Last week I caught up with one of our analysts Jono Higgins who covers a cross section of emerging companies in Australia. He’s a good analyst and it was worthwhile hearing his views, particularly around Z1P Co (Z1P) which he’s been covering since it was a minnow. I hope you enjoy our catch-up via Zoom


I’ve also briefly summarised MM’s thoughts around the 3 main stocks covered in the video. One important aspects of these companies highlighted in the video is their high Beta i.e. when the market corrects they are highly likely to fall harder and vice versa when equities take their next leg higher – we clearly saw this in March.

1 Zip Co. Ltd (Z1P) $5.23.

We’ve been a fan of Z1P through 2020 and still feel this $2bn business is presenting good risk / reward around the $5 region following its almost 30% pullback – as we said above don’t underestimate the volatility.

MM likes Z1P around $5.

Zip Co. Ltd (Z1P) Chart

2 Money3 Corp Ltd (MNY) $1.55.

MNY is a more mature business which specialises in automotive lending, sounds more “risky” but of course the margins are attractive. Impressively the stock has paid a 6.4% fully franked yield over the last 3-years making it arguably an aggressive ~$300m yield. Technically the markets not a believer at present hence we would be more inclined to monitor MNY for better risk / reward opportunities.

MM is currently neutral MNY.

Money3 Corp. Ltd (MNY) Chart

3 Damstra Holdings (DTC) $1.31.

Work place management solutions business DTC has a market cap now approaching $200m after rallying strongly after the panic sell-off in March. The stock looks good at current levels but we would advocate stops under $1.10 which is a fairly chunky risk

MM likes DTC with stops under $1.10.

Damstra Holdings (DTC) Chart

Conclusion

Our favorite stock of the 3 covered today is Z1P.

Register for a free trial to Market Matters

At Market Matters, we write a straight-talking, concise, twice daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them.

To sign up for a free trial to Market Matters, leave your email and phone number through the 'CONTACT' button below.