Buy Hold Sell: 5 ASX stocks flying too close to the sun
Matt Riordan (Paradice) and Marcus Burns (Spheria) debate which high-flying ASX winners are still worth paying up for.
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Handed a pair of wings made of feathers and wax, Icarus was given one simple rule - stay the middle course. Fly too low and the sea weighs you down. Fly too high and the sun melts your wings.
Naturally, caught up in the thrill of soaring higher and higher, he ignored the warnings and fell into the ocean.
As we all know, that thrill hits investors too when a company is flying. Valuations detach from reality and suddenly the market is pricing in absolute perfection, leaving zero margin for error.
In this episode of Buy Hold Sell, we’re looking at five market high-flyers that might be daring to fly too close to the sun. Joining us once again are Matt Riordan from Paradice Investment Management and Marcus Burns from Spheria Asset Management.
Let's get into it.
This episode was filmed 4th November 2026.
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Verdict summary
Stock
ASX Ticker
Matt Riordan
(Paradice)
Marcus Burns
(Spheria)
Codan
(ASX: CDA)
Buy
Hold
NexGen
(ASX: NXG)
Buy
Hold
Life360
(ASX: 360)
Buy
Hold
Monadelphous
(ASX: MND)
Hold
Hold
Hub24
(ASX: HUB)
Buy
Hold
| Stock | ASX Ticker | Matt Riordan (Paradice) |
Marcus Burns (Spheria) |
| Codan | (ASX: CDA) | Buy | Hold |
| NexGen | (ASX: NXG) | Buy | Hold |
| Life360 | (ASX: 360) | Buy | Hold |
| Monadelphous | (ASX: MND) | Hold | Hold |
| Hub24 | (ASX: HUB) | Buy | Hold |
Edited transcript
Anna Dadic: Hello and welcome to Livewire's Buy Hold Sell. My name is Anna Dadic. Today's episode is all about the stocks daring to fly too close to the sun. Like the Icarus myth, they've cast off gravity and have surged to dizzying heights. But when valuation multiples defy reality and expectations demand perfection, descent back to earth can be brutal. Our guests today are here to tell us whose wings are about to melt. Joining me are Matthew Riordan from Paradice Investment Management and Marcus Burns from Spheria Asset Management.
When does a high-performing stock become overvalued?
Anna Dadic: Marcus, I'm going to start with you today. When a high-performing stock's share price runs well ahead of its current earnings, at what point does market optimism cross the line into an unsustainable valuation?
Marcus Burns: Okay, that's a good question - and one we're forever grappling with, frankly. I guess we do bottom-up valuations on stocks using cash flow forecasts out five years to try to get a sense of what something's really worth. And when they cross through that level, typically there's good news around. There's upgrades, there's competitor stories out that are positive, but you have to fall into some camp: are you fundamental, or are you momentum?
And we fundamentally believe that fundamentals matter medium to long term. So we look to sell when we get to levels that are expensive. Maybe we reduce the holding over time, but we still look to exit. When stocks get very expensive, you have to be disciplined around that because, inevitably, the laws of gravity come back to work and stocks do realise they're too expensive, and they fall.
How do you separate a true compounder from market hype?
Anna Dadic: Matt, quality businesses with structural tailwinds can trade at premium multiples for a very long time. How do you distinguish between a great compounder that deserves its premium and a stock that is simply decoupled from underlying reality?
Matt Riordan: It's another great question. I guess if you think about stock prices, ultimately it's a function of earnings—because earnings always ultimately drive stocks—and then the rating that's applied to that.
I think to the extent that we see companies that can continue to grow strongly, and in fact grow above expectations, you can get into that virtuous cycle where the earnings push up and then the ratings push up with it. But as we were talking about off-camera, unfortunately, that often can only last so long, and the trades can become quite crowded. So as long as it's in that cycle, great—but yeah, when you get past that point, that's when you have to be very wary. So yes.
Codan (ASX: CDA): Riding gold and defence tailwinds
Anna Dadic: First cab off the rank is Adelaide-based communications and metal detection manufacturer Codan. The stock has staged an impressive run. Matt, I'm going to stay with you. Buy, hold, or sell?
Matt Riordan (BUY): For us, Codan is still a buy at the moment, and I agree it's had a great run. If you look at it, it's a fantastic homegrown story. We've got two businesses in there.
The first business is metal detection, and obviously that's doing well with the high gold price at the moment—and it doesn't even need a rising gold price. Around these gold price levels, it's very attractive for people to prospect for gold.
And the second business is communications, and that's really found a place in terms of unmanned vehicles, given there's a lot of conflicts going on at the moment. They have very high-grade communications equipment which is being used.
So Codan is a stock we didn't own for the longest time, and we'd go and see them, and then six months later we'd turn around as they did another profit upgrade and go, "Well, that really looked good in hindsight." And I think as we sit here at the moment, it just continues to deliver.
