Thursday 12 November 2020 Are , , Corporate Travel, Airport, and good buys?

Tony Featherstone says it’s time to buy travel and stocks. Overseas signs for tourism stocks are good. Stocks that benefit most from greater travel and a vaccine – the so-called “reopeners” – soared in the United States this week. They include casinos, airlines, hotel chains and cruise ships. In his article today, Tony Featherstone looks at 4 Australian travel-related stocks to watch.

Sincerely,

Peter Switzer

Inside this Issue 02 Time to buy travel stocks Time to buy travel stocks by Tony Featherstone 06 Buy, Hold, Sell – What the Brokers Say 5 upgrades, 14 downgrades by Rudi Filapek-Vandyck 10 Which “HOT” travel stock would you choose? Which “HOT” travel stock would you choose? by Maureen Jordan Time to buy travel 12 Questions of the Week Questions of the Week stocks by Paul Rickard by Tony Featherstone 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. Time to buy travel stocks by Tony Featherstone

It’s time to buy travel and tourism stocks. With some The good news is this awful outlook has been Australian State borders reopening and promising factored into in the share prices of several vaccine news, travel stocks will outperform the share high-quality travel stocks. If anything, there’s too market next year. much pessimism.

Yes, the sector is a long, long way from a full The reopening of the /Victoria recovery. ’s international tourist and border at the end of November is great news. So, too, foreign-student markets will take years to reach Victoria’s decision last week to finally remove the previous heights. “ring of steel” and allow Melburnians to travel to the State’s regions, and vice versa. In other good news, Much could go wrong with COVID. Pfizer’s news this South Australia will soon decide whether to reopen its week on its trials results boosted markets, but its border with Victoria. vaccine still must be approved and distributed. How many people will refuse it? Even recalcitrant border states, such as and Western Australia, will have to reopen their Australia, almost COVID-free for now, faces the risk border by early December at the latest, to enable of new outbreaks as people mingle over summer. Christmas travel. It would take a brave State Premier Don’t discount the risks of outbreaks as we head to keep borders shut and families apart during the towards winter 2021. festive season.

Then there’s an economy in recession, high A gradual reopening of international borders is unemployment and the end of government wage another plus. The “bubble” arrangement with New subsidies in the next five months. That’s when Zealand will slowly and steadily extend to other household belts will really tighten. countries. Expect inbound international travel to remain low and slow for most of 2021, before much Business travel, recovering faster than leisure travel, stronger growth in 2022. is challenged. Cost-cutting companies will favour Zoom meetings over costly business flights and Australians are itching to holiday and see loved ones short-stay hotel visits. interstate. Pent-up travel demand is at an all-time high, according to the American Society of Travel Consumer psyche is another issue. How many Advisors. Almost half of its survey respondents said people, particularly older Australians, will want to travel will be their first major purchase when the travel overseas with the same fervour? Or even fly pandemic ends. interstate if COVID lingers? For all the talk about high unemployment, Australians There’s a good reason why travel and tourism was have built up a huge savings buffer during COVID, the first sector to be smashed during COVID and will thanks in part to government support and spending be the last to recover. It’s more affected by the cutbacks. Those who normally holiday each year pandemic than any other industry. presumably have money saved for a new trip.

Thursday 12 November 2020 02 For clarity, I’m not suggesting the travel sector will to recover strongly from this time next year thanks to recover quickly or that stocks in this sector will get huge pent-up travel demand. A persistently lower oil back to their previous highs anytime soon. price will be another tailwind for Qantas.” Prospective investors need to hold these stocks for at least three years and be prepared for bouts of high That view still holds. Qantas’s recovery is just volatility. starting.

However, I do believe the underperformance of travel Chart 1: Qantas (QAN) stocks will reverse in the next six months. And that more capital will rotate from growth stocks, such as tech and resources, into better-value plays, such as banks and parts of the travel sector.

