2 ideas in 200 words #7

A stock hit by temporary disruptions and one that is growing faster than it can manage.
Romano Sala Tenna

Katana Asset Management

We are topping up...

Corporate Travel Limited (ASX: CTD)

CTD 5-year chart (Source: Market Index)
CTD 5-year chart (Source: Market Index)

We continued to add to our CTD holding during the recent Israel-Iran conflict, as travel stocks were sold on anticipated disruptions. As tragic as the conflict is, it is unlikely to have a material impact on the company’s long-term growth drivers. 

Such events invariably provide an opportunity to add to high-calibre businesses at a discount. CTD has also become the 11th most shorted stock on the ASX at -9.51%. This is unusual for a company of this quality, and sets the scene for a potential short-squeeze if earnings continue to grow as forecast.

Also adding to...

Austin Engineering Ltd (ASX: ANG)

ANG 5-year chart (Source: Market Index)
ANG 5-year chart (Source: Market Index)

ANG is down 45% financial YTD and is most likely experiencing the final wave of tax loss selling. In what is a rarity, the main culprit appears to be excessively rapid growth, which has stretched their production capacity. 

As a result, higher costs from expansion and temporary contractors have significantly crimped margins in the rapidly growing Chilean operations. Revenue is on track to set another record at $370m, with an even stronger outlook for FY26. Not surprisingly, Thorney Group recently increased their stake to 20.4%.

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2 stocks mentioned

Romano  Sala Tenna
Portfolio Manager
Katana Asset Management

Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.

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