The stock delivered around 70% EBIT growth last year. For the first half of this year, it's anticipated profit will more than double. And I think if you look at what's implied for the second half, it's pretty modest. So obviously there's a number of factors that could affect that—like a precipitous collapse in the gold price perhaps, or some of these conflicts winding down, all stopping at the same time. But the trends are very much in place. In terms of unmanned vehicles, the US is very much moving into that now because that's just the new face of things as we're seeing it.
Anna Dadic: Sure. Okay. Marcus, what's your call on Codan?
Marcus Burns (HOLD): Look, we're a hold on Codan, and it is a good business. I'd agree with Matt there. It's homegrown, which is great to see, with lots of R&D in the core businesses. But I guess particularly on the gold side, we worry that the gold price is somewhat cyclical. It could go through a correction at any point in time—and it has done this in the past—and demand for gold detectors could really fall off a cliff. The stock's rated pretty highly, so it's not really ready for that. So I guess we like the business, but we just have another caution around multiples and the sustainability of some of the earnings from parts of the business.
NexGen Energy (ASX: NXG): Tier-1 uranium supply meets power demand
Anna Dadic: Moving on to our next one: uranium developer NexGen Energy. Marcus, I'll stay with you. Is the uranium thematic running ahead of project execution realities? Buy, hold, or sell?
Marcus Burns (HOLD): Look, I don't think so. I mean, we don't own NexGen Energy, so I'd rate it as a hold, sort of leaning towards a buy. And the main reason there is it is a tremendous deposit.
I think the world is going back to uranium, having been in the doldrums for a long period of time. The mix of energy around the world was skewing away from uranium towards renewables. But as demand for power grows—it was growing obviously in the emerging markets, and now it's growing back in developed markets because of data centres, air conditioning, EVs, et cetera, all sucking power—you've seen that the grid is now back into growth generally across Western Europe, the US, Australia even, and demand for power is growing.
So how are you going to feed that? Are you going to go back to coal? Are you going to find more renewables, which are only intermittent? Or do you find good baseload? I think uranium makes sense as long as it's secure and safe, so I think you'll see a swing back to uranium.
NexGen is a very large deposit, very low cost, and will make a tonne of money under almost any circumstance. It's a couple of years away from producing, so they're building out the mine currently, but it's well drilled. The asset's known well, and assuming they can get up on schedule within reasonable CapEx budgets, it's probably going to make a lot of cash flow. So it's a pretty attractive asset.
Anna Dadic: What's your call on NexGen, Matt?
Matt Riordan (BUY): Yeah, so NexGen Energy is a buy for us. I think that was a great answer—once again, agree with everything there. When it comes to it, it's a tier-one project, very, very high grade. In fact, one of our colleagues was just on site recently, and it is going into production. Most likely when it does come into production, we'll see a lot of the other large deposits start to get towards end of life, so they're going into that sort of tailwind.
And on top of that, as Marcus said, energy use is increasing, and countries are looking for clean sources—which is what uranium is in terms of carbon emissions. So yeah, we've seen a good increase in the uranium price. Uranium is actually, interestingly, only a very small component of the cost for the reactors as well, so we can see scope for the price to continue to push up. So that's how we see NexGen.
Life360 (ASX: 360): Global user growth vs. subscriber churn
Life360 (ASX: 360): Global user growth vs. subscriber churn
Anna Dadic: Onto our third stock, Life360. Matt, I'm going to stay with you. The user growth is undeniable—buy, hold, or sell?
Matt Riordan (BUY): We're a buy on Life360. That's a lot of buys—it's good. They're a location services device, and they offer other services around it. They have over a hundred million users, which is quite extraordinary when you think about it.
I mean, it's interesting that Life360 has done well over a long period of time, though more recently it's actually come under some pressure. If we look at some of the factors driving that, I guess there are some concerns over a slowdown in terms of new users coming on in the US. For us, we feel the stock's just gotten too cheap. So looking through it and looking into coming results, we think the drivers will start to see pretty decent user growth, especially outside the US, which is where they're pushing at the moment. They've put some price increases through, which are really supportive, and then they're really pushing into the advertising market. So yeah, we think those are all positive factors.
One thing I will say—and this is just a sidebar—a couple of years ago they went to the US market. We advise companies we own against going to the US market. The reason for that is US investors tend to be focused merely on quarterlies, and then they just tend to pick one single factor to focus on. In this case, it's been users. So I think that move's probably been detrimental to them, as it has been to a number of other companies that have made that move. But yeah, as I say, for us, it's a buy.
Anna Dadic: Okay. I did actually hear Life360 mentioned on an American Netflix documentary.
Matt Riordan: Oh, really?
Anna Dadic: Yeah. I was a bit taken aback. There we go - Aussie homegrown name.
Marcus Burns: On the quarterly misses or something else?
Anna Dadic: It was true crime.
Marcus Burns (HOLD): Buy, hold, or sell. I'd be a holder of Life360 because, as Matt makes a good point, it has a lot of users and it's grown out of Australia. So big tick there for another Aussie company that succeeded internationally, which is not common obviously, especially in technology.