Gains this weeks are just the start. From a charting perspective, key travel stocks that have traded sideways in accumulation phase since March are poised to break through price resistance and head Source: ASX higher. 2. Holdings (SYD) Overseas signs for tourism stocks are good. Stocks that benefit most from greater travel and a vaccine – I’ve been a fan of Sydney Airport for years and have the so-called “reopeners” – soared in the United nominated it several times in this Report and on States this week. They include casinos, airlines, hotel Switzer TV programs and webinars. Leading airports chains and cruise ships. are fabulous monopoly assets and none locally are better than Sydney Airport, given that city’s tourism Here are four Australian travel-related stocks to market. watch: I nominated Sydney Airport and 1. Qantas Airways (QAN) International Airport (AIA) in this Report on April 22 in my column “Airport stocks destined to rise once Peter Switzer, founder of this Report, asked me in more”. August to nominate my top stock for the next 12 months. My answer: Qantas. Sydney Airport was $5.70 at the time and now trades at $6.75 after soaring gains this week. AIA has rallied It was a tough call at the time, with Victoria in a harsh from $5.46 to $7.31 and has further to run, albeit lockdown and COVID rampant overseas. But as gains will be slower from here. contrarian ideas go, Qantas was a beauty. The airline was $3.78 in late August and now trades at $5.19 AIA said at its recent annual meeting there had been after soaring 10% early this week. a larger-than-expected rebound in domestic air travel and car parking at its airport. The same will be true of I wrote to Peter in late August: “Global airlines are a Sydney Airport. basket case because of COVID-19. Australian airlines are no exception. Border closures, grounded fleets, I expect Sydney Airport to have record domestic Virgin’s demise and rebirth, massive job cuts at travel in FY22, assuming COVID is contained in Qantas… the list goes on. Australia. Then, for a muted recovery in international travel to pick up pace in FY23. “Fast forward 12 months and the aviation outlook will be improving. Granted, a recovery in international Either way, Sydney Airport is undervalued, though not flights will be protracted due to lingering COVID-19 excessively so after gains this week. problems overseas. But domestic travel will be poised

Thursday 12 November 2020 03 Chart 2: Sydney Airport (SYD) machines and other gambling.

Chart 3: The Star Entertainment Group (SGR)

Source: ASX

3. The Star Entertainment Group (SGR) Source: ASX

I’ve written favourably about the integrated resort 4. Flight Centre Travel Group (FLT) operator several times in this Report this year. Poker machines and other forms of gambling recovered The is a new addition to my ideas list faster than expected in markets such as New this year. I preferred Webjet (WBJ) to Flight Centre, Zealand. I expect that to be the case for The Star. nominating Webjet in May 2020 as a takeover target at $3.24. It now trades at $4.85. At its Annual General Meeting in late October, Star CEO Matt Bekier said trading performance from July Flight Centre has disappointed in the past two years. to October was “pleasing”. Domestic gaming After peaking at around $60 in mid-2018, the stock revenue was approximately three quarters of that at fell to $8.92 at the height of the share market sell-off the same period a year earlier – a good achievement in March 2020. given the pandemic. Flight Centre had many challenges before the The Star’s Queensland properties have traded pandemic. Its large bricks-and-mortar travel-agency strongly and the Sydney casino should improve as network was being disrupted by online rivals. Flight social-distancing restrictions in that city are eased. Centre’s transition to online travel retailing was well underway, but too many shopfronts was a Disarray at rival , the subject of a headwind. high-profile NSW Government inquiry, could boost The Star’s Sydney casino. Counsel assisting the The pandemic will create three long-term benefits for NSW inquiry concluded that Crown is not a “suitable Flight Centre. First, it has forced the company to person to continue to give effect to the licence (for rationalise its shopfront network by closing many Sydney’s new Barangaroo casino)”. stores. My local Flight Centre store, for example, has permanently shut. It should never have been there in Crown is under growing pressure to delay the the first place. planned mid-December opening of its high-roller Sydney casino until the independent Liquor and Second, the pandemic has quickened Flight Centre’s Gaming Authority NSW determines its suitability to push into business travel. Once known mostly as a hold a licence. That uncertainty is good for The leisure-travel provider, it has a large, growing Star’s Sydney casino. business-travel division.

After a small bounce following the March share Early signs suggest business travel is recovering market sell-off, The Star has tracked sideways for faster than leisure travel given pent-up demand from much of this year. It rallied 7% to $3.80 on Tuesday – company managers to visit clients and attend the start of a larger recovery that will unfold over the interstate meetings. next 18 months as more social-distancing restrictions are relaxed. And as more people flock back to poker I doubt business travel will ever be quite the same

Thursday 12 November 2020 04 again due to Zoom and other online meeting technologies. But there is plenty of room for a short-term recovery.

Third, Flight Centre has strengthened its balance sheet during the pandemic and excelled at cutting costs. It will emerge from the pandemic as a more streamlined, efficient business with higher margins and a greater online presence.

