Momentum Investing Opportunities.

[KW]

A good example of just how potent a resistance level can be. 

HUB had a crack at its resistance in Feb last year but was unsuccessful, but a second attempt in August was.  Later during a pullback that resistance level was tested, and as it should, it held and became a support level.  From there, onwards and upwards.

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[KW]

PNV PolyNovo - great breakout from a good base.  Catalyst was dropping an excellent half yearly update.

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[KW]

With the new bull market in full flight, there are lots of buy signals happening.  But now attention turns to when to sell them so you can lock in profits, and deploy the funds into new opportunities. 

C79 has had a great run, after a bit of a false start post IPO in 2022.  As price increased, volume increased as more investors piled in to the stock.  This made it an increasingly "crowded trade" and increased the risk of a steep downside should the company disappoint the market.  Which it has done, with its latest 4C and commentary.

Big runups increase the risk of big drawdowns.  Or as they say "escalator up, elevator down".  So you need to be prepared to sell, especially around the time of earnings reports.  And in many cases, the cross of the 13 day MA (the white line) below the 50 day MA (the red line) is often a good signal.  This cross wont happen so long as the uptrend is in place, so when it does occur, its often a good exit point.

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[Whome]

C79 appeared to be on the way to blues skies growth, then this sudden downturn in the share price coincided with a statement on page 2 of a 9 page announcement 24-1-24 to ASX (sorry link copy won't work atm) that following completion of a successful bank loan of $65 mill, the CFO realised they would not be able to do what they promised, and declared the benefits from this investment would be put off for a year. How very Australian ... they seem to get away with it there more often than NZ.

[Hectorplains]

PFP Propel Funeral Partners
Now that Invocare has been taken over, PFP is the only listed funeral business on the ASX.  And with the big increase in deaths in 2022 and 2023 (and probably 2024) business is booming.  I'm fully expecting an earnings upgrade.
Their recent investor presentation is also worth a read as its has some good industry research on future death rates in Australia and NZ.

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They feature on Street Talk

The country's No.2 funeral services player Propel Funeral Partners's bosses have launched a $90 million equity raising to reduce the funeral provider's net leverage and restock its acquisition kitty.


Propel Funeral Partners is Australia's No.2 player in funerals and cremations. iStock

The raise was split into an $80 million placement and would be followed by a $10 million share purchase plan. Propel's brokers, Barrenjoey and Bell Potter were offering shares in the placement at $5.15 apiece or a 4.3 per cent discount to the last close.

Terms sheets sent to fund managers on Tuesday said the raising would leave Propel with 1.5-times net leverage against a five-times limit set by its covenants. The company would have $170 million in funding capacity after the raise. An accompanying trading update said Propel would pay $4.6 million to buy New Zealand's Southern Funeral Home, which has five locations and generates about $2 million in annual revenue.

Propel's bosses have ordered the cash call at a time when TPG Capital's acquisition of InvoCare turns private equity's attention to the sector. Street Talk has previously reported Propel's No.2 position and growth track record caught the eye of IFM Investors, which is understood to have weighed a bid. For its part, Propel ran an investment bank beauty parade last year to select a defence adviser, ultimately hiring Barrenjoey.

[KW]

They feature on Street Talk

The country's No.2 funeral services player Propel Funeral Partners's bosses have launched a $90 million equity raising to reduce the funeral provider's net leverage and restock its acquisition kitty.


Propel Funeral Partners is Australia's No.2 player in funerals and cremations. iStock

The raise was split into an $80 million placement and would be followed by a $10 million share purchase plan. Propel's brokers, Barrenjoey and Bell Potter were offering shares in the placement at $5.15 apiece or a 4.3 per cent discount to the last close.

Terms sheets sent to fund managers on Tuesday said the raising would leave Propel with 1.5-times net leverage against a five-times limit set by its covenants. The company would have $170 million in funding capacity after the raise. An accompanying trading update said Propel would pay $4.6 million to buy New Zealand's Southern Funeral Home, which has five locations and generates about $2 million in annual revenue.

Propel's bosses have ordered the cash call at a time when TPG Capital's acquisition of InvoCare turns private equity's attention to the sector. Street Talk has previously reported Propel's No.2 position and growth track record caught the eye of IFM Investors, which is understood to have weighed a bid. For its part, Propel ran an investment bank beauty parade last year to select a defence adviser, ultimately hiring Barrenjoey.

Its a roll up play in a industry that is also expanding organically - so double bang for your buck.  As opposed to other roll up plays like dental clinics or childcare operators where the underlying industry is not in expansion mode.  

[KW]

C79 appeared to be on the way to blues skies growth, then this sudden downturn in the share price coincided with a statement on page 2 of a 9 page announcement 24-1-24 to ASX (sorry link copy won't work atm) that following completion of a successful bank loan of $65 mill, the CFO realised they would not be able to do what they promised, and declared the benefits from this investment would be put off for a year. How very Australian ... they seem to get away with it there more often than NZ.

That's because people dont have high expectations from the small cap market.  Mostly primed for that belief with half the exchange being speculative mining stocks, and a notorious "wild west cowboy" mentality applied to running them.  To this day, one needs to be cautious of companies with their head office in Perth, or audited by non-Big4 auditors.  