Tonnes of users, but only a very small portion pay. I guess that makes me a little bit more cautious, and I think the churn's reasonably high around the user base there. So yes, it's created a good business, and it's growing overseas still, but the penetration rate's pretty low in terms of payers. And again, multiples are pretty full. So at the right level, we'd probably revisit the stock, but we still think there's lots in the share price, even though it's pulled back a fair way.
Monadelphous (ASX: MND): Gold-standard engineering, full valuation
Anna Dadic: Okay. Onto our fourth stock, Monadelphous. It's an engineering and construction stalwart benefiting from strong mining maintenance contracts and energy transition capex. Marcus, I'll stay with you - buy, hold, or sell?
Marcus Burns (HOLD): Okay, I'll be a bit controversial here. Monadelphous is a really good company. It's really well run for a contractor—and that's not something I normally say in the same sentence, "contractor" and "well run"—but it is one of the long-term mining services companies that's performed exceptionally well through most cycles. It generates great cash flow and has a good balance sheet.
I'm talking like a buy here, but I guess I'd be a hold on Monadelphous, mainly because I think the valuation's very full on that one as well. It's had two, three, or four good years of capital spend in the resources sector, and the share price has followed up. Mining is cyclical—capex especially is cyclical. They've got a maintenance side of the business which is much more recurring, but again, it's only three- to five-year contracts depending on what they're doing—in some cases longer, but it's not infinite.
A lot's in the share price given where it is today. So good company, full marks for how they run the business; I just think a fair bit's in the share price and the cycle's largely priced in, basically.
Anna Dadic: Yeah, sure. Okay. Matt, how do you see Monadelphous?
Matt Riordan (HOLD): Monadelphous is a hold for us as well. It's interesting: that company's been the gold standard in terms of engineering and maintenance for my entire career. We actually saw them last week—just a brilliantly managed business.
But for us, they're coming off a sort of circa 50%-type growth year. The stock is reasonably expensive, and we just view this as more of a year of consolidation before they start to, I guess, push through again. So yeah, great company, but a hold for us.
HUB24 (ASX: HUB): Wealth platform flows vs. premium multiples
Anna Dadic: Onto our final stock: market-leading wealth platform HUB24 (ASX: HUB). Matt, I'm going to stay with you. Is it worth paying a premium price for market-leading execution? Buy, hold, or sell?
Matt Riordan (BUY): We think yes, so HUB24 is a buy for us. HUB24 is a platform business, and what we've seen—and this is a continuing trend—is a migration from the legacy systems, the older systems, across to HUB24, and Netwealth (ASX: NWL) has also been a beneficiary of that. It's been a very strong driver, so they just get continuing flows as clients move across to them.
That has been occurring, and more recently—once again, this stock has performed brilliantly over the years, though more recently it's come under a little pressure. The reason for that is if you look at the flows of that business, around 80% is just your everyday-type flows—that'll be superannuation, things like that—but there's around 20% that's discretionary. And what's happened with the budget has thrown just this huge spanner in the works in terms of discretionary investing.
So if you are an investor, you're sitting there thinking, "What do these changes mean? Will I change the nature of investments? Will I start to look more towards income-generating investments as opposed to capital-gaining-type investments?" And in some cases, you don't even know what vehicle to invest from with everything happening with trusts and the like.
So despite the flows continuing quite strongly, that component has actually been quite subdued. Our view is that once the legislation becomes clear, there'll be some pent-up demand, and we'll see that start to flow back. In the meantime, you are actually getting HUB24 for a pretty low multiple relative to its history, which makes it attractive to us.
Anna Dadic: Marcus, is HUB24 flying too close to the sun?
Marcus Burns (HOLD): I think to Matt's point, HUB24 has come back a fair way, so it probably was flying too close to the sun in terms of multiples. It—and the whole wealth platform sector—had had a huge run. I think the de-rating makes HUB24 and Netwealth in the sector more attractive to us as well. Look, we're a hold on HUB24, the main reason being that it's still very expensive. I think on multiples, it is growing well and it's got good cash generation, but we prefer other names in the space.
Anna Dadic: That's all we've got time for. That was an all-buys-and-holds episode—no sells. Thank you to our guests for joining us today, and thanks for watching Buy Hold Sell.
Timestamps:
00:00 – Intro
00:00 – Intro
00:35 – When does a high-performing stock become overvalued?
01:33 – How do you separate a true compounder from market hype?
02:27 – Codan (ASX: CDA)
04:40 – NexGen Energy (ASX: NXG)
07:00 – Life360 (ASX: 360)
09:22 – Monadelphous (ASX: MND)
10:58 – HUB24 (ASX: HUB)
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I'm an Investment Writer and Presenter at Livewire Markets, dedicated to creating content that makes the world of investing more accessible. With a background in story development, I enjoy distilling complex topics into engaging, impactful media that resonates with audiences.
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I'm an Investment Writer and Presenter at Livewire Markets, dedicated to creating content that makes the world of investing more accessible. With a background in story development, I enjoy distilling complex topics into engaging, impactful media...
I'm an Investment Writer and Presenter at Livewire Markets, dedicated to creating content that makes the world of investing more accessible. With a background in story development, I enjoy distilling complex topics into engaging, impactful media...
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