3 Tech Stocks That Might “Do an Afterpay”

Thursday 17 September 2020 3 tech stocks that might “do an Afterpay”

Kicking off the Report today, Michael Wayne from Medallion Financial Group takes us through 3 tech stocks that he has his eye on as possible next Afterpays!

In his article today, Tony Featherstone suggests two tech stocks he likes and one of them is the same as Michael Wayne’s favourite, which makes it worthy of consideration!

Sincerely,

Peter Switzer

Inside this Issue 02 3 tech stocks that might “do an Afterpay” 3 promising tech stocks by Michael Wayne 06 2 tech stocks I like 2 digital disruptor stocks by Tony Featherstone 09 Buy, Hold, Sell – What the Brokers Say 10 upgrades, 2 downgrades by Rudi Filapek-Vandyck 3 tech stocks that 11 Questions of the Week WOW, ROBO & CSL might “do an Afterpay” by Paul Rickard by Michael Wayne 02

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before Switzer Super Report is published by Switzer Financial Group Pty Ltd AFSL No. 286 531 acting, consider the appropriateness of the information, having regard to the Level 4, 10 Spring Street, Sydney, NSW, 2000 individual's objectives, financial situation and needs and, if necessary, seek T: 1300 794 893 F: (02) 9222 1456 appropriate professional advice. 3 tech stocks that might “do an Afterpay” by Michael Wayne

The ASX has been a consistent underperformer in In years gone by, equity indices were largely driven recent years. Looking overseas to the US and the by old economy sectors. Macquarie outlines that exact opposite has been true. The larger, FAANGM during the period from 2001 to 2010, 95% of average stocks (Facebook, Apple, Amazon, Netflix, Google yearly returns were delivered by what we would aka Alphabet and Microsoft as they have been describe as ‘old economy’ or ‘old world’ termed) have all continued to deliver stellar growth, businesses and sectors. driving the US indices higher in the process. Looking at the last decade, however, the picture is It just so happens that the larger businesses in somewhat different. Old economy sectors have Australia tend to be more mature older style accounted for less than 40% of index returns, operations, while in the US the contrary is the case. whereas new economy sectors, such as software and healthcare, have been responsible for over 60%. Market concentration growing in the US According to statistics provided by the Macquarie Looking to the US and these mega-cap technology research team, the average index weight of ‘new names have played such a key part in driving markets economy’ from 2001 to 2010 was less than ~5% in higher that many investors have become increasingly China and ~37% in the US. Today, the figures are concerned about their dominance in major indices like closer to ~50% in China and ~60% in the US. the S&P 500, where FAANGM stocks represent 25% of the index’s market capitalisation. One particular OECD study highlighted that the productivity of the top 5% of firms in any industry is Although much has been made of this increasing now growing at 4-5 times faster than the productivity market concentration, looking back at history and the achieved by some of the laggards. dominance of such a few names appears less pronounced (see chart below – weight of largest 10 These days, the share price of the top 1% continued stocks top line, weight of largest 5 stocks middle line, to steadily climb over the last two decades, with weight of largest stock bottom line – 1927 to 2020). around 40%-45% of today’s EBITDA delivered by the top 1% of profit generators. In essence, an increasing proportion of the ‘winnings’ are going to a decreasing proportion of companies within industries.

Growth at any price?

Shifting Sands: Old World v New Age

Thursday 17 September 2020 02 As a word of caution, we would not necessarily go out and buy each of these three names today. Nevertheless, it is our view that should the good news flow continue, and management keep the business on the right path, there is a high chance of meaningful success.

The three technology stocks that might do an ‘Afterpay’, perhaps not necessarily in terms of percentage returns but in respect to taking advantage of a large and growing addressable market are as follows.

