Leigh Travers is CEO and Managing Director of DigitalX Ltd. (ASX:DCC). Mr. Travers is Vice Chairman of the Australian Digital Commerce Association — ADCA — and Chair of the Initial Coin Offering — ICO — Industry Working Group. His newly public company enjoys a public listing in his native Australia. In his exclusive interview in the Wall Street Transcript, Mr. Travers explains the development of his company into a publicly traded blockchain technology corporation.
“DigitalX is publicly listed on Australia’s ASX, trading under the symbol DCC. And with offices in both Perth and New York, we are the leading publicly listed company offering initial coin offering corporate advisory services to a global clientele. DigitalX was initially founded in 2013 as a bitcoin mining operation by tech entrepreneurs out of Australia and the U.S. We raised $9 million to list and scale up a bitcoin mining operation that was hosted out in Iceland using geothermal power. We now provide blockchain consulting services and software development.”
The company’s strategy is to move from straight exposure to crypto-currency pricing into consulting services: “…through our corporate advisory and consulting work, we’ve continued to accrue digital assets. So we actually just posted our half yearly report, and that showed record profits of $8 million. And while it showed that the gains in our financials were due, at least in part, to a value appreciation in digital assets, just under half of those gains were from consulting and corporate advisory work. While the price of DigitalX is linked certainly to the price of bitcoin, this shows that we’re not just purely tied to what the price of bitcoin is doing, as we’re a business that’s out there consulting and advising.”
Another publicly traded blockchain technology company is run by Dominic McCann, who is CEO of BTL Group Ltd. (CVE:BTL). Mr. McCann’s career spans over 20 years in finance, industry and management consulting. His experience includes leading sales teams and building enterprises by delivering innovative technology products to market. Before joining BTL Group Ltd. in 2017, he was at SAS Institute where he oversaw a decade of new business growth and led a global team helping to establish the SAS Global Oil and Gas Business Unit across Australasia and EMEA. His company has developed a proprietary platform for corporate users looking to unlock the power of the blockchain.
“The Interbit platform is industry agnostic, meaning it’s not been built to suit just one industry; its use cases are endless as to where blockchain could be deployed. So the platform in itself enables a blockchain application to be built for any sort of business or developer challenge. For example, if you look at the current OneOffice project we are running, now having grown to nine energy companies of which five are super majors, the project represents over a trillion dollars in company revenue. This is a significant use case of Interbit blockchain, enabling the ability to reconcile and to settle massive volumes of gas trades between these organizations.”
Scott Berg, now a Senior Analyst, joined Needham & Company, LLC in 2015. Previously, he was Senior Research Analyst at Northland Capital Markets covering enterprise/application software. In his exclusive interview with the Wall Street Transcript, Mr. Berg details his current view on the enterprise software market. He is currently not too concerned about lofty stock prices in this sector:
“I’m less worried about valuations today, because while they’re certainly healthy, we know we’re not where anyone would consider to be too overvalued.”
However, exposure to the retail industry is taking its toll on the software that those retailers use:
“When I look at large vertical or industry trends, as I mentioned with SPS Commerce (NASDAQ:SPSC) earlier, any company that is a software vendor with high exposure to the retail industry I see as going to be challenged over the next two years.”
Some bright spots include companies that will reap the benefits of blockchain technology adoption.
“The closest one is a company called Amber Road (NYSE:AMBR). Their core product deals with global trade management software, and blockchain sits actually very nicely into what their products can do down the line…Amber is also going to have some very ancillary and complementary technologies with what companies like IBM (NYSE:IBM) are doing.
Read the entire interview at the Wall Street Transcript to get Scott Berg’s detailed analysis.
John DeCree is Director, Head of North America Equity/High Yield Research, New York, at Union Gaming. Mr. DeCree has spent 10 years in capital markets focusing on the casino and gaming industry. Mr. DeCree joined Union Gaming in 2014 to focus primarily on North America equity research. Prior to joining Union Gaming, Mr. DeCree served as an Equity Research Analyst at Telsey Advisory Group, covering the global gaming, lodging and leisure sectors. In his exclusive interview in the Wall Street Transcript, John DeCree details his top gaming and casino investment opportunities.
