you find sometimes, because it's such an important concept, not only on the fact that when it happens, but from your experience, when you do see this situation, have you found over the years that eventually a really solid company finds its way back? Or it can stay down for much, much longer than I guess logic says?

• 3:51Speaker 02

  Yeah, there have been companies that we've been scratching our heads, thinking, why is this still down when it should be going up? But then we, we just look at our analysis and then it tells us that. So for those students who have studied with us and done the diploma and were lucky enough to get the CFD Forex course, they will know why those companies have been falling and when they're likely to turn.

• 4:14Speaker 01

  Yeah, it's that golden combination. You speak to a fundamentalist, they, they don't have so much, you know, want to know the technicals. You speak to a pure technical person and they sometimes say, well, I don't really, you know, care too much for the fundamentals. And both arguments are fine. But what, for me, it's when you can combine them both. I mean, if something's really out of whack and doesn't make sense, and then you can use the technicals to confirm it and get that timing right. I think that's really, you know, the golden combination.

• 4:42Speaker 02

  Then you know that the funds at some point are going to march right back into those stocks again. And then the cash is going to flow back in and you'll be there at that opportune moment.

• 4:51Speaker 01

  Awesome. Well, hopefully, we're going to get into some of those opportune moments in a second. So stay tuned. But Pedro, I wanted to get you in on this conversation, mate. Is there anything additional you usually need to see when you, you know, see these companies that appear healthy, yet they are experiencing that heavy, heavy selling?

• 5:09Speaker 03

  Yeah, well, first of all, I want to see the share price find a base. And you're only going to do that by looking at a chart and seeing that confirmation of that reversal. And then of course, when the fundamentals reach the point where they're positive as well, then of course, you get that double confirmation. Like you mentioned, you want a little bit of a mix of both. It's important to, to note that these markets, they're speculative markets as such. So of course, what is valued at one price for one analyst is going to be valued at another price for another analyst. And of course, that's how you get the fluctuations in price. So what you want to see is the price confirming to be in the right direction

• 5:54Speaker 03

  first, before you say that, of course, that the stock has found that base. And there's many ways to do this. Obviously, we cover them in our courses. We can't cover them here on the show. It'd be just too much. But there are certain ways to confirm that the price has found a bottom, then that uptrend has begun. And then of course, then you see the fundamentals lag in that manner.

• 6:21Speaker 01

  All right. Well, let's now dive into our first lot of fundamentally sound companies from that list to see whether or not this turnaround story has begun. What have you got first, Janine?

• 6:31Speaker 02

  Yes, an interesting one. Lovisa Holdings, L O V. Lovisa's international expansion's creating long-term shareholder value. And the question is whether that's actually happening, or are investors becoming concerned about how much that growth costs? What's driving that sell off? Although international expansion is supporting overall revenue, existing store sales growth is comparatively weak. Expansion also brings costs and execution risks. Even after falling 35%, the shares trade at approximately 28 times financial six earnings using the market index screen price. That's not obviously cheap for a retailer. Now Lovisa also announced

• 7:15Speaker 02

  the departure of longtime CFO Chris Lauder, who's, that was on the 8th of October, adding some leadership uncertainty. So that all fuels that sell off and creates that opportunity, doesn't it? Because if they're, just because somebody's changed, or that someone at the helm has changed, doesn't mean that they're not going to, all of a sudden, someone else is going to come in and they're going to turn that around.

• 7:38Speaker 01

  Well, especially when it's a longstanding person, when they've been around for a long time, of, you know, when that happens, it's a big structural change, new ideas, maybe new direction. And it's the unknown. Markets hate the unknown. But on the flip side, sometimes that could be the best opportunity for a real turnaround.

• 7:55Speaker 02

  Sure. And particularly if, you know, that company is looking at changing some sort of direction or launching into a new area. But is now the right time for Lovisa to launch into a new area?

• 8:08Speaker 01

  Discretionary stock in an environment that, you know, high rate environment.

• 8:14Speaker 02

  But they're like, it's low cost items. So we're talking about things that, and this is one of the things that we saw during the GFC, is that people will still spend money on things that are low cost items. Women will still spend money on makeup. In fact, I think I remember seeing something that the makeup sales went up significantly during that time. We saw West Farmers make a strategic.

• 8:36Speaker 01

  Was that because they're looking for new husbands?

• 8:40Speaker 02

  You're worried.

• 8:40Speaker 01

  With a bit more cash.

• 8:41Speaker 02

  You're worried, aren't you? Yeah, so we saw Westfarmers buy Priceline.

