3 results that caught our eye

Ben Clark

TMS Capital

Earnings are coming through better than expected, but its still a tough grind out there. In this video, we look at some results and themes that caught our eye. We've summarised our thoughts on three results below, but watch the video for our full analysis. 

Altium

The technology businesses have had some pretty wild reactions to their price. I actually thought Altium's result was an incredibly good result. We looked at this in more detail on Livewire 2 weeks ago. 

While a great result, it was a slight miss versus expectations yet the share price jumped... so go figure. The CEO is building out to his long-term goal and he's incrementally, continually making progress every time we hear from him, and there's a great growth story there if he pulls it off.  

Seek

The result itself reflected what Seek's been doing recently, which is great revenue growth, but no profit growth because they've been pumping all the excess revenue back into investment. I think there's been a growing sense that shareholders got a bit frustrated that they're not seeing the profit line running.

But Andrew Bassat, the CEO, I think offered a bit of a grapevine a couple of days ago where he gave the market some sense of where he believes the company could get to, with a $5 billion revenue aspirational goal by 2025. Just by way of context, they did $1.6 billion in revenue last year. 

I love seeing stuff like this because the market doesn't think five years ahead, it thinks five weeks ahead. And what I do know is that if Seek gets close to that revenue goal in 2025, the share price is worth a lot more.

WiseTech

Wisetech is a pretty amazing business. Each additional year customers tend to spend about 20-30% more revenue on the platform. There is no one else trying to emulate what WiseTech have done, and I think they're so far ahead now that there's never going to be anyone that will emulate them. 

The issue of this business is of course, just how do you price it? Such a huge potential for the company. It could become the Google of the infrastructure space, but you're paying 100 times earnings for that now. 

As we've seen with Altium and as we've seen with a lot of the tech stocks, these stocks can very rapidly have 20-30% price adjustments, but the long term story is there with all of them.

Watch the video for the full discussion



Ben Clark
Portfolio Manager
TMS Capital

Ben Clark commenced his role as Portfolio Manager with TMS in 2005 and has over 20 years’ experience in the industry. Ben runs the TMS High Conviction fund that is open to all sophisticated investors.

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