One area John DeCree does not see as a focus is online gaming: “One thing I would add to that is we have seen retailers and those types of consumer businesses get segmented between bricks and mortars, traditional retailers and online retailers with Amazon (NASDAQ:AMZN) stepping up as pretty much a competitor to everyone. We don’t really see that in the casino and gaming segment. These operators and companies are a bit insulated from the online providers, and that adds to a bullish outlook here.”
Mr. DeCree is not bullish on US online gambling: “Online gaming hasn’t really taken off yet in the United States, so we haven’t seen much of a change or impact. Right now, only four states permit online gaming, including New Jersey, Nevada, Delaware and Pennsylvania, though Pennsylvania has just authorized online gaming and has not yet awarded licenses. New Jersey is really the only market with a noteworthy online gaming industry that generates about $245 million per year. I think we’ll see more states authorize online gaming, but the digital industry in the U.S. is still in its infancy relative to Europe. With a limited sample size, we haven’t seen online gaming in New Jersey cannibalize nor revolutionize the overall industry.”
The China market has rebounded: “…the Macau gaming market is about six times the size of Las Vegas today, so it has substantially higher wealth and larger gamers going to Macau to play. The recovery in Macau has really kind of come over the last 12 months or so with increased liquidity in the VIP segment, which is the really high-end play in Macau. That is substantially higher than we have seen in Las Vegas, and that is a product of two things over the last 12 months. One, there has been a resurgence in the Chinese economy, particularly in real estate and the industrial production of Southeastern China. Also, Macau, for the two years preceding 2017, was under a little bit of a microscope for corruption crackdown from Beijing. It has cleaned out Macau and the government officials that were gambling…We are now back to of a growth cycle in Macau. Macau’s growth trajectory has been very strong throughout 2017, and that is continuing in 2018.”
Mr. DeCree sees a great opportunity for the classic Southern Nevada gambling focus:
“We have a new hockey team in town as in the Las Vegas Golden Knights, and they are actually playing spectacularly well and rejuvenating Las Vegas as a tier-1 city. It is the first professional sports team to arrive in Las Vegas. I am sure most folks have heard the Raiders will be relocating to Las Vegas with construction on the stadium set to break ground really a little bit later this year. We are just seeing billions of dollars of infrastructure being poured into Las Vegas. So as we think about the local economy there, it is quite encouraging, and that bodes well for a company like Golden Entertainment that really generates 75% of its income from the local Southern Nevada market. So that is interesting to keep an eye on as well.”
To get the complete detail on all of Mr. DeCree’s stock picks, read the entire interview in the Wall Street Transcript.
Dhruv Shringi is the Co-Founder and CEO of Yatra Online, Inc. Mr. Shringi leads the company’s business initiatives and led the company to its successful listing on the Nasdaq under the ticker YTRA, making it only the second Indian e-commerce company to be listed on this global stock exchange. Since its successful launch in January 2006, Mr. Shringi has led Yatra Online, Inc. to grow from a three-member organization to a 3,200-people-strong organization, making it the leading travel brand in the country. In 2011, Mr. Shringi was listed by Fortune magazine in the top 40 CEOs in India. In this exclusive interview with Dhruv Shringi in the Wall Street Transcript, the CEO details his business and how it will grow.
“Today we serve about 700 large corporate customers who work with Yatra for their travel needs. We have about 83,000 domestic hotels that are listed on our platform. This is the largest inventory of domestic hotels available on a single platform anywhere in India amongst all players both online and offline. On the air side, we work with all the domestic and international airlines that are operating out of India. There are six major domestic airline carriers in India and numerous airlines that serve India’s international travel needs.”