• 8:47Speaker 01

  Yeah.

• 8:47Speaker 02

  Some time back and as a strategic move and getting into that sort of area, which I think is probably a good decision. But at the end of the day, La Vise is holding at a really important level. So for us, looking at the chart, that's going to have more weight than talking about, you know, whether the fundamentals are going to support the share price in a crunch. We saw a dramatic fall during COVID and that's really interesting because we can compare that to what other stocks or markets have done. And we can see there that was an 83% fall. So, you know, when, when there's fear and concern and it's really fast, the price will just get pummeled. But then it came right back some months later and went on to just do incredibly well.

• 9:31Speaker 02

  So that shows the resilience of a stock like this, which I think is fantastic. Do I think that there's a potential risk to the downside? Sure. It could be that in the short term though, we see, you know, a move to the upside because at the moment it's, it could go either way. And this is what this is saying really, that the buyers and sellers are in agreeance right now about the price. It's, we've actually seen a bit of a spike up here, which could be a bit of a precursor for a further run above $30. So this stock could head up to $30, $35. The downside risk, because you've got to be that good risk manager, is that if it goes the other way, you need to protect yourself regardless of whether you think it's a good company, could recover and has got solid earnings.

• 10:16Speaker 02

  You want to be in there during the times when it's actually stronger. We've seen this level broken, this April 2025 low get broken in March 2026. Now there's a risk, right, that it could come all the way back to this low here. That's a real possibility, that June 2020 low, if it actually breaks below this June 2026 low.

• 10:39Speaker 01

  Would you say based on the whole history there, how much it's fallen on that recent one, like is that enough potentially on, on the, because I know, you know, the way you're talking about obviously the positive example and then the further fall example, it's from the professional standard, absolutely looking at two scenarios and I totally agree with what you're saying. But just if someone's thinking, okay, because you're always asking the question, is it enough?

• 11:02Speaker 02

  Yeah, is it enough? I'd actually like to see, and it's not, you know, great for the share price, but I'd just like it to tease that point out, that March 26 low and just come back somewhere around here in October 2023. Once it does that, then I would be thinking, here we go, you know, we've got something. But it has hit a really good level, which is, you know, could hold it up, it could be strong, but we need to just see some direction and we don't have that right now.

• 11:30Speaker 01

  Yeah, awesome. Pedro, your thoughts and just that question, mate? Has this one potentially done enough to be that turnaround story early days? But what are you seeing?

• 11:40Speaker 03

  Well, as I remember, last time that the company reported, they reported quite well. And that's when we saw that spike in price. When you look at back here in August, that was the last reporting time, the, the price spiked up, but then eventually it was sold off. But now it does look like price has recovered. So it looks like it's recovered about half of that, that fall already. So was this sell off just, you know, profit taking? But because the underlying fundamentals are still intact, it's still a profitable business with, with a very good potential. So based on that, I would say that as long as it holds this momentum that it's establishing, then, you know, that's good news.

• 12:23Speaker 03

  And traditionally it does move in that manner. When you look at, you know, that, that previous rise, it, it does take a while for it to, to make its way up. It has these ebbs and flows. So as long as it holds that momentum, then we're fine. However, if we do break that momentum to the downside, then that's a different story. But I think all in all, it's still holding up quite well.

• 12:45Speaker 01

  Awesome. All right, mate, how about you take us into the next one, I believe, Hub 24?

• 12:50Speaker 03

  Yeah, Hub 24. So I was just looking at this before, this is a technician's playground, this one. I mean, very technical stock where when you look at it first off, and I was thinking, you know what, I've got to do a trading essentials reports for, for the students next week. And I might actually have this stock as the one that, that I apply the analysis to because there's a lot of things that I'm seeing here technically that look very, very interesting to me. And it's a great stock to learn from as well in terms of patterns. But let's get into why the company, you know, increased its underlying profits by 40%, but it still lost a third of its market value.

• 13:30Speaker 03

  So in FY26, results were exceptional, yet price lost one third. This looks primarily like a valuation reset rather than a business deterioration. Hub 24 previously attracted a considerable premium because of its growth, but investors may not be willing to pay high multiples for financial technology business. So the risk is that earnings can keep growing while the share price falls if the original valuation was excessive. Market volatility could also affect funds under administration and fee revenue. It's a lot like a tech stock and it is behaving a lot like a tech stock. And that is traditional, really, you know, comment along, among tech stocks that the

• 14:15Speaker 03

  future potential runs too far forward to potential profits. So let's increase the monthly chart here and have a look at what's going on. I'll hide out this text box. Yes, it, it has gone through a dramatic repricing here from the old time high of October 25. So that's in one year. It's lost 50% of the value, but have a look at what's happening here on, on the monthly. It's actually, looks like it's reversing. It's, it's, looks like it has found a base here at around that $60. And traditionally $60, $60 was a, a nice base for it back here in January 25. And it did kind of find some support.