Stock 1: Megaport (ASX: MP1) In a world of disinflation, as well as a low, volatile, and unpredictable growth outlook, quality businesses Megaport is a provider of elasticity connectivity and able to generate sustainable growth have become network services, operating under a Network as a increasingly more valuable. Nowhere is this theme Service (NaaS) business model. The company prides more obvious than on the ASX, with the WAAAX itself on offering the world’s first elastic SDN-based (Wisetech, Altium, Afterpay, Appen and Xero) stocks, interconnection fabric, which accelerates connection whose performance over the last five years has between customers and data centres. dwarfed even that of the FAANGMs (Facebook, Apple, Amazon, Netflix and Google and Microsoft) as Such technology can be analogised to that of the role growth starved local investors herd into a limited of a roundabout. A roundabout allows drivers to number of high growth names. efficiently change directions and quickly access different roads instead of driving to the end of one Just because a company is large and well known road, then turning to get to the other. Likewise, today, doesn’t necessarily mean it’ll remain that way Megaport allows businesses to swiftly access multiple into the future. Equity investors need to overcome cloud databases – the likes of Amazon Web Services, familiarity bias and focus on the future, what is to Google Cloud Platform, IBM Cloud, Oracle Cloud, come rather than what has happened in the past. Salesforce and SAP – through a single platform. Except, unlike a roundabout, Megaport enables There is no doubt Afterpay (APT) and any companies access to cloud databases regardless of the of the like are valued at multiples that are hard to business’ geographical location. justify based on traditional valuation metrics. In many aspects, current prices have extrapolated recent This is extremely important in an environment where success and embedded world domination price. As many multinational corporations have several such, we caution investors about chasing the next business operations across several countries and use ‘Afterpay’ and blindly following momentum, as there several cloud databases, depending on the location are never any shortcuts when investing in equity and business. Megaport effectively streamlines the markets. communication by allowing data stored in different cloud servers and countries to be accessed Nothing can or ever will substitute for time spent universally on a single platform. analysing and deeply understanding a business. Investors need to be careful not to get caught up in Megaport provides a unique payment system to cloud momentum at the expense of earnings, and ensure and data centres on a pay-as-you-go basis in terms they continue to look for growth at a reasonable price. of capacity, speed, pricing and contract length, rather than licencing or subscription fees. The intrinsic value 3 technology stocks that might do an ‘Afterpay’ of Megaport is strengthened by its wealth of some 1,842 customers, which include Adobe, BHP, Blizzard

Thursday 17 September 2020 03 Entertainment, FedEx, ING, Major League Baseball, business. In a matter of months, Pointsbet has seen Tesla and Zoom. their US market opportunity expand as each new state comes to legalise sports betting. With only a Management has confirmed COVID impacts have not minority of US states accessible so far, the runway for been significant, and we actually see COVID as being growth is still extremely large. And as the market more of a catalyst to speed up the shift towards grows, even a small market share for Pointsbet will Megaport’s services, as the cloud computing and prove lucrative. data centre demand continues to grow. Stock 3: PushPay (ASX: PPH) Stock 2: PointsBet (ASX: PBH) Pushpay Holdings Limited is a cloud-based online Pointsbet is a cloud-based sports and racing payment solution that provides a donor management bookmaker. The company does have operations in system, including donor tools, finance tools and Australia, but with the market very much mature and custom community app, to religious organisations, saturated, the true potential for Pointsbet and the part non-profit organisations and education providers in of the business we see as having the biggest the US, Canada, Australia and New Zealand. opportunity is the large and rapidly growing US market. Founded in 2011, Pushpay operates under a SaaS (Software as a Service) model, with a heavy At first glance, Pointsbet appears like any other emphasis on churches. As of 31 March 2020, sports betting service and provides the typical Pushpay maintains a customer base of 10,896 offerings as any other standard platform. However, it churches and an annual revenue retention rate of differentiates itself with its patented ‘pointsbetting 100%. While Pushpay is listed on both the Australian markets’, which add a new level of strategy and Securities Exchange (ASX) and New Zealand Stock excitement to betting. Exchange (NSX), 98% of its customers are in North America (US and Canada). Basically, the game-changing concept is to pick an outcome with an amount to wager per point – the Pushpay’s acquisition of Church Community Builder, more correct you are, the larger the payout. For a US-based leading provider of church management instance, if a bet was to win by 1 point above the line system (Chms), in December 2019 proved to be (the score offered by Pointsbet), customers would “God’s gift”. The acquisition complemented receive $1. If it was to win by 20 points, customers Pushpay’s custom community app and donation would win $20. solution, such that online churches could manage administrative affairs and ensure church With the amount of sports betting in Australia, it is announcements, sermon streaming, and mobile hard to imagine a sports-centric country like the US giving were maintained throughout the quarantine had a nationwide ban on sports betting right up until period. We argue Pushpay’s integrated system for 2018. At that time, a supreme court ruling passed the churches poses as a powerful competitive advantage ability to legalise sports betting over to individual that differentiates them from other payment process states. Logically, the revenues involved make this a services like PayPal and Stripe. very enticing prospect for states and for this reason, we have seen and expect to continue seeing an We are also very encouraged by Pushpay’s total explosion in the number of states legalising. processing volume growth rate, as a key component of their revenue is the processing fee of 1.8%. In Pointsbet is positioning themselves as one of the first FY20, total processing volume increased by 39%, movers in the US. With a unique offering, quality amounting to US$5 billion, which is expected to grow technology and large marketing budget, they are more as Pushpay states most churches see a 76% continuing their aggressive growth strategy to lock in growth in recurring givers in their first 6 months an early piece of a market with unbelievable growth without losing current givers. potential as additional states begin to open for