Mr. Shringi goes on to explain his competitive strategy: “We have got two sets of competitors. On the consumer direct side, there is another Nasdaq-listed entity in the form of MakeMyTrip (NASDAQ:MMYT) that is a key competitor. Whereas, on the corporate side, our competitors are companies like American Express (NYSE:AXP) and Carlson Wagonlit and a couple of homegrown players as well. Depending on the nature of the consumer, the competitor set varies.”
Some of the unique content the company develops is based on their evaluation of hotel properties in India:
“Access to the property and what kind of hygiene level the property has are common knowledge needs as well as if it safe for female staff and generally what the area it is in is like. There are numerous features about the properties including the usual features such as WiFi and dining options that we would share with customers in order to help them make choose the right hotel for their needs.”
To get the full detail on Dhruv Shringi’s strategy for Yatra Online, read the entire interview in the Wall Street Transcript.
Edward Nash is a Managing Director and Senior Analyst covering the biotechnology and life sciences sector at SunTrust Robinson Humphrey. He brings 17 years of experience from both the buy side and sell side, joining SunTrust Robinson Humphrey from Cowen and Company. Mr. Nash earned his MBA in finance and M.S. in international business from the University of Miami, as well as a Master of Public Health in epidemiology from the University of Alabama at Birmingham. In his exclusive interview with the Wall Street Transcript, Edward Nash bangs the table for biotech.
“I remain bullish on the space overall. We have several companies with important clinical and regulatory milestones occurring in 2018. There are many technology platforms that have made great advances within the clinic over the past couple of years and that have been viewed very favorable by regulators, specifically gene therapy and immune oncology. The great divide that once separated basic science from clinical reality for several technologies has narrowed dramatically. I believe that we will see this momentum continue as we progress further into 2018.”
One early market winner is picked by Mr. Nash as a winner. “Perhaps as you can already tell, gene therapy is one of my areas of focus, and I continue to be very bullish on Spark Therapeutics (NASDAQ:ONCE). With the recent FDA approval of LUXTURNA, the company will be the first U.S. biotech to make the pivot from the clinic to commercial arena. The company is also potentially paving the way for some unique approaches to reimbursement for gene therapy products. Pricing has been a big black box for all gene therapy companies. Spark has come up with some innovative approaches where we believe all stakeholders come out on top.”
Mr. Nash sees a number of new drugs coming to market in the near future, powering equity valuations. “I think this is happening more due to the new FDA Commissioner. He was a banker and analyst in the space, and is a physician, so he understands how drug development works. That is definitely something we have not seen before to this degree with a commissioner. We are definitely seeing a much more friendly FDA that wants to start early in dialoging with companies to help them navigate the process efficiently.”
To get all of Edward Nash’s current stock picks, read the entire interview in the Wall Street Transcript.
Nicole Miller Regan is a Managing Director and Senior Research Analyst at Piper Jaffray & Co., where she covers the restaurants and branded hospitality universe. Prior to joining Piper Jaffray in 2006, Ms. Miller Regan worked in equity research at ThinkEquity Partners in Minneapolis and at Sterne, Agee & Leach in New Orleans. Ms. Miller Regan was the winner of ICR’s 2012 best restaurant stock pick, and in 2006, she was ranked number-one stock picker by StarMine. In her exclusive interview with the Wall Street Transcript, Ms. Miller Regan details her current investing thesis for restaurant stocks.
“…What is your culture and food, and how you are embracing technology but not leaning on it? Then, what is your experience and interaction with the customer? It is kind of like, who has the best satisfaction scores? Those companies are winning. Somebody might say, “Oh, well, full-service casual dining is dead.” No, it is not. Darden (NYSE:DRI) is one of the best-performing stocks.”
“Darden trades anywhere from 1, 2, 3 times turn of EBITDA premium to Brinker (NYSE:EAT). Darden’s comps are positive, and Brinker’s comps are negative. Darden has a little bit more growth and wide space ahead of them than does Brinker with Chili’s. So this will be a case where we are going to actually pay out. There are going to be higher multiples, and it has worked because that stock did very well, and Brinker has just been a little bit left behind. We pick performers like a Darden.”
