TRANSCRIPT 🔗
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Hello and welcome to the midweek edition of the Shoes If I podcast.
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Steve and James are here.
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Hi fellas.
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Very good.
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Excellent.
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This is our third pod in three days.
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Uh we've been very busy.
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Monday, uh James and I chatted with Katin Patel of um J U G I, JP Morgan UK Small Cap Growth and Income.
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That was great, wasn't it, James?
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Very enjoyable, yeah.
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Fit Katan talked us through, you know, uh the process, the opportunities in small caps, so well worth a look.
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Yeah, yeah, very good indeed.
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And uh Steve, you and James were chatting with the chap from Kepler.
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Yeah, and Joseph Lick Lick Shower, I think his name, that was how you pronounce it, wasn't it, James?
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Yeah.
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Um, really fascinating.
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Uh, he's he's a man with uh a clear depth of uh knowledge about the uh professional trust space and particularly about the emerging market space.
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Um and one thing to mention, we spoke off off camera earlier, is both these chaps, uh Joseph and Katan, will be presenting at our Shesify wealth and retirement show.
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So all that wealth of knowledge is available on stage, and you get the chance to ask some questions if if we don't or they don't cover any topics that you are particularly uh interested in.
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And you can pigeonhole these guys as well, you know, buttonhole these guys.
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You can you can grab them uh in in in the the milieu as we we stand around and chat in between uh presentations and stuff, and just go up to people and have a chat.
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That's that's half the reason to be there.
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So um, yeah, great opportunity.
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Yeah, it is absolutely, and just a reminder go to the Sharzi Fire website, go to the events on upcoming events, and as you're a podcast listener, you can get 50% off by using the code podcast in block caps, and we hope to see you there.
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Uh, meanwhile, Steve, loads going on in your tech space.
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Yeah, I mean it's it's I mean, this this has been sort of kickstart really.
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And we had overnight, we had uh earnings from SpaceX, and we also had an upgrade to forecasts from Supermicro Computer, which was a real investor favourite um some months back, but it's it's kind of um struggled a little bit more recently.
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But I mean the the the the fundamental messages out of both firms is is there's absolutely no sign of the AI CapEx tax being turned off.
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Um, if anything, it's the opposite is true.
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It's still the question is about um how are we going to uh monetize and get real returns from a capex that is being spent.
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So I think 2026 is probably gonna go down from the as the year that um investors stopped just buying AI and started buying superior AI returns.
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I think that's really where the uh the the direction of travel is is heading, and sensibly so I would say.
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Yeah, very interesting.
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Um those guys were quite good.
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Netflix disappointed?
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Yeah, I mean a little bit soggy on the the the the forward guidance uh on the Q4s.
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Um there's been quite a lot going on at Netflix.
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Uh, if you've if you keep up with uh the the company, um they've uh laid off some some staff recently.
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It's the biggest layoff they've they've had um to date, and they've also changed their head of content.
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Uh the bottom I've got a new guy from Disney.
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Um so quite a lot of of stuff going on behind the scenes.
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Um so I don't know to what extent that may have affected things.
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Um, but ultimately, you know, the the the third quarter numbers were were the forecast beats, but the fourth quarter numbers the guidance was just a little bit soft, so that's obviously going to it's going to uh you know impact sentiment.
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Yeah, so we're back to that.
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It's the forward guidance, isn't it?
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Those matches exactly that.
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Uh and James from Netflix to Wix, yeah, indeed.
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This is consumer stock resilience, it continues to be the story, really.
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So I pick up his sales in Q3 for Wix.
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Uh a couple of turnaround stories caught my eye as well this week.
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So Mulberry, where Mike Ashley's Frasers has a sizable stake, tried to take it over a few years ago.
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Yeah, sales are looking quite strong in all geographic regions, actually.
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So the the guy there's done a quite good turnaround job.
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And then out this morning we had Virgin Wine, so a return to growth after a few years, net cash balance sheet.
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This is the online wine retailer.
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It's got the balance sheet to whether what is a tough consumer backdrop, lots of sort of regulation tax in the
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alcohol industry.
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Um, and then quite a busy week for trusts as well.
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So I don't know if you spotted the International Biotech Trust, the ninth portfolio takeover of 2026.
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So that's more than the whole of 2025.
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So silence therapeutics was taken over by Merck.
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And we spoke to ALSA and Merrick uh a few weeks back, didn't we?
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Which was very interesting.
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Yeah, Juno, I keep I'm still kicking myself.
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I've got to buy shares in that.
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That is such a winner.
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Um, talking of uh corporate activity and takeover, we finally got uh an agreed bid today for um Ashd Technology AT.
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So uh final cash offer£6.15.
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The shares closed yesterday at£5.30, so a nice bump.
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And look, if you own the stock at three quid where it was trading before there was any whisper of a bid, then you've doubled your money, which is very nice.
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Um, Gulf Keystone is merging with another company, so more corporate action.
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Um, the other things I think caught my eye this week are XPP, uh XP power, record order intake.
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You know, continuing this run of good news among you know UK mid-cap industrials.
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Um, and then unfortunately, on the other side of it, Genuit, the old polypipe business.
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Uh, that took a proper hit because they talked about challenging conditions.
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Uh, luckily, we left that out of our climate change picks, James.
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Um, then we had Tristel yesterday.
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Now that's one of mine.
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Good numbers, but the shares went down.
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I gather HSBC trimmed their price target on it, but nothing you can do about that.