• 14:56Speaker 03

  It did trade all the way down to $50, but the fact that it didn't close below it was, you know, pretty important here, I think, back in 2025. So this actually could be turning and I was alluding to, you know, the, the longer term patterns here in that, you know, the, the, the way that it's fallen, the, the percentage that it's fallen, and of course, many other technical factors is getting me interested in a potential rebound. But, you know, opening the, the weekly chart here, I think that, that stands out like, you know, I'm not going to say it stands out a lot, this pattern that's unfolded here on the weekly chart.

• 15:38Speaker 03

  And, and it's quite a bearish type of a pattern. I'm sure our students will be recognizing this. And that in itself is not very reassuring. It could actually mean that price has further to fall. And the fact that volume was increasing to the downside could very well support that move to the downside.

• 16:00Speaker 01

  Yes, and if you guys want to learn, there is a tool in this book that will literally help you looking back at Hub 24 and applying the tool that's in this book will really give you an indication whether it's time to buy this stock or not. It's really that simple. Check it out. It's how to beat the managed funds by 20%. It is free, you just have to pay the shipping. The link is in the description in this video below. But as always, if you do want to take things to the next level, go and get educated properly, visit our government accredited Diploma of Share Trading and Investment. The qualification speaks for the volume of information and education you will receive. I'll keep saying it, there is none other like it. And so you are receiving premium education in a field that has so much misinformation

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  and basically CRAP in terms of getting people educated on how to do this right. So go and check that out, check out our testimonials and see what is possible with people making some life changing returns with relation to their investments in their super. But let's now digress or move on. We've got one more stock before we get into the next section.

• 17:02Speaker 02

  We do. I was just thinking about what you said then, because I think the, the oldest person that I think I can recall working with was in their eighties.

• 17:10Speaker 01

  Yeah, right.

• 17:11Speaker 02

  And the youngest, I think, was in their early twenties or maybe around that 20 mark.

• 17:16Speaker 01

  Well, what was interesting, and I think, I mean, that was the age I, I started around then, but, and we've had quite a bit of that. What really shocked me was Dale was saying the other day, he went to, when he did an interview with Ticker that we do, you know, every couple of weeks on TV. And he said he met someone in the street as he was at the front of their offices and they stopped him and they said, oh, you know, are you that guy from, you know, wealth within? He said, yeah, yeah. And what he did mention, he said, I watch your show every week. I sit down with my 14 year old daughter and watch the, watch the show and she loves it. And I thought, damn, 14 years old, getting involved, you are setting your child up for, for some really good things.

• 17:57Speaker 02

  Yeah, I agree. Amazing. There should be more parents thinking that way.

• 18:01Speaker 01

  If I said that to my daughter, she'd grab the remote, smash it over my head, straight on the cartoons.

• 18:07Speaker 02

  Don't change the channel.

• 18:08Speaker 01

  No.

• 18:09Speaker 02

  Look out.

• 18:10Speaker 01

  Go watch it by yourself.

• 18:12Speaker 02

  All right, all right. Now let's have a look at this ARB. Has ARB been punished too heavily for a cyclical slowdown? Or is the market anticipating a much weaker future? ARB's financial year 26 reported net profit declined only 5.2% compared with a 55% share price decline. Now the risk, original equipment revenue fell more than 27%. That's significant and prolonged weakness in vehicle demand could undermine the recovery. So it's all about that forecast, isn't it?

• 18:44Speaker 01

  And these guys are in, if, if I'm not mistaken, the, the luxury style, you know, caramels and, and, and those times of four wheelers.

• 18:51Speaker 02

  And there's been a lot of competition in that area since COVID, hasn't there? Now, I mean, just looking at it, to me, this actually really smells like a huge opportunity. Just watching where that share price is sitting right now, because it's come back to, and it's funny, we're talking about COVID, but it's come back to around those COVID or pre-COVID levels.

• 19:11Speaker 01

  Yeah.

• 19:12Speaker 02

  And, you know, we're talking about a company that's sitting on cash, no debt. Yes, in a prime position. So well done. I mean, these sort of companies should weather the storm better than others.