Jamie Cuellar, CFA, Co-Portfolio Manager, joined Kornitzer Capital Management in 2015 and has 26 years of professional investment experience. At the Buffalo Funds, he works with equity portfolios, and his focus areas include technology and consumer. From 2012 to 2014, he worked at Northern Trust as a Senior Portfolio Manager. In this exclusive interview with the Wall Street Transcript, Mr. Cuellar gives a detailed analysis of his equity selections.
Mr. Cuellar also explains the structure of the fund family. “We are headquartered in Mission, Kansas, which is a suburb just south of Kansas City. We manage about $7 billion in total firm AUM as of the end of last year, and that is made up about $4.5 billion of mutual funds and another $2.5 billion of separate accounts and wealth management assets. We manage 10 strategies in total.”
One of the top picks for Mr. Cuellar operates in a politically charged sector. “Again, this fits in our trend of outsourcing. It’s been the tougher stock for us, but it’s one we still believe in quite a bit. CoreCivic (NYSE:CXW) is a private prison operator. I think they’ve kind of underperformed because it’s a REIT ,and with increased interest rates, people have been really rotating somewhat away from REITs. But I think they’re in the early stages of a cyclical upturn as the current presidential administration is a lot tougher on crime than what we had in the prior eight years…Also, detention policy is very cyclical; we are on a cyclical upswing.”
Michael Waring founded Galileo Global Equity Advisors in 2000 and has served as the firm’s Chief Executive Officer since its inception. The Portfolio Manager for the Galileo High Income Plus Fund and the Galileo Growth and Income Fund, he is among Canada’s most experienced small- and mid-cap equities portfolio managers. Before founding Galileo in 2000, Mr. Waring was Vice President, Director and Portfolio Manager for KBSH Capital Management Inc. from 1985 to 1999. He is a CFA charterholder and member of the Toronto CFA Society, and holds an MBA from the University of Western Ontario. A committed philanthropist, Mr. Waring founded Kids In Class, a registered charity that builds schools and provides financial support to children and their families in developing countries.
Michael Waring describe his stockpicking philosophy as he develops an interesting and valuable portfolio in his exclusive interview with the Wall Street Transcript.
“We’ve always maintained a small/midcap bias. We look for growth and some income in the funds. Our largest fund, which is the High Income Fund, we think of it as we are hunting for 60% return from dividends and 40% from capital gains. In other words, we want to find companies that are in a position to grow the dividend over time. So obviously, cash flow and the balance sheet are very important to us. We like to see a rising dividend and some capital appreciation over the holding period.”
“The first one I want to mention is a real estate investment trust. The full name of the company is WPT Industrial Real Estate (TSE:WIR.U). The stock is currently trading at $12.85, and it has a 5.9% yield. What’s interesting right off the top is this company trades in Toronto, but it trades in U.S. dollars, and it pays a U.S.-dollar dividend, so that $12.85 is in U.S. dollars. The market cap of this company is $619 million in USD…The company’s asset base is 100% in the United States of America.”
“The second one, a very interesting name, is Polaris Infrastructure Inc. (TSE:PIF). Today it’s trading at $19.40, and it has a yield of 3.8%. It trades in Canadian dollars; dividend is paid in U.S. dollars…a geothermal operation in Nicaragua. They have 11 production wells that produce a combination of steam and hot brine that is used to drive generating turbines. The current steam can produce, in terms of power capacity, approximately 60 to 65 megawatts, while the power purchase agreement they have with the Nicaraguan government is for 72 net megawatts through to 2029. This company is currently generating about 15% of the electricity that is in the Nicaraguan grid.The company, interestingly enough, only began paying a dividend in the second quarter of 2016. But since that time, it’s raised it four times already. ”
To see all of Michael Waring’s current picks, read the entire interview in the Wall Street Transcript.