Thursday 17 September 2020 04 With social distancing restrictions expected to continue, Medallion is encouraged by Pushpay’s prospects as revenues and gross operating margins jump, all while total operating expenses improve.

At Medallion, there is a strong emphasis on the founder and management team’s involvement, as we believe it increases the likelihood of management’s interests aligning with shareholder interests. Hence, we find co-founder Chris Heaslip and Directors’ equity stake amounting to 49.7% encouraging, as it suggests there is a vested interest for management to grow the company.

We view it as a great opportunity to take a position in a business that is rapidly growing their customer base, revenue, and margins, both organically and through targeted acquisitions. While Pushpay’s customers are predominantly North American, it is important to consider the prospects of global expansion, given the world’s Christian population is 2.3 billion.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.

Thursday 17 September 2020 05 2 tech stocks I like by Tony Featherstone

Was the sell-off in tech stocks the start of a larger Tech valuation risks are too high. correction or a buying opportunity? I would, however, use the sell-off to identify tech If only it was that simple. The tech industry has terrific companies that are key beneficiaries of disruption prospects, but I wouldn’t aggressively “buy the and are well down from their high. Rigorous sector” now. Selective buying of quality tech stocks is bottom-up company selection is always better than key. top-down analysis, and especially so in the elevated tech sector. There are times for momentum-based sector ideas. Now is not one of them because the sector ran too The long term outlook for technology is better than far, too fast in the past six months. ever. Disruption is just starting in many sectors; megatrends such as e-commerce, cloud computing, The time to buy was in March, when I nominated tech software-as-service and semiconductors have years as my preferred sector during COVID-19. Over of faster growth ahead as COVID-19 forces business, several columns, I nominated tech Exchange Traded government and consumers to up their tech usage. Funds (ETF) and local stars such as Xero, WiseTech Global, Altium and JB Hi-Fi (a tech retailer). Then there’s 5G, which will spawn a new wave of disruptors (probably in machine-to-machine In Australia, the S&P/ASX All Technology Index is up communication), just as 4G was the catalyst for Uber, 93% from its March low. The US Nasdaq 100 Index is Snapchat and others. up around 60%, despite heavy falls this month. Clearly, investors need higher portfolio exposure to Investors who piled into technology ETFs during the Australian and international companies that are March meltdown have done well. Those who buy driving disruption or benefiting from it. Adding quality tech ETFs now in anticipation of similar gains will be technology companies during a sell-off is one way to disappointed. achieve it. Here are two to consider:

It could take time for the Nasdaq 100 to reclaim its 1. Pushpay Holdings (PPH) previous high. The US Presidential election in November is a headwind and economic and I nominated the digital-donations company as a stock pandemic risks abound. to sell (near $4) in June 2018 after a co-founder in the company sold his stake. Pushpay steadily drifted But for all the recent gloom, the Nasdaq is back to lower over the next 18 months, slumping below $3 in where it traded in mid-August. If a 10% sell-off is the March 2020. From there, it soared to $8.76 and now worst of it after stratospheric gains this year, investors trades at $6.87. should be relieved. Pushpay is an unusual stock on ASX. The New Still, I wouldn’t be buying tech ETFs during this Zealand-based company develops payment sell-off, in anticipation of tech indices quickly technology for churches, schools and charities. recovering lost ground and scooting to new heights. Church parishioners, for example, use Pushpay

Thursday 17 September 2020 06 software to donate money rather than putting it in a looks like it is in a sweet spot. plate at mass. After a huge rally, Pushpay has fallen from a 52-week E-tithing is big business. Pushpay has almost 11,000 high of $9.09 to $6.87. A sell-down by a major backer customers in 19 countries. The company processed of the company in July spooked the market, but who US$5bn of transactions in FY20, up 39% on the year. can blame key investors for taking some profits after Pushpay’s revenue grew 32% to almost US$130 the stock more than doubled in a few months? million in FY20. Religion aside, Pushpay is a software-as-a-service Bible Belt churches in southern US states are company with a first-mover advantage in a growing embracing “e-collection plates”. Tithing technology global market. Key risks include megachurches encourages higher and more frequent donations from developing their own tithing technology to replace parishioners, and provides data and insights that intermediaries, although I can’t see that happening in churches use to better understand their congregation. a hurry.