• 19:23Speaker 01

  Yes.

• 19:24Speaker 02

  Because they've got that preparation, but maybe it can depend, because I was going past it. And as Aussie caravan manufacturer, it's I can't remember when it was, but just recently. And and I noticed how many caravans, no, I'm not. I noticed how many caravans were actually sitting in the yard. And I just, I felt like I wanted to go in there and say to him, don't build up your stock. And maybe I will at some point. Because, I mean, it's not like you're building, if you're building up stock in retail, who knows what the value of the stock would be on the floor. But building up stock as a manufacturer of things like a caravan, which is worth a hell of a lot more. You're sitting on all that money, but maybe they only make to order, I don't know.

• 20:09Speaker 02

  But I think that for stocks like this, they have to be prepared for it. The fact that we've already seen this massive sell down, you know, it's a concern. But at the same time, I think short term traders will have a bit of a field day on this one.

• 20:24Speaker 01

  Yeah, doesn't it just speak to the, you know, the volatility since COVID? Like, I know that pre-COVID, there was a lot of people looking at the market from the point of view of just, that buy and hold approach, we talk about it often. We've even had people talk about dollar cost averaging. But since COVID, it cannot be disputed that markets have been much more volatile.

• 20:47Speaker 01

  Being able to know this important skill of identifying price, getting your timing right. I know for me, it's made all the difference in terms of, you know, staying out of the wildness and getting involved in the right type of action as well. And you're even seeing it on stocks that are solid stocks, no debt, you know, fundamentally sound, as you would say. And generally, these are the stocks that fundamentally sound stocks that people buy for buy and hold. Because they go, well, it's a good company, I don't care, over time it'll be up. Yeah, until now, it's back to six years ago prices. So if you've ever thought about knowing to how important this stuff is, I don't think it's more important than than than ever than it is today in today's markets.

• 21:30Speaker 02

  I agree, and I was thinking about the people who may have bought up here in 2021, thinking this is a good company, more people are, you know, are buying this equipment. So therefore, it's going to be good going forward, having absolutely no idea about the timing of it and what was coming. And then even after that pullback, you know, people were buying in there and still buy and hold scenarios would be down significantly. I mean, if if you bought in back here after the fall in 2023, thinking that was the right time to buy, you're down another 45% in that time. When you could have been out up here, we just knew a few little rules. It would have been a different story and walking away with that.

• 22:12Speaker 01

  Just speak to the psychology of that, because I know you do mentoring with with students. Imagine, you know, and and I've spoke with some as well. And this is a very common thing where they buy the stock. The stock may be up 50% or 60% or 70%. Then it's dropped 50% the other way. We're just looking at numbers and percentages right now. So we're not really talking to the emotion and the experience of this. But really, what's happening is a lot of the time, people, position sizes are out of whack. So they're more than what's comfortable. And then it's happy when it's up. And then you go through that roller coaster of not only seeing your investment get wiped, but then lose half your your account. And you're sitting there and and I can tell you, it's not a pleasant experience to live through that

• 22:57Speaker 01

  because it affects your relationships, it affects your emotions, it's it's crap.

• 23:02Speaker 02

  Oh, look, during the GFC, it was devastating to just hear the stories. There were people that, for whatever reason, made some crazy decisions, putting, and they're going to do the same, have done the same thing. Bitcoin was a classic example of what happened, people putting all of their money into one area and then seeing the price dive. It's about that money management. And even if you don't know a huge amount on the technical side, just having a really good grasp of the risk management, which is what we teach, means that even if you are down in your portfolio, that eventually you'll get an opportunity to buy some more good stocks. I mean, Wesfarmers is a really good stock. People might be attracted to the fact that it's pulled back.

• 23:48Speaker 02

  So look at some of the banks and where they are at the moment. Yes, they do, they do come back, they do rise again and give opportunities, but they don't go up forever. We know that.

• 23:58Speaker 01

  All right, now, just before we move on, guys, we do have tickets to the Microcap Conference. I believe there's only a handful left. Those tickets are about $600 worth of value. We're going to be there on the 20 and 21st of October, so next week, I believe that conference is on. Please email in your name and that's all you need to email in, your name. And if you'd want to come to the conference, and if we've got a spare ticket, we will send it off to you. But stick around because we've got more of these amazing stocks to cover. And if you want the deeper analysis behind the moves, our YouTube members get the full picture each week. Key market index analysis, sector strength, individual stock opportunities and advanced market rotation analysis designed to uncover where momentum may be shifting next. Here's a quick look.