J. Jeffrey Auxier is President of Auxier Asset Management LLC and Founder of the Auxier Focus Fund. Prior to forming Auxier Asset Management in 1998, Mr. Auxier spent 16 years at Smith Barney — formerly Foster Marshall-American Express, then Shearson — where he was on the Portfolio Management Advisory Board and the Chairman’s Council, and was Senior Vice President of Investments and Senior Portfolio Management Director. In his exclusive interview with the Wall Street Transcript, Mr. Auxier details his current portfolio strategy.
“A company like Medtronic (NYSE:MDT) is very vulnerable, I think, to actually going private or restructuring, and that’s again because of the high free cash flow yield, especially when rates are starting to turn up. A lot of companies that are dependent on the credit markets, those companies become more vulnerable, and so that’s another reason we like these high-free-cash-flow, high-quality companies, especially at this stage of a recovery, if we — as we get later into a recovery, quality should start to happen. It’s not right now. I mean, right now, it’s been more of a cyclical-driven recovery.”
Some values are going to be recognized in the near term.
“…We still like Bank of New York (NYSE:BK) and CEO Charles Scharf… this is more of a processor bank, 13 times, 14 times earnings, pretty dull. It’s not a spread lender, but there’s been a lot of waste in the company, so we think just cleaning that up will lead to improved earnings. But it’s much more stable than a spread lender, and you don’t have the same kind of risk in terms of nonperformers. But Charles Scharf is very focused on technology and did a great job at Visa (NYSE:V). Obviously, Visa is a really good model. Visa has gone I think from $16, where we bought it, to $123.”
“…We think it’s really important, especially after good markets, you typically have top markets like the Dow in 1964 was 864, by 1981 it was 865. So that was a period where you really had to pick your companies and buy right and actually sell into euphoria. So we think investing is the craft of the specific.”
Read the entire interview with J. Jeffrey Auxier to get all the specific stocks he wants to own.
Gbola Amusa is a Partner, Director of Research and Head of Healthcare Research of Chardan. Dr. Gbola Amusa joined Chardan at the end of 2014 to focus on identifying companies that will generate exceptionally high long-term investment returns by creating shared value for society. Dr. Amusa was previously Managing Director, Head of European Pharma Research, and Global Pharma and Biotech Coordinator at UBS, where he oversaw 25 analysts and ultimately finished as the number-one-ranked European pharma analyst in the Institutional Investor — II — Survey. Prior to UBS, Dr. Amusa was a Senior Research Analyst and Head of European Pharma research at Sanford Bernstein. He started his career in finance at Goldman Sachs as an associate in the Healthcare Investment Banking Group, where he worked on large transactions including the Amgen/Immunex merger.
In his exclusive interview with the Wall Street Transcript, Dr. Amusa details his research into the companies at the cutting edge of genetic medicines research.
“We also think this space is interesting because there is less guesswork involved than with other types of drug and therapeutic development. If we know the cause of a disease and can design, rather than guess, at a solution for it, then the chance for a breakthrough is actually much, much higher. ”
The upside for these medical treatments is enormous, both financially and for the welfare of patients.
“The promise for new genetic medicines, including gene editing, is they can offer durable solutions or even cures for some of the hardest-to-treat diseases in human history. Genetic diseases are also known for, at times, causing very early mortality. So if you have a durable solution that gets to the root cause of the disease, you can offer the potential for an actual cure that gives, for example, an infant patient a chance at life.”
The publicly traded companies developing these technologies have become rare assets that may be prime targets for acquisition.
“These technologies may, therefore, be scarce assets that trade on an M&A premium because one would imagine that all the big-cap players who are interested in gene editing and, certainly ones that are interested in oncology applications, may be interested in a quick way to get this technology. An acquisition is a historic way to do this. For many people right now, the question is less about who is the best here and more about which company has the right conditions to be bought. But obviously, technology feeds into that consideration. So in the CRISPR space specifically, there are just four companies.”
To get the complete detail from Gbola Amusa on which public companies are ripe for the plucking, read the entire interview in the Wall Street Transcript.