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Um, then we have plus 500 making an acquisition in Brazil.
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That's interesting because you and I do a little note on non-tech growth stocks, and that definitely qualifies plus 500.
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Uh, I have to say, Domino's interestingly, out today, slight downturn in or slow down in key threes.
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But actually, that has been a phenomenal growth stock for the last 25 years.
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Um, so I wrote that up.
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I have to say, big mistake writing that up from 11 o'clock because I'm absolutely starving now looking at pictures of pizzas and chicken dip, which you were telling talking about.
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Um, and then of course your virgin wine.
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So I'm just now picturing a pizza and a bottle of Brunello.
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Um, I think the really interesting point I think worth making here is we've been talking about uh UK uh fund managers and talking about how how many opportunities they are up there are, despite the UK market largely being out of favour with the global uh investor scene, how many opportunities, and this was confirmed with the conversation we had with uh Joseph uh Lichdau uh yesterday.
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Um the fund managers he's been speaking to that are UK based, just saying they they can see just a deluge of brilliant investment opportunities.
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So it really will be a testing ground of will those brilliant uh investment opportunities show up in in future returns over the next year or two?
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And that I suppose is is how how you'd assess it.
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Yeah, and and the interesting thing is quality growth seems to be turning around again after a really tough period.
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Quality growth stocks seem to be coming to the fore, which is fascinating.
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Um, James, what else have we got to look forward to this week?
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Yeah, we've got uh half one results from Bloomsbury tomorrow.
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So that's the Harry Potter publisher and uh Sarah J.
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Marr's Romancy novels.
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I'm sure you're you're both fans of.
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Um Sainsbury's yeah, romantic, that's it.
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Yeah, uh first half results from Sainsbury tomorrow.
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And what I'll be keeping in on is a third quarter update from Inchcape.
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So this is the global automotive distributor, uh big emerging markets presence.
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So um that should be very interesting to see what they've got to say.
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Interesting.
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Uh I picked up a little story, James, in that retail space.
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Uh uh I notice my local pound land is is always really busy, but they seem to be really struggling.
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It's privately owned, and it sounds like B and M are in negotiations to potentially pick up um some of the store portfolio if it goes that far.
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Uh Pound Stretcher also uh said to be eyeing up stores maybe in the UK, maybe in Ireland as well.
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So maybe that's a story to keep your eye on with from the BM uh point of view, uh, to see if they um decide to take on some of that real estate.
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Yeah, well, Steve, you'll be looking at IBM.
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Uh IBM, yeah, absolutely.
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And not to be confused with with IBS.
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Um,
there's a there's a there's a you know a deluge of of big earnings um later this week.
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We've got meta overnight tonight, uh, we've got land research, uh, we've got IBM, uh, we've got Texas Instruments.
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Um, even companies like uh Thermo Fisher are announcing results.
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I think they're tomorrow night.
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Um, a big scientific technology company.
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Um, loads and loads and loads of stuff to look forward to.
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Um and it will really um, I think by the time we get to the end of this week, I think we'll have a much clearer idea about what the temperature is for um what the appetite is from investors for um AI, the AI story, the AI trade, and and generally in in technology shares, are they willing to pay some of the higher valuations?
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But it's also worth remembering that some of the big companies you presume are on really fat valuations and not necessarily so.
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And and look look again at your Microsoft's at your Nvidia's the old school ones that we haven't talked about um uh for a few months, really, because they've been other stories, and and some of these companies are trading now on on barely 20 PX.
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So it's really worth reassessing some of the um the big stories that have been around for four or five, six years, really driving portfolio turns, and to see where their valuations really are, because they might be lower than you actually expect.
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Yeah, it we'll be fascinating actually when we get back together on um on Friday to see what these results look like.
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Um, UK, I would just finish up with Barclays, um, which is down 12% this year.
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It's been a real disappointment, it's had a terrible Q3.
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In fact, most of most banking stocks have had a poor Q3.
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Um, we've got London Stock Exchange Group.
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Now that is another great growth stock.
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It's um it's up there with plus 500 and dominoes.
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Uh and of course, here it's been it's been dogged by this story about will it's will its lunch be eaten by AI?
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And and the idea to me has always been if you own big data sets, then that's really valuable because you can use those data sets to train AI models, and AI companies will have to pay you to utilize those data sets.
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So why on earth the the NSE is is being uh hammered in the way it has, does rather surprise me, I have to say.
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Yeah, I mean the fact is that whether it's an AI agent or a whatever third party, um, they still have to pay to access the data.
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There's no two ways about it.
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And they and they're not cheap either, as we know from the shared point of view.
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I wasn't gonna go there, but yeah, you're right.
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Um, and then we've got interesting, we can compare and contrast Rentakill and Rollins.
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Now, Rollins was always the uh the star of this of these two, and uh Rentakill was always the poor relation, but this year Rollins has really had a fall from grace.
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So it was it was really overvalued and disappointed, and shares are down 45%, so we get a chance to compare these two.
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Um, and then finally, I'll probably, you know, Amex, I would flag on Friday because that's a very good indicator of the state of the US consumer, basically.
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One of Warren Buffett's favourites, uh, you've held that for many, many, many years.
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Um, and and it's still a significant holding in the Bark Hathaway portfolio, uh, as far as I understand.
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Yeah, really interesting.
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Uh, that will be, I think.
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Yeah, well, that's it for us.
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Um, we will catch up with you on Friday, and uh bye for now.
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Cheer out