• 24:44Speaker 01

  There were clues that the market was failing. Now we've broken through the momentum and we're walking into that 88, 8700 level.

• 24:52Speaker 04

  Uranium stocks had a little bit of a dampening of their rise. We've got a little bit of a reversal happening here.

• 25:00Speaker 01

  No surprise, oil, energy, up 2.39%. But look at our sector, it's performing another one of these compressions right now.

• 25:10Speaker 01

  All right, that is just the taste of our dedicated weekly market rap, plus bonus extension content and additional stock opportunities you won't see in our free YouTube shows. It's all available to YouTube members. But time now to get into our trending topic this week. This one's a pretty important one.

• 25:27Speaker 02

  It really is, and if you own cryptocurrency, listen up. There's a lot going on that you really need to know. What if one of the biggest risks to your investment isn't the cryptocurrency that you own, but the system you're using to trade it? Security researchers have identified a potentially serious weakness involving Tether, the company behind USDT, the world's largest stablecoin. According to CoinDesk, around $91 billion worth of USDT on the Tron blockchain is governed by a system where just two of three signing keys could authorize powerful changes to the token contract. Now, that doesn't mean 91 billion has been stolen.

• 26:11Speaker 02

  There hasn't been a confirmed breach, but it raises a much bigger question. If something went wrong with Tether, could it trigger uncertainty right across the cryptocurrency market? Because Tether is used extensively to trade Bitcoin, Ethereum and many other cryptocurrencies. And unlike Bitcoin, Tether is supposed to stay around one US dollar. So confidence is everything. Now, here's what makes this even more interesting. Tether makes billions from investing the assets backing its stablecoin, yet investors may not fully understand the risks they're taking. And if confidence disappears, traders could rush to exit the dollar-pegged stablecoin USDT.

• 26:55Speaker 02

  Liquidity could dry up and prices across the crypto market could become extremely volatile. That's why I think investors need to pay attention to what happens behind the scenes, not just the headlines about cryptocurrency prices. And this brings us to Tron, because this is the blockchain at the centre of the latest Tether security concern. According to TokenPost, Tron processed more than 2.2 trillion in stablecoin settlements during the third quarter, with stablecoin activity continuing to grow. That's an enormous amount of money moving through one network. But here's the important distinction. Tether's security concern doesn't mean Tron itself has been hacked or that TRX is about to collapse.

• 27:40Speaker 02

  So rather than speculate about what might happen, let's look at something that we can assess, the price chart. Because whether you're trading stocks or cryptocurrencies, understanding the bigger market pattern and how price is trending is far more useful than reacting to every alarming headline. So is Tron showing strength or are there warning signs investors should be paying attention to? Let's take a look. Well, Phil, here's our chart. Some interesting characteristics we're seeing on this this chart right now, which is not hugely concerning, it's been holding up really nicely. It's looking like if we go to the weekly, we can see that there's some sort of agreement on price.

• 28:22Speaker 02

  It's it's tracking sideways, we're seeing these highs here, which aren't, you know, really moving much. It's got a lot to get through that. But at the same time, it's really got support under here as well, which it hasn't come back to test yet. Now, I think a clue will be if it breaks below this low in June 2026. If we see that taken out, I think that's telling you that something's going on here and someone's trying to offload it, you know. But if it doesn't get taken out and it holds up and then we see a rise through these highs here, then it's going up. So it's really that simple at this point in time.

• 28:57Speaker 01

  Yeah, I was expecting some wild stuff based on what's happened.

• 29:01Speaker 02

  It looks nice, doesn't it? This looks like one of those specky stocks that you'd see, you know, you've had this this growth phase here. It consolidates for a while before it then shoots up again.

• 29:10Speaker 01

  Well, I was going to say, it looks like it's matured. You know, at the start, all that erratic price action really speaks to something new and is what you expect. But, you know, since the end of 24, it's really matured, volatility is compressed, looks a bit more uniform, not too crazy. And on the back of this news, hopefully these data is updated to the latest. But that, you know, in some some regard can be promising. It could mean the opposite, but you know, it's right now, that's, yeah. What's all the fuss about?

• 29:40Speaker 02

  Yeah, I mean, if it comes back to around 30, then it's still not the end of the world. But, you know, if it really threatens that in a big way, we could be seeing, you know, somewhere in the order of the 25, 20 to 25.

