MoneyTalks is Stockhead\u2019s regular drill down into what stocks investors are pondering right now. We\u2019ll tap our extensive list of experts to hear what\u2019s hot, their top picks, and what they\u2019re looking out for.<\/p>\n
Today we hear from Bell Direct market analyst Grady Wulff,<\/a> on three specialist, concentrated ASX stocks any cunning investor will want to consider as 2024 continues to unfold\u2026<\/p>\n When it comes to investment considerations, most investors believe large scale, diversified companies are the key to returns,\u201d Grady told Stockhead<\/em>.<\/span><\/p>\n \u201cHowever, in 2024 there are some niche, concentrated names rising up the investment ranks that present as an attractive investment opportunity in the current market landscape.<\/span><\/p>\n \u201cHere\u2019s three examples on the ASX of specialist businesses which have the potential to take advantage of the shifting sands ahead.\u201d<\/p>\n \u00a0<\/p>\n Life360 is a leading global location safety app that offers a range of features from geolocation sharing, communications, driving safety and more.<\/span><\/p>\n The San Francisco, California\u2013based American information technology company provides location-based services, including sharing and notifications, to consumers globally. Its main service is called Life360, a family social networking app released way back in 2008.<\/p>\n Via 360<\/em><\/p>\n Grady says, competing with Apple\u2019s \u2018Find My\u2019 app, Life360 has diversified in recent years and integrated a subscription model to create sustainable revenue streams.\u00a0<\/span><\/p>\n \u201cGenerating revenue from a free product is a difficult task on its own, let alone competing with one of the world\u2019s largest tech giants to gain market share, however, this is exactly what Life360 has achieved, having ticked over 66.4 million monthly active users and 1.9 million paying circles in 1QFY24. <\/span><\/p>\n Via Google<\/p>\n \u201cReporting subscription revenue growth of 52% on the PCP, net loss improvement and monthly global active users increasing by 25% on the PCP in CY23 sets a strong foundation runway for Life360\u2019s continued growth into CY24 and beyond.\u201d<\/span><\/p>\n The company also imposed price increases in 2023 which are reflecting in the company\u2019s top line results.\u00a0 <\/span><\/p>\n \u201cThe introduction of tiered membership in Australia this quarter also curtailed the price increase for subscribers in recent times and boosts the revenue generation for the leading location tracking company.\u00a0<\/span><\/p>\n \u201cLife360 achieved cashflow positivity in 2023 and has sights on the next key milestone of profitability which is anticipated in FY25.\u201d<\/span><\/p>\n Grady also adds that 360\u2019s hardware acquisitions in recent times also enhances the company\u2019s value proposition through the tiered subscription model.<\/span><\/p>\n \u201cTile and Jiobit were respectively acquired in 2021 to compete with Apple\u2019s Airtag product and complete the full suite of Life360\u2019s offering in the location tracking space.\u00a0<\/span><\/p>\n \u201cSome may question just how large a niche location tracking company can grow and that\u2019s just where Life360 sees the diversification and disruption opportunities through its subscription model offering roadside assistance and the potential to expand into pet location tracking, home security and other related industries.\u201d<\/span><\/p>\n \u00a0<\/p>\n The timing could be positive for the local high fashion stock, after the Monday plunge in the retailer\u2019s stock \u2013\u00a0 which lost near 6% by lunchtime after a major investor cashed in its chips.<\/span><\/p>\n The latest retreat means Cettire shares are now about 35% below their 52-week high of $4.90.<\/span><\/p>\n A luxurious bargain?<\/p>\n Via Google<\/p>\n \u00a0<\/p>\n \u201cIn this current high interest rate, high cost of living environment, it may confuse investors that a company in the luxury retail market would be going from strength-to-strength, however, there is reason behind the ongoing success and growth of Cettire in the current macro environment,\u201d Grady says.<\/span><\/p>\n \u201cDrop-shipping is one of the key success drivers for Cettire, which has been a key downfall for many counterparts in the retail space. <\/span><\/p>\n \u201cA drop-shipping business model ensures no inventory is held on hand and the items purchased by customers are directly shipped from warehouse to recipient. Investors have been very quick to punish listed retail companies over the last 12 months for holding high levels of inventory as fashion is cyclical and the high inventory levels often lead to write-offs or heavily discounted sales to move the excess stock through, which comes at a significant cost to the business.<\/span><\/p>\n \u201cResilience in a high-interest rate environment positions Cettire well to outperform when rate cuts arrive both locally and around the world. In the most recent trading update, Cettire announced sales revenue in 3Q24 rose 88% on the PCP to $191m, active customers rose 84% to ~644k, and confirmed the launch into the China market for 4QFY24. \u201c<\/span><\/p>\n She says that despite global economies facing slowed retail spend in recent months as interest rates bite at consumer hip pockets, it appears in this time that luxury spend is deemed a \u2018necessity\u2019 for some with overall luxury market spend growing 11% to 13% in 2023 from 2022 at constant exchange rates according to Bain & Co.\u00a0<\/span><\/p>\n \u201cJust last week, LVMH group the parent company of Louis Vuitton, Moet Hennessy and many more, reported sales grew 3% in the March quarter on an organic basis which matched market expectations, but sales at the group on a reported basis were down 2% largely due to currency impacts.\u00a0<\/span><\/p>\n \u201cWhile a slowdown in luxury spend has been anticipated since interest rates started rising, it may never arrive as we near the era of interest rate cuts, which bodes well for Cettire.\u201d<\/span><\/p>\n \u00a0<\/p>\n The global commodity cycle is a tough ride for any mining company, Grady told Stockhead<\/em>, but none more so than a uranium miner with the number of false starts the commodity has had over recent times. <\/span><\/p>\n \u201cThe 71% rise in the price of the commodity over the last year though sets a strong foundation for uranium to be the commodity of 2024, which therefore puts uranium producers at the forefront of investor\u2019s minds.\u201d<\/span><\/p>\n Via Google<\/p>\n She reckons Paladin Energy stands out as a concentrated investment opportunity in 2024 given its very recent announcement of first uranium drums produced at its 100%-owned Langer Heinrich Mine in Namibia.\u00a0<\/span><\/p>\n \u201cUranium\u2019s comeback is nothing other than a shift in demand-supply equilibrium driven by countries around the world turning back on or planning to introduce nuclear power as part of their respective green energy transition strategies. Nuclear power stations require uranium as the source of fuel where the fission of uranium atoms replace the burning of coal or gas thus producing a greener form of energy.\u201d<\/span><\/p>\n\n \u201cWith uranium demand expected to rise 28% over the next six years, and a 51% increase for the decade 2031-2040, the supply side is expected to fall very short of demand for at least the next decade.<\/span><\/p>\n \u201cWith Paladin now producing uranium, it presents as a strong investment opportunity within the green energy transition space in this current market landscape.\u201d<\/span><\/p>\n \u00a0<\/p>\n The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of\u00a0Stockhead.\u00a0<\/a>Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.<\/p>\n <\/span><\/p>\n The post MoneyTalks: Three names from Down Under which have made the Grady in 2024<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Life360 (ASX:360)<\/strong><\/a><\/h2>\n
Cettire (ASX:CTT)<\/strong><\/a><\/h2>\n
Paladin Energy (ASX:PDN)<\/strong><\/a><\/h2>\n