After mostly trading sideways since April, Flight Centre leapt 10% on Tuesday after the monster US equities rally. Its recovery will take time, but has a long way to play out.

More fund managers will buy Flight Centre in the next few weeks/months in anticipation of recovering travel demand amid border reopenings. But the real story is how COVID will positively reshape Flight Centre over the next three years.

Chart 4: Flight Centre (FLT)

Source: ASX

Tony Featherstone is a former managing editor of BRW, Shares and Personal Investor magazines. The information in this article should not be considered personal advice. It has been prepared without considering your objectives, financial situation or needs. Before acting on information in this article consider its appropriateness and accuracy regarding your objectives, financial situation and needs. Do further research of your own and/or seek personal financial advice from a licensed adviser before making any financial or investment decisions based on this article. All prices and analysis at 10 November 2020.

Thursday 12 November 2020 05 Buy, Hold, Sell – What the Brokers Say by Rudi Filapek-Vandyck

In the good books upgraded to Buy from Hold by Ord Minnett

CSL (CSL) was upgraded to Accumulate from The flagship Global Fund has continued to perform Hold by Ord Minnett well and Magellan Financial has added new growth avenues, including the investment in Barrenjoey. In Encouraging news regarding a covid-19 vaccine addition, Ord Minnett notes the company has provides a two-fold boost to the outlook for CSL, in generated its strongest institutional net inflow for a the opinion of Ord Minnett. Plasma collections should half year since 2015. As the stock has remained flat normalise by the end of FY21, allowing a potential since early July, the broker now envisages a boost to nearer-term sales from a larger inventory valuation gap re-emerging and upgrades to Buy from release, explains the broker. The analyst believes the Hold. Target is raised to $70.48 from $63.57. vaccine candidates the company is manufacturing now appear more likely to succeed, based on the PENDAL GROUP (PDL) was upgraded to add from similar antibody profiles. This is considered to raise Hold by Morgans the potential for a new multi-year revenue stream. The company began production of the Morgans upgrades the rating for Pendal Group to Add AstraZeneca/Uni Oxford vaccine this week at its from Hold due to a favourable balance of risk/reward facility. The broker expects the company over the next twelve months, a good net cash position will be paid for these initial doses irrespective of and leverage to a broader equity market recovery. whether the vaccine is successful. Ord Minnett raises The company reported ‘core’ net outflows of -$3.9bn the target price to $330 from $290, leading the broker in FY20, of which -$3.3bn was from EU funds. The to upgrade the recommendation to Accumulate from result was broadly in-line with the analyst Hold. See downgrade below. expectations. The broker sees flows as remaining relatively subdued, unless assistance comes from (FBU) was upgraded to potential funds flow into UK/EU markets. In that case, Overweight from Equal-weight by Morgan Stanley the analyst highlights the upside leverage the company has to a broad and sustained equity Fletcher Building’s trading update for the four months market improvement through 2021. The rating is ending October showed better revenue and operating upgraded to Add from Hold and the target price of income than last year with improvement seen in $7.02 is unchanged. margins across all business units. Morgan Stanley believes the strong performance is an indication of (SUN) was upgraded to Add the resilience of the market and has from Hold by Morgans increased its operating income forecast for FY21 by 66% with the estimate for FY22 increased by Suncorp Group has given a natural hazard update 46%. Morgan Stanley upgrades its rating to following the significant Queensland/New South Overweight from Equal-weight with the target rising to Wales hailstorm on 31 October 2020. The group has $5.91 from $3.66. Industry view is Cautious. disclosed that natural hazards for the four months ended October are tracking at -$348m-$408m, which MAGELLAN FINANCIAL GROUP (MFG) was compares to the group’s FY21 hazard allowance of

Thursday 12 November 2020 06 -$950m (split evenly 1st half vs 2nd half). Morgans consumer behaviour will return to normal in 2021. To lowers FY21 and FY22 EPS forecasts by -2%-4%, that end the broker has reverted to pre-covid which reflects an update of numbers for a sum-of-the-parts valuations. Domino’s Pizza’s target mark-to-market. The rating is increased to Add from is lowered to $72.10 from $84.30. Downgrade to Hold on valuation grounds. While the operating Underperform from Neutral. The broker has not environment remains difficult for the group near term, provided earnings/dividend forecast updates. Morgans thinks the recent pullback in share price is probably overdone. The target is decreased to $9.90 FINEOS CORP (FCL) was downgraded to from $10.32. Accumulate from Buy by Ord Minnett