• 29:52Speaker 01

  Yeah, there you have it. All right, guys, keep an eye out on Tron. Now, if you want the skills to analyse stocks, just like you've seen tonight, visit our website, wealthwithin.com.au. But now time to get back into our trending topic and get into some more stocks. Pedro, what have we got next?

• 30:08Speaker 03

  All right, next up, we have Adair's, ticket code A D H. So the question is with Adair's, have investors become so concerned about Focus on Furniture that they're overlooking the value of Adair's other two businesses? Adair's grew sales and underlying profits in 2026, driven by strong growth at Mocha, despite a 67.6% collapse in earnings at Focus on Furniture. What's driving the sell-off? Well, the problems at Focus on Furniture are substantial. Its sales fell 5.6% over FY26 and trading deteriorated further during the beginning of 20 FY27. So the risk is that focus on furniture sales were down twenty seven point six during

• 30:53Speaker 03

  the first eight weeks of FY twenty seven. That's not simply valuation concern, it's a business requiring a significant turnaround. So one of its segments is is is struggling, the other two are doing all right. That's basically the the story with with theirs. And the the market does like to look at the negative more than the the positive sometimes. I think that's what happens with these sell offs. And you know, obviously, the risk is is factored in. And when there's sometimes when there's growth in in other markets, I mean, right now, we're seeing the AI story and, you know, all these other markets that are in favor, these little ones, you know, if there's risk around it, well, you know, it's see you later until they prove otherwise. But theirs is actually at a very important

• 31:37Speaker 03

  and critical point right now. We can see him back in two thousand and nineteen, at twenty twenty three, more recently, in May twenty twenty six, it found support at the same level, and it's come back to that level now. So the question is whether it's going to see a rebound. And really, you've got a nice runway to see that rebound, because it's been trade range bound, you know, for the for the most life of of the stock, ever since it debuted on the market back in two thousand and fifteen, it's really been range bound between that one dollar twenty to say around that three dollars. So you've got one hundred and thirty four percent to play with. Obviously, it it's going to be hard

• 32:19Speaker 03

  to capture all of that move, you know, because obviously, this is at the bottom half here, it's high risk. And at the top half here, you want to have some indication that it is going to reverse. You can't just, you're not going to just sell it just because it's it's hit that that level. Because what if it does a another run all the way up to that all time high, and you miss out on that seventy two percent? And they're the things that you want to, you know, think about when when you're trading. And it all comes down to a little bit of experience, but of course, learning how how to trade the markets professionally, and using strict rules, because that's going to be what's what's going to guide your your decisions. So ha- having known that one hundred and thirty four percent, if you capture just

• 33:04Speaker 03

  a little bit of that, I mean, you'd be happy, that'd be a nice trade. Of course, it does need to prove itself. And and I'd say it needs to get, you know, upper above that dollar sixty would be would be nice. Of course, it would need to do some other things to to confirm as well. But, you know, the the way that it has unfolded over time, it's quite an interesting move for theirs. And and it is very much a trading stock. It's not a buy and hold. You would not want to be buying this on IPO, and then just still holding it all the way here eleven years later, with it basically doing nothing. And you're just getting a little bit of dividends along the way. But I think it's it could be setting up for a nice short to medium term opportunity coming soon.

• 33:48Speaker 01

  Awesome. All right, Janine, you wanted to add something on this?

• 33:50Speaker 02

  Yeah, I have to agree with what Pedro's saying. One thing I wanted to add was that when we're thinking about retail type stock, we we look at what what happened to it first and see that in twenty twenty four, we know that the Trump tariffs hit in twenty twenty five. And this is sort of the start of that correction, right? So when I'm looking at that, and then I'm thinking, okay, it's an interest rate environment rising, what else is happening? We know that there's a few factors working against them. It doesn't make it a bad business. It doesn't mean that it couldn't turn around and start moving back up again, after it's been sold off and has it been sold off too heavily. But one of the things that I think is interesting about this chart is it's showing how much

• 34:32Speaker 02

  it's been sold off each time it's been sold off in a right, except for this where it's gone really, you know, way out of the range, you know, it's after COVID, everything went silly, didn't it?

• 34:42Speaker 01

  Correct, yes.

• 34:43Speaker 02

  Right? But prior to that, if we look at some of the major falls, it's not out of the ordinary to see it fall like that to that with that in that degree. So this is where, like Pedro said, this is really critical time for it right now. We are coming into the best time for retail stocks in the year, right? So this last quarter is huge. They make about fifty percent at least of their revenue during that that period. So...