But hey, its all part of the fun.  You get a wild ride up, and then try your best to avoid the worst of the blowups or bombs (or at least, get out quickly).  The ASX is no place to be complacent.  But you can limit your chances of blowing up your portfolio by simply "not drinking and buying shares in a downtrend" 

[Whome]

But hey, its all part of the fun.  You get a wild ride up, and then try your best to avoid the worst of the blowups or bombs (or at least, get out quickly).  The ASX is no place to be complacent.  But you can limit your chances of blowing up your portfolio by simply "not drinking and buying shares in a downtrend" 

Only had a small holding from the specky fund, but none-the-less on reading that 'Act, don't just re-act' was employed with an immediate sale and a $600 loss that would have been far better spent at the Oyster & Chop!

[KW]

Only had a small holding from the specky fund, but none-the-less on reading that 'Act, don't just re-act' was employed with an immediate sale and a $600 loss that would have been far better spent at the Oyster & Chop!

Small losses are easily made up on new investments.  Big losses can be portfolio destroying.  Its always better to take a small loss and then move on, then to sit for years waiting to recover a big loss, or worse, turning a small loss into a big loss.  

[winner (n)]

The NYSE advance/decline line is showing divergence from S&P and this apparently good

[KW]

CKF Collins Food (operator of KFC, Taco Bell) has delivered a good trading update.  Its clearly the result of all those Kiwi's moving to Australia this year 

Nice technical move today to put it into a Stage 2 breakout

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Follow up on CKF.  Exited this week, with a 9.3% return for a 2 month hold (including a 12.5c dividend).  Reason for selling, the cross of the 13 day MA below the 50 day MA, which often signifies that this particular leg up has run out of puff.  Also the sustained selling over the last 2 weeks is an ominous sign.

While 9.3% doesnt sound like much, thats equivalent to a 55.8% annualised gain.  The aim is to now recycle that capital into the next share that is going up.  That is how you get superperformance.  Why? To quote Mark Minervini ....

"It's far better to sell into strength than wait too long and lose all or most of the sizeable gain you once had. When you sell into strength, your equity value is at its highest point. If you want to maintain an equity curve that consistently stair-steps up, you should learn how to sell when you have a decent gain while the stock is advancing.

Waiting too long to sell also runs the risk of losing time value. When you hold a stock through a significant correction, you may have to go through weeks, months, or longer before it starts another leg up. During that time, you're tying up your money instead of getting out at a profit and moving on to the next best opportunity.

Remember the lesson on time value: thanks to the power of compounding, if you can get a small but consistent return and repeat it over and over, it could be far more productive than trying for a bigger return that takes several months or even years to produce.

Time Value and the Power of Compounding
Two 40 percent returns = 96% return
Four 20 percent returns = 107% return
Twelve 10 percent returns = 214% return

These numbers are eye-opening for many novice traders who think that their only hope of achieving superperformance is finding that one "moonshot" stock. But eight trades that produce a 10 percent profit will more than double your money. And 12 trades (one per month on average) that produce a 10 percent return will more than triple your money. So ask yourself: how much easier would it be to find a dozen stocks that go up 10 percent, versus finding three or four that produce a 40 percent return, or one that doubles or triples? This is opportunity cost at work."

— Think & Trade Like a Champion: The Secrets, Rules & Blunt Truths of a Stock Market Wizard by Mark Minervini

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[KW]

360 - a breakout to end all breakouts 

CY23 Financial Highlights 
• Revenue of $305 million, a YoY increase of 33%
• Core Life360 subscription revenue2 of $200 million, up 52% YoY, ahead of guidance for more than a 50% YoY increase; • Net loss of $28.2 million, a $63.5 million improvement from CY22; 
• Positive Adjusted EBITDA of $20.6 million ahead of guidance of $12 million - $16 million, with consistent Positive Adjusted EBITDA delivered in each quarter of CY23; 
• Positive Operating Cash Flow (OCF) of $7.5 million, a $64.6 million improvement versus CY22; 
• Year-end cash, cash equivalents and restricted cash of $70.7 million up from $63.7 million at the end of Q3'23


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[Shareguy]

Wow up 36 percent in a day. I can't recall any sizeable NZX stock going up that much in a day for a very long time. Well done.

Hope discovery funds have this one.

[Shareguy]

https://youtu.be/3AmBNOGopk8?si=4vrR8VIld83s6LgL

[KW]

https://youtu.be/3AmBNOGopk8?si=4vrR8VIld83s6LgL

I read somewhere that the main driver for customer acquisition is to be able to track teenage kids in cars, see where they are going, and how fast they are travelling.  Considering how many kids are killed in reckless driving incidents in NZ, I can understand that.  

Perhaps there is a Govt application here too - install the app on all those little shits who steal cars, go on police chases, and commit ram raids.  Should be expanded to all parolees and offenders on home detention, as clearly those ankle bracelets dont do anything.  

I would get a Tile for my pets though.  Missing cats and dogs are a big problem.