In the not-so-good books The company has reiterated guidance for 30% underlying growth in FY21 subscription revenue at its CSL (CSL) was downgraded to Neutral from Buy AGM but did not recommit to the 20% organic top-line by Citi growth target. While the long duration growth opportunity is highly attractive, particularly in the US, Citi now assumes plasma collections return to Ord Minnett moves the rating down to Accumulate pre-pandemic levels from January 2021 and, with the from Buy, pending a clearer view on the impact of 6-7 month lead time for production, the earnings macro conditions, such as the pandemic and the US impact will be spread over FY21 and FY22. The election. Uncertainty around new deal closures are broker eases back on forecast declines in earnings likely to overhang the stock, in the broker’s view, per share for FY21-22, and as the stock has albeit probably short term. Target is reduced to $4.50 outperformed the ASX200 by 16% over the year to from $5.00. date, downgrades to Neutral from Buy. Target is reduced to $320 from $325. (IPL) was downgraded to Neutral from Outperform by Macquarie See upgrade above. Incitec Pivot’s FY20 underlying profit and earnings DOMAIN HOLDINGS AUSTRALIA (DHG) was fell short of Macquarie’s and consensus forecasts. downgraded to Neutral from Outperform by Credit Dyno (explosives) was the biggest source Suisse of the miss, with management suggesting a return to normal only post-covid. We’re not yet post-covid, so A strong listings recovery in Sydney provided a no dividend was declared due to ongoing uncertainty favourable first quarter for Domain Holdings and when the broker had forecast 3.5c. An anticipated Credit Suisse notes reliance on the Sydney market earnings recovery has been pushed out to FY22, with was evident in October volumes. October volumes FY21 a “transition year”, management suggests. were more subdued nonetheless and the broker Vaccine news since announced is a positive but coal lowers first half digital revenue growth estimates to volumes remain challenging. Macquarie pulls back to 4.1%. Management has also guided to a -12% Neutral for now from Outperform. Target falls to $2.30 reduction to the first half cost base. Credit Suisse from $2.63. downgrades to Neutral from Outperform, given the limited upside from current trading levels. Target is JB HI-FI (JBH) was downgraded to Neutral from raised to $4.40 from $4.00. Outperform by Macquarie

DOMINO’S PIZZA ENTERPRISES (DMP) was In a response to the response to the vaccine news downgraded to Underperform from Neutral by with regard consumer stocks, Macquarie suggests Macquarie that while virus winners will have a positive 2020, consumer behaviour will return to normal in 2021. To In a response to the response to the vaccine news that end the broker has reverted to pre-covid with regard consumer stocks, Macquarie suggests sum-of-the-parts valuations. JB Hi-Fi’s target is that while virus winners will have a positive 2020, lowered to $49.50 from $54.90.. Downgrade to