• 35:08Speaker 01

  Especially now. I mean, people are getting so picky because of the cost, you know, I saw in one of the, I think it was the GDP numbers, where there was an article that came out post and saying, oh, you know, the consumer confidence is back because we had a really good quarter. I think it was last year around Christmas or one of the sales. And it was like, no, hang on a second, read the room. The reason it was so so much more during this Black Friday or Christmas was because everybody was waiting all year to get the cheaper price because they couldn't afford buying it. So I found that interesting.

• 35:39Speaker 02

  It's very, consumers are very driven by those sales now, aren't they? So so this is telling us something, I think, a lot. In fact, and it could be that there's an opportunity there, like Pedro's saying.

• 35:50Speaker 01

  Awesome. All right. You want to take the next one?

• 35:52Speaker 02

  All right. The next one is Beacon Lighting Group. Beacon Lighting shares have fallen nearly forty seven percent, yet sales are accelerating. Has the market missed the beginning of a turnaround? What's driving the sell off? Weak household spending, pressure on the housing and renovation market? I don't know about you, but I'm seeing lots of that happening. And it's typical of what happens at this part of the cycle anyway. Higher operating costs and concerns about future profitability. So it's all about that factoring in six to twelve months in advance. And if if the banks are turning around saying all of a sudden that interest rates are more likely to rise, and this is what's going to happen, which they're not giving a completely clear picture at this point.

• 36:34Speaker 01

  But all of those customers.

• 36:35Speaker 02

  Well, they'll say they're right eventually, won't they? You know, and they did change their tune. I think it was a couple of months ago or last month. But now, however, the seven point one percent comparable store sales improvement in the final quarter is particularly noteworthy. So there we go. And we're just heading into that biggest period for them. So look out. One strong quarter doesn't establish a sustainable recovery. Margins have weakened and stronger trade sales may carry lower gross margins than traditional retail sales. But it's come back to a level that you'd have to think if it was going to rise, you know, that's a tick tock, tick tock. You're right on time. So looking at that, I think there's a nice little setup happening there. And it's short, maybe

• 37:19Speaker 02

  even slightly medium term, depending on what you factor in as a medium term trade, might be there.

• 37:25Speaker 01

  Awesome. Pedro, do you want to add something on Beacon before we move on?

• 37:29Speaker 03

  Yeah, very interesting. And it has been rising a little bit. So, you know, what I do like is that it is starting to sprout a little bit since this low in May twenty twenty six. However, it's still a little bit cautious. So much like what we saw with LaVisa, I'd like this trend to to stabilize and possibly break to the upside to see that continuation. But if this trend structure does start to break, then that's a different story. So I think the the market has just been a little bit cautious with with LaVisa. And I do agree that it's it's looking interesting for a short to medium term opportunity.

• 38:10Speaker 01

  Awesome. All right, let's get into our next stock, B I S. Pedro?

• 38:15Speaker 03

  All right, B I S. So their main concern is that with countries increasing defence spending, why is an Australian armour steel manufacturing experiencing falling earnings and a declining share price? What's driving the sell off? Well, Bisalloy is experiencing genuine earnings deterioration with weaker revenue flowing through to profitability. Could it recover? Well, the longer term global defence spending outlook presents a potential opportunity. Greater demand for military vehicles and armour could support specialised steel producers like Bisalloy. The risk, not all defence spending translates into Bisalloy revenue. Its industrial steel business and international operations are also exposed

• 39:00Speaker 03

  to competition and economic conditions. Of course, I mean, we've seen commodity prices flying, we've got expenses flying as well. So there's more that the business has to deal with, you know, rather than demand. There's also the the cost pressures that many businesses are experiencing. But again, the the chart is going to let you know of a recovery before all of this, you know, fundamentals catch up with it. And what I note is just this little momentum that it established from this low back here in in June twenty twenty three. And it's just come back to it right now. It's touching it. And it is looking like it's reversing a little bit. So what I like to see is is price really trade with

• 39:44Speaker 03

  With confidence above that four dollars, that four dollars, when you think about it, has been so important for this stock, you know, in the last couple of years. So if it doesn't hold up above this three dollars sixty, then we could see further falls. And I did outline that momentum that it was trading at. So there are a couple of things to watch out for. There's some heavy resistance up above that five dollars twenty as well, you know, to six dollars. But you know, this is something that I talk often to students. I said, I had an email about this the other day on price analysis. A student asked, you know, is it just about marking lines where the stock found resistance and support in the past?