Parishioners, particularly younger ones who carry After recent falls, Pushpay warrants a spot on less cash or none at all, prefer digital donations. They watchlists. If the global tech sell-off lingers, the can donate on the spot through their smartphone or software company would be a useful portfolio sign up to a regular tithing plan. This smart addition. technology solves a problem for cash-strapped churches. From a technical-analysis perspective, Pushpay needs to stay above $6.80, a point of previous price COVID-19 is increasing demand for digital donations support. as face-to-face church services in many countries are suspended. Anecdotally, some US churches have Chart 1: Pushpay Holdings (PPH) abandoned their traditional offering plate because passing it among parishioners has health risks.

Also, tithing technology is helping churches stay in contact with parishioners who may be attending services online – and maintain donations that are no longer possible through physical collection plates.

COVID-19 has interesting implications for Pushpay. I Source: ASX wonder if e-attendance at church will become the norm for some people, particularly those who struggle 2. Audinate Group (AD8) to attend mass each week because of time, health or child-minding constraints. Like Pushpay, Audinate soared off its March low, but has retreated in recent months. From $6.90 in early Granted, it’s a sensitive conversation. For many June, it trades at $5.31. parishioners, online church will never substitute for the real thing. My guess is that churches that are Manufacturers use Audinate chips, modules, cards dying because of a lack of young parishioners might and software in their audio and video products. Key find they have a much larger online audience. Just as customers include Bose, Yamaha, Bosch, Sony and young people attend university online, some might Sennheiser. prefer to worship that way. Audinate fell after its FY20 profit release in August. Regardless, COVID-19 will limit the appeal of large Revenue dropped in May due to COVID-19. gatherings at mass, at least in the next year or two, Management said the impact of the Coronavirus on and quicken the move to digital donations. Pushpay sales was hard to predict, adding that second quarter

Thursday 17 September 2020 07 (calendar year) growth was below that required for Audinate has plenty of near-term challenges due to revenue growth in FY21. COVID-19, but networked digital connectivity continues to replace traditional point-to-point Flat revenue growth is a deal breaker in emerging analogue cabling in the AV industry, and tech companies. After more than doubling from its software-based AV systems are replacing hardware 52-week low, the market needs Audinate to justify its AV systems. rapid share price gains. These are significant tailwinds for Audinate when For all the short term pain, Audinate is a leading COVID-19 noise eases. supplier in a global market. The company notes independent forecasts showing Audio-over-an-IP Chart 2: Audinate (AD8) (AoIP) volumes will triple over 2020-24.

As more people work, learn and play at home, it’s a good bet they’ll spend extra on microphones, speakers, amplifiers and other audio equipment that has Audinate tech. (Coincidentally, I’ve been thinking of buying new computer speakers due to an increase in Zoom and Microsoft Teams meetings – and my need for better audio to support note taking). Source: ASX

Digital networking for work and study is just starting. Tony Featherstone is a former managing editor of More employees will collaborate in digital teams; BRW, Shares and Personal Investor magazines. The university students will increasingly work in online information in this article should not be considered teams; and many families will communicate through personal advice. It has been prepared without online video platforms, having used Zoom during the considering your objectives, financial situation or pandemic. needs. Before acting on information in this article consider its appropriateness and accuracy regarding These trends will drive higher long term demand for your objectives, financial situation and needs. Do audio and visual equipment, and technology that further research of your own and/or seek personal powers it. Audinate looks well placed to benefit. financial advice from a licensed adviser before making any financial or investment decisions based Like other successful tech developers, Audinate has on this article. All prices and analysis at 15 high margins and a high proportion of repeat September 2020. customer orders. The company has extensive intellectual property, a bluechip global customer base and $68 million in cash on the balance sheet after an equity capital raising.

My sense is the market will want confirmation that the worst of COVID-19’s impact on Audinate sales has passed and that the tentative sales recovery in June and July is strengthening. Until then, Audinate shares could drift sideways or head lower if the global tech stock sell-off continues.

That could be a buying opportunity for long term investors who understand the risks of investing in small-cap tech companies.

Thursday 17 September 2020 08 Buy, Hold, Sell – What the Brokers Say by Rudi Filapek-Vandyck

CHALLENGER (CGF) was upgraded to from $4.48. Outperform from Neutral by Credit Suisse INCITEC PIVOT (IPL) was upgraded to Buy from Credit Suisse assesses Challenger is trading at a Neutral by UBS significant discount to book value. While there may be some downside risk to FY21 earnings and the first UBS raises the rating for Incitec Pivot to Buy from half is likely to be challenging, there is significant Neutral, given recent relative share price valuation support. Moreover, the broker notes underperformance, a recovery in global fertiliser potential for a positive catalyst with the pricing and an attractive valuation. The broker government’s retirement income review, possibly estimates that the improved fertiliser pricing outlook, due around the budget in October. Rating is particularly DAP, can underpin 13% earnings (EBIT) upgraded to Outperform from Neutral. Target is growth into FY21. Additionally, free cash flow steady at $4.25. generation of circa $300m supports an attractive dividend yield of 8% (long run average 6%). The CSL (CSL) was upgraded to Buy from Neutral by analyst thinks the current share price assumes a Citi DAP/ammonia price in FY21 of US$330/230t versus the broker’s forecast of US$350/250t. UBS lowers Citi recently upgraded to Buy from Neutral and raises EPS forecasts for FY20, FY21 and FY22 by -10%, the target to $325 from $320. The broker assumes -10% and -12%, respectively, due to a higher plasma collections are depressed in the second half Australian dollar assumption. The target price is of 2020 and first half of 2021, with a return to normal increased to $2.40 from 2.25. in FY22. The broker assesses demand for plasma product is robust and current levels of growth should JB HI-FI (JBH) was upgraded to Outperform from likely continue for several years. Neutral by Macquarie

HARVEY NORMAN HOLDINGS (HVN) was Consumer spending was elevated over the upgraded to Outperform from Neutral by Credit September quarter as durables benefited from Suisse constraints on travel and services. Moreover, Macquarie points out a new 5G handset and console Credit Suisse upgrades forecasts for Harvey Norman, launches will create interest going into Christmas. expecting a longer term boost to household goods The broker’s research suggests the online offering expenditure than previously forecast. The broker’s from JB Hi-Fi handled demand better over the second investigations reveal behavioural changes are half compared with many peers. Consumer durable persistent, and when combined with a range of labour expenditure is likely to remain elevated for the rest of market and household income scenarios for FY21 2020 and provide upside for the short term. Hence, produce a favourable outlook. Moreover, Harvey the broker upgrades to Outperform from Neutral. Norman has a relatively low exposure to Melbourne’s Target is raised to $53.70 from $48.80. mandated retail closures as only 8% of stores are located in greater Melbourne. Rating is upgraded to WESFARMERS (WES) was upgraded to Outperform from Neutral and the target lifted to $5.01 Outperform from Neutral by Credit Suisse

Thursday 17 September 2020 09 Credit Suisse upgrades forecasts, expecting the which suggests an intrinsic value opportunity to Credit boost to household goods expenditure will be longer Suisse. Regis Resources is upgraded to Outperform than previously anticipated. Wesfarmers is also from Neutral with a target raised to $6.45 from $5.90. positioned to add value through strategic acquisitions in the industrials and home improvement sectors. If In the not-so-good books acquisitions are not undertaken in 2021, a return of capital could become more likely, the broker adds. CREDIT CORP GROUP (CCP) was downgraded to Rating is upgraded to Outperform from Neutral and Neutral from Outperform by Macquarie the target lifted to $51.59 from $47.30. Macquarie assesses current conditions are affecting In the good books (gold stocks) the level of debt sales in Australia, and while US markets remain more active pricing is above the Credit Suisse is increasing its 2021 gold price company’s targets. The broker had expected forward forecasts to US$2500/oz and 2022 to US$2200/oz, flow sales and new business would recommence in amid a number of supportive macroeconomic factors. August/September but the risk is now for activity Across the broker’s gold coverage this bullish gold being stalled until November. The broker downgrades price outlook produces company valuations that are to Neutral from Outperform as the risk of ongoing above current equity prices. delays in new debt sales and forward flow activity could have a negative effect on earnings in the short EVOLUTION MINING (EVN) was upgraded to term. Target is reduced to $18.50 from $20.70. Outperform from Neutral by Credit Suisse GALAXY RESOURCES (GXY) was downgraded to The broker likes Evolution Mining for several reasons, Sell from Hold by Ord Minnett not the least because it is the low-cost and high-margin operator among peers, which is partly As part of an overall mining sector review, Ord driven by conservative reserve gold pricing. Rating is Minnett downgrades the recommendation to Sell from upgraded to Outperform from Neutral with the target Hold for Galaxy Resources. The broker sees a raised to $6.55 from $6.00. significant part of the lithium recovery already priced in. Despite, this lithium markets are considered to NEWCREST MINING (NCM) was upgraded to have bottomed and the analyst continues to model Outperform from Neutral by Credit Suisse higher prices from here. However, the spodumene part of the supply chain is seen as well supplied. The Newcrest Mining is the preferred exposure on target price is unchanged at $0.90. valuation grounds. The broker upgrades to Outperform from Neutral and raises the target to The above was compiled from reports on FNArena. $37.70 from $35.30. The FNArena database tabulates the views of seven major Australian and international stockbrokers: Citi, PERSEUS MINING (PRU) was upgraded to Credit Suisse, Macquarie, Morgan Stanley, Morgans, Outperform from Underperform by Credit Suisse Ord Minnett and UBS.

All mid-cap gold miners are priced at a discount, Important: This content has been prepared without which suggests an intrinsic value opportunity to Credit taking account of the objectives, financial situation or Suisse. Perseus Mining is upgraded to Outperform needs of any particular individual. It does not from Underperform on valuation grounds. Target is constitute formal advice. Consider the raised to $1.60 from $1.30. appropriateness of the information in regard to your circumstances. REGIS RESOURCES (RRL) was upgraded to Outperform from Neutral by Credit Suisse

All mid-cap gold miners are priced at a discount,

Thursday 17 September 2020 10 Questions of the Week by Paul Rickard

1. What has caused Woolworths (WOW) to dive CSL has total shareholder funds of US$6.5bn. This over the last two weeks? The demand for their comprises approx. US$10.7bn of ‘retained earnings’ goods hasn’t changed. plus a negative US$4.5bn of ‘contributed equity‘ (the amount you refer to), plus US$0.4bn of reserves. The market suddenly woke up to the fact that there will be a lot less money in the economy over the The negative contributed equity is due to share coming months and the boom in retail sales is coming buybacks. Where the price of the buyback is higher to an end. From the end of September, both than the issue price of the shares, the difference has Jobkeeper and Jobseeker payments are being to be accounted for and this becomes negative to reduced. Social security recipients will not be contributed equity. receiving one off payments (they have received two of $750 each), and super withdrawals are coming to CSL shares were originally issued for an effective an end. It will be a lot tougher for many people – the A$0.77 per share. If you are doing a buy back (CSL easy period is over. shares are now around A$290.00), this is a massive difference. All retail stocks have pulled back in the order of 10% (“dive” is too strong a term). Woolworths also went I should point out that CSL has not undertaken a ex a dividend of 48c per share. buyback for some time and the balance sheet is reflecting buybacks undertaken some years’ back. The demand for goods may not have changed but there will be considerably less stimulus to support it. 4. Do you think CSL will split its shares again?

2. I am interested in investing in robotics and AI. I It is possible, but unlikely. Remember that a share think there is an ETF, ROBO, that is available. split creates absolutely no value for shareholders. It is What are your thoughts on ROBO? a book entry only, not a single dollar of revenue or profit is created. All that happens is one piece of There are two ETFs (exchange traded funds) that tap paper is exchanged for three pieces of paper (on a 1 the themes of robotics, automation and AI (artificial for 3 share split). intelligence). ROBO from ETF Securities and RBTZ from Betashares. I think both are OK but they are Potential new CSL shareholders aren’t being quite different in terms of the companies they access. materially inconvenienced with the current CSL share I have done a review on Switzer Daily – you can price. They have to spend a minimum of about $600 access it here: to buy two whole CSL shares, rather than the ASX https://switzer.com.au/the-experts/paul-rickard/are-yo prescribed minimum investment amount of $500. u-ready-to-invest-in-robotics-automation-and-ai-mega trends-here-are-two-simple-ways/ As a shareholder, I would be saying to the CSL Board to focus on maximising profit and long-term value, 3. On CSL’s balance sheet, it has negative rather than spending any energy or time on a share contributed equity. Can you explain how there split. can be negative equity?

Thursday 17 September 2020 11 Would you like your share questions answered by Paul Rickard? Submit your question here.

Thursday 17 September 2020 12