Thursday 12 November 2020 07 Neutral from Outperform. The broker has not As a result of recent vaccine developments, Morgans provided earnings/dividend forecast updates. lowers multiples (while largely leaving earnings unchanged) for those stocks likely to suffer from a (JHX) was return to some sense of normality (redirection of downgraded to Neutral from Outperform by Credit spend). The broker continues to think Christmas will Suisse be a boomer this year and first half results will show extraordinary growth with strong operating Cash flow has been confirmed as strong in the expense leverage on buoyant top-line trading. second quarter, with revenue and earnings having However, it’s considered the market will likely look been pre-announced. Credit Suisse notes operating through this strength. cash flow was already 92% of full FY22 cash flow because of an inventory reduction attributed to ACCENT GROUP (AX1) was downgraded to Hold customer integration. Net debt is reduced and the from Add by Morgans company will pay a full-year equivalent dividend for the final, which the broker estimates at US48c. Given Accent Group is yet to provide a trading update post the earnings revisions over the year to date, Credit its FY20 result (due at the AGM). Morgans expects Suisse considers the potential for further material trading outside of Melbourne has remained robust, upgrades in FY21/22 has diminished. Rating is with online the major driver. Nonetheless, as a downgraded to Neutral from Outperform. Target is discretionary retailer, the broker expects the stock’s raised to $39.00 from $38.50. ability to outperform will be limited from here. The rating is decreased to Hold from Add. The target price (RHC) was downgraded is decreased to $1.67 from $1.84 to Neutral from Outperform by Credit Suisse BABY BUNTING GROUP (BBN) was downgraded Credit Suisse notes the shares are up 6% following to Hold from Add by Morgans the Pfizer announcement of positive interim data for its coronavirus vaccine. While continuing to believe Baby Bunting benefited more from covid-19 than the that Ramsay Health Care would benefit from volume broker anticipated. The company’s products are far post the pandemic, significant earnings pressure is less discretionary than the rest of Morgans retail assessed for the near term as cases rise in . coverage. Nonetheless, the analyst downgrades to Credit Suisse makes earnings downgrades of -1-2% Hold from Buy on the elevated price earnings multiple across the forecast period. The stock is now trading versus vaccine sentiment only. Morgans still thinks in line with a target of $70 and the rating is the group looks very well positioned over the long downgraded to Neutral from Outperform. term. The price target is decreased to $4.84 from $5.23. (WES) was downgraded to Neutral from Outperform by Macquarie BEACON LIGHTING GROUP (BLX) was downgraded to Hold from Add by Morgans In a response to the response to the vaccine news with regard consumer stocks, Macquarie suggests Beacon Lighting was a major beneficiary of covid-19 that while virus winners will have a positive 2020, via in-home spending and Morgans still sees upside consumer behaviour will return to normal in 2021. To risk to FY21 earnings. Nonetheless, from the fourth that end the broker has reverted to pre-covid quarter the group will cycle elevated comparisons to sum-of-the-parts valuations. Wesfarmers’ target is prior corresponding periods. The rating is lowered to $49.70 from $51. Downgrade to Neutral downgraded to Hold from Add and the target price is from Outperform. The broker has not provided decreased to $1.50 from $1.73. earnings/dividend forecast updates. MOTORCYCLE HOLDINGS (MTO) was In the not-so-good books (Morgans analysis) downgraded to Hold from Add by Morgans

Thursday 12 November 2020 08 Motorcycle Holdings was a major beneficiary of covid-19 and Morgans still sees potentially material upside to FY21 forecasts. However, the company’s products are highly discretionary and a potential redirection of spend is a key risk from current elevated earnings levels. The broker highlights the balance sheet position looks rock solid post covid-19. The rating is downgraded to Hold from Add and the target price is decreased to $2.67 from $2.83.

SUPER RETAIL GROUP (SUL) was downgraded to Hold from Add by Morgans

Super Retail Group’s businesses (excl. Macpac) have benefited from domestic consumption conditions resulting from covid-19 in recent months, notes Morgans. The balance sheet is also considered in a solid position (zero net debt). While the broker expects this will continue to play for a period yet, it’s expected the market will be less willing to capitalise current earnings at higher price earnings (PE) levels. The rating is decreased to Hold from Add and the target price decreased to $11.78 from $12.59.

The above was compiled from reports on FNArena. The FNArena database tabulates the views of seven major Australian and international stockbrokers: Citi, Credit Suisse, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS. 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 12 November 2020 09 Which “HOT” travel stock would you choose? by Maureen Jordan

In Tony Featherstone’s article today he talks about 4 No double many of our subscribers are in this large stocks that will/could benefit from the opening up of retail number! Peter then fired a question at Matt: “I the Aussie economy, and at some stage the world want to ask this question. A lot of fund managers economy. In our monthly seminar (held on the first have been a bit ‘cheesed off’ that all these young Friday of each month exclusively for Switzer Report people have poured into the market when the market subscribers) Peter (Switzer), Paul (Rickard) and their sold off, thinking that these stocks are good value. I guest Matt Williams, Portfolio Manager at Airlie Funds guess in the short term they might be stung, but in the Management, took a ‘Russian roulette’ question long term they probably will eventually get rewarded, about the travel sector from a webinar attendee. The do you agree?” question from Angus concerned the best travel buy: Flight Centre versus Webjet versus Corporate Travel, “Absolutely, and I’m certainly not cheesed off that versus Qantas. Did our experts have a preference? young people are in the market,” Matt retorted. “I think it’s fantastic. They have an interest and they’re “Ah, I can see you want to play the re-opening learning and they’ll learn more. You learn by making trade,” said Paul, throwing the first response to Matt. your mistakes and by losing a bit of money, you learn from that,” Matt said. “We do not own any of those other names and the reason is that they’ve had to recapitalise. So there’s So Matt’s answer to Angus’s question? “Qantas!” a big hole they have to come out of in terms of their he said. earnings per share and their profits. And they’re going to be spread over a much larger equity base. And Paul’s pick? “I’d choose Qantas too,” he Also, they’re exposed to the international reopening, added. less so for Qantas. So really Flight Centre and Webjet, in particular, are all about international And Peter’s favourite? “I hold all three,” he replied. reopenings. And that’s few years down the trail,” he Is anyone surprised?! said. And by the way, Tony has made a good call on Always a rational optimist, Peter added his view: Qantas several times in this Report! And to be “Matt, I interviewed John Gusic, Webjet’s CEO honest, the others as well! Peter and he have a lot in during the week for our podcast, and he’s happy common! their share price bounced back faster than expected,” Peter said. Qantas

“But he actually said that on the local trade for Webjet, that they will be profitable just by the borders opening up straight away. One thing staggered me and will stagger you. Before the Coronavirus, they had 10,000 retail investors. Now they have 65,000,” Peter said.

Thursday 12 November 2020 10 Source: Google

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 12 November 2020 11 Questions of the Week by Paul Rickard

Question 1: I have a term deposit coming due and Legg Mason Equity Income Fund) or the Switzer am looking to invest for ongoing income. I note Dividend Growth Fund (SWTZ), but these are Betashares ETFs EINC and YMAX appear to offer traditional equity funds and may not be a direct good franked yields. The notes advise that EINC substitute for your term deposit (unless you want to invests in an actively managed portfolio of increase your allocation to growth assets). income-oriented Australian shares, but does not use derivatives. By contrast, YMAX seeks to enhance Question 2: Referring to James Dunn’s excellent dividend income through a ‘covered call’ strategy. article on biotech companies, what is the best way to Can you explain the ‘covered call’ strategy and invest broadly in this field?. Other than HLTH, are comment on the risk profile of this? there any other ETFs, LICs or Funds?

Answer: A covered call strategy involves writing a Answer: It is very hard to invest broadly domestically put option and receiving a premium for doing so. For because the companies tend to be small and there is example, assume the ETF owns CBA shares. It a high failure rate. Further, because the products writes a put option at (say) $75.00, which is higher typically have a global audience and long lead times than the current market price. If it is never exercised, from idea to commercialisation, very deep pockets it just pockets the premium. If it is exercised, it sells are required. The model for most Australian biotech the shares at $75.00, plus keeps the premium. It firms is to develop the product and then sell that (and might argue that it was happy to sell CBA shares at the IP) to a global healthcare company to $75.00. Obviously, if CBA keeps rising, it is going to commercialise and distribute. look a little silly. If a covered call strategy is done professionally and consistently, it can potentially On the ASX, the nearest I can find is CURE from ETF gross up the return on the portfolio of stocks and Securities (this tracks the US S&P Biotechnology allow the fund to pay a higher income distribution to Index). HLTH from Van Eck and DRUG from its unitholders. That’s the theory at least. Betashares are focussed on global healthcare leaders. I am not a fan of “Equity Income” funds of this nature. YMAX, which is the BetaShares Australian One company who you might want to talk to is the IQ Top 20 Equity Yield Maximiser Fund, has Group Global, who “find, fund and develop underperformed since inception. While it has paid a bioscience discoveries to create life-changing medical higher income, its overall return since inception innovations”. (which includes the income) is 4.00% compared to the Australia 20 index performance of 6.86% – a Question 3: I would like to get your thoughts on massive underperformance of 2.86% pa. In a relative PushPay’s (PPH) latest mid-year results. They have sense, it has done a little better over the last 12 again upgraded their guidance but it was worrying months to 30 September (-10.22% vs the index return they did not add a single customer over the period. of -10.13%), but this is nothing to write home about. Cross selling has been greatly beneficial for the Pass. growth and revenue of the company. It would be great to see what you all think of Pushpay at the I would be more comfortable with EINC (BetaShares moment, with a shift from technology to the reopening

Thursday 12 November 2020 12 trade.

Answer: I think you nailed it. The company marginally upgraded guidance, but added zero net customers in the last six months. The re-opening trade may also work against them (or slow the acceleration to digital giving). The brokers are mixed on the stock (1 buy, 2 neutrals, 1 sell). According to FN Arena, the consensus target price is around $7.40, about the same as the ASX market price of $7.30.

Question 4: Can you please advise the best way to get exposure to 5G? Is there an ETF that specifically covers 5G

Answer: The only way I can think of getting exposure is through , which is highly indirect. I do not know of any ETFs. I will ask our readers for other stocks/ideas. Readers – can you help please?

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 12 November 2020 13

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