• 40:26Speaker 03

  Well, I said, well, that's that's part of it, but you're not going to, you know, draw a line just because the the stock found resistance at it in in the past. How strong is that level? You know, how many times has it tested it? Does it align with other levels and so on? So, you know, without getting too too technical, it's not just about, you know, just just putting that that previous support. There's there's a lot more that goes into it. And I'd really like to have a look further into the stock to see, you know, where those levels are. But from from an initial glance, I'm seeing three dollars twenty as a possible base if it does keep falling. And like I said, I'd like to see it trade above that four dollars to sustain that that rise again.

• 41:11Speaker 01

  Yeah, awesome. If you guys do want to learn how to draw some of those or that momentum line that Pedro just showed, check this book out. There's a really nice introduction to it, just mentioning it again. Or the full step professional approach on doing those trend lines to perfection is our Diploma of Share Trading and Investment. Go and check that out on our website. But moving on now shortly, we're going to get in, we're going to answer your questions in our members area. So stick around for that. But now time to get into our hot stock tip for the week. Pedro, what have you got?

• 41:40Speaker 03

  The hot stock for this week is DeLorean Corporation. Now, that's not Back to the Future. There is an actual company called DeLorean. Ticket code D E L. So the company has just signed a non-binding twenty million financing agreement with Westpac for its N S W one bioenergy project, bringing identified funding to fifty point five million, including government grants against an estimated sixty two point one million project cost. The facility aims to convert a hundred and twenty thousand tonnes of organic waste annually into renewable gas for brickworks. With financial close targeted for eighteenth November twenty twenty six, finalizing the financing and securing the remaining funding are key milestones before the construction

• 42:24Speaker 03

  can proceed. So this company is involved in in bioenergy and this is turning that waste matter into gases that then convert, you know, in into energy. I think it's it's great. It's it's one of the the biggest ones in Australia, and they also help other companies to build that infrastructure. So they don't only do it for themselves, they're also helping to to construct them. So they're an expert in the field. So that's the the story behind it. I think that it's great that they've secured this funding, construction has started. Let's see how the market has reacted to it today and what the possible opportunities are for for Dell.

• 43:04Speaker 03

  So let's start with the monthly chart here. You see that this stock IPO back in April twenty twenty one. So it's a relatively new stock in the market. As many IPOs do, it did fall quite dramatically. A lot of them fall up to ninety percent of their value. It looks like from first glance, yeah, it does look like that's about the the same. And look at that. I mean, that was just, I guess, but it just confirms the the data that you know, most IPOs do for that ninety percent. This one's all about that ninety five percent. But it looks like there's some solid support at around that eight cents. Now, you know, when we're talking about a specky stock like this, yes, we're talking in cents.

• 43:46Speaker 03

  But the structure of it doesn't look like an illiquid stock. And when we look at, when we add in a little bit of volume into it, that tells us the picture. Have a look at this volume that came into it back here in July twenty twenty four. It was the biggest volume since the IPO. So this was such a prescribed, such a large prescribed IPO, there was a lot of, you know, selling into it once it went onto the market. But then we had that that rise in twenty twenty four. And I would say that volume has pretty much stabilized. It hasn't fallen off back to those previous levels that we saw twenty twenty three. It's done fairly well to to be sustained. Now, if you're a student of ours,

• 44:29Speaker 03

  I would recommend putting some further analysis to the chart. There's an interesting pattern that's unfolding there. When we go to the weekly chart here, it does look a little bit more illiquid. You can start to see how the chart changes. But today, the stock was up in the manner of around, at the moment, it's up around eleven percent. At one stage, it was up almost twenty percent. So it looks like the market liked that announcement. I do, I would like to see it do a few more things. Obviously, there's this downward momentum that it established from that high of twenty twenty four. It would be nice if you could, you know, break above that momentum and do a few more confirmational

• 45:12Speaker 03

  things on the chart. But I think that this is a great start. It's definitely one to put on your watch list because it may not be a buy right now. It may not be a buy in the next couple of weeks, but eventually it may be a, you know, very good buy and offer some very good opportunities because like we we saw with the announcement, they've secured the funding, they've started the construction. And of course, with that, the profits may follow. And the technicals often lead the fundamentals as we've discussed on the show. So definitely one for the watch list. And I do like the way that it is looking at the moment.

• 45:49Speaker 01

  Awesome. If you want to know which ASX companies could be the biggest winners from the latest shift in diesel markets and which stocks could be heading for a sell-off, join us in the member section. We're breaking it all down next.

• 46:03Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice.