The Dynamic Investor - 31 October 2023

INTRODUCTION 31 OCTOBER 2023 P.
INTRODUCTION
Share markets have had another negative week as they entered that fearful stage where all news is bad
news. The war in the Middle East is taking centre stage, but strong GDP numbers out of the US have
markets worried that rates won't be coming down soon. This is despite bond yields actually moving lower
in the past several days. Generally, a strong economy leads to higher share prices - we just have to ignore
the daily noise. We remain at that stage where we are looking for signs of a bounce as most of the damage
at the index level has been done.
This week's report has an updated chart of the S&P500 Index. Locally, resources continue to hold in well
and remain our favourite sector. It’s not just gold, but iron ore stocks have bucked the trend too. Other charts
this week include BHP Group (BHP), Fortescue Metals Group (FMG), and Regis Resources (RRL). Finally,
we have spotted a potential turnaround in a very interest rate sensitive stock, Goodman Group (GMG), and
we highlight how that chart is looking also. In terms of fundamental analysis, we have looked at McMillan
Shakespeare (MMS) and Nick Scali (NCK).
TABLE OF CONTENTS
INTRODUCTION ........................................................................................................................ 1
FUNDAMENTAL & TECHNICAL ANALYSIS .............................................................................. 2
NICK SCALI (NCK) ................................................................................................................................... 2
MCMILLAN SHAKESPEARE (MMS) ........................................................................................................ 9
CHARTING ............................................................................................................................... 17
BHP GROUP (BHP) ................................................................................................................................ 17
FORTESCUE METALS GROUP (FMG) ................................................................................................. 18
GOODMAN GROUP (GMG) ................................................................................................................... 19
REGIS RESOURCES (RRL)................................................................................................................... 20
S&P 500 INDEX (SP500) ........................................................................................................................ 21
LARGEST TRADED VOLUMES ............................................................................................... 22
CONTENT & MEDIA ................................................................................................................. 24
IMPORTANT LINKS ................................................................................................................. 24
ABOUT US ............................................................................................................................... 25
DISCLAIMER............................................................................................................................ 26
FUNDAMENTAL & TECH. ANALYSIS 31 OCTOBER 2023 P.2
FUNDAMENTAL & TECHNICAL ANALYSIS

NICK SCALI (NCK) NEUTRAL
CURRENT BROKER RECOMMENDATIONS*
Last share price $10.87 (Number of Brokers per recommendation)
Market Cap (A$) 880.5M Buy/Outperform 2
Return on Equity 37.2% Hold/Neutral 0
12 month forward PE 12.0x Sell/Underperform 0
1 year EPS growth -27.5% Average consensus target $12.97
Div Yield 4.6% Consensus target return 19.3%
COMPANY OVERVIEW
Figure 1 Overview of NCK Store Network (Source: Company Reports)
Nick Scali (NCK) is an Australian retailer and

importer of furniture, specialising in quality leather
and fabric lounges, dining rooms, bedrooms and
occasional furniture. The Company has stores
located across Australia under the core brand,
Nick Scali and Plush, a brand acquired in October
2021.
Plush is positioned as a mid-market, made-to-

order sofa retailer with a focus on the aspirational
customer. Plush a highly complementary
business, with similar inventory and working
capital profiles, and the Company has taken dual-
brand strategy targeting a broader customer
demographic.
RECENT TRADING UPDATE
Profit Guidance
In a trading update issued to the ASX at its recent

AGM on 19 October, NCK provided Net Profit
After Tax (NPAT) guidance of $40.0-$42.0m for
the six months to 31 December 2023 (1H24).
While this represents a 33.5% decline on the prior corresponding period (1H23), the NPAT guidance was actually ~7%
ahead of consensus estimates prior to the issued guidance. It is also worth noting that the 1H23 period benefited from
a significant unwind of the order book (which released significant additional revenue).
In terms of the key drivers underpinning the 1H24 guidance, written sales orders and conversion rates have both
improved. However, gross profit margin (GPM) appears to have weakened due to increased promotional activity.
We discuss these factors in further detail below.
Written Sales Orders
Written sales orders in FY23 declined by -7.8%, to $437m, with the decline weighted towards 2H23. At the FY23 results
release in August 2023, the Company commented that while trading was volatile in 2H23, written sales orders began
to improve in June 2023.
Figure 2 Recent Trend in Written Sales Orders ($m) (Source: Fairmont Equities, Company Reports)
At the trading update, NCK noted that written sales orders for the September 2023 quarter were down by -5.4%
compared to the prior corresponding period. This represents an improvement on the -8% decline in written sales orders
in July 2023. The decline in written sales orders is spread across both the Nick Scali and Plush brands and is likely a
function of weakness in the housing market, where the household savings rate has fallen from ~20% during COVID to
~3.7% (according to the most recent figures), as well as a 10-15% decline in store traffic.
The rollout of further new stores over the short-to-medium term is expected to continue to act as a mitigating factor
against declining written sales orders. NZ is a key region for planned additional stores. The Company currently have a
store footprint of five Nick Scali stores in NZ and are targeting 13 in total. Additional stores in NZ are expected come
from the rollout of Plush (with management targeting 5-10 stores) given that it is a smaller store footprint relative to Nick
Scali, making it easier to find appropriate locations for potential stores.
On a like-for-like basis (excluding new stores) group written sales orders were down -6.7%. We have assumed a similar
rate of decline in like-for-like written sales orders for the full 1H24 period, based on:
i. Continued pressure on consumer discretionary spending.

ii. The order bank has now largely unwound, with the biggest impact in 1H23. Having said that, longer shipping
times may also artificially inflate the Order Bank profile in 1H24.
However, the decline in written sales orders for 1H24 is likely to be offset to some degree by new store openings 1,
which are expected to contribute growth of ~2%.
Figure 3 Order Bank ($m) Has Largely Unwound (Source: Fairmont Equities, Company Reports)
Improved Conversion Rates
While store traffic was down 10-15% in 1Q24, management note the store conversion rates have improved, driven by
better value offerings for both Nick Scali and Plush. Importantly, the, increased conversion rates imply market share
gains and strong early success with the Plush brand. This view is based on Australian Bureau of Statistics retail sales
figures for Furniture, floor coverings, houseware and textile goods declining by -8.2% on average in July and August
2023 (on a year-on-year basis), which is significantly worse than NCK’s like-for-like written sales order decline of -6.7%.
1
NCK expect to add one new Nick Scali store and three new Plush stores in 1H24.
Figure 4 Australia Household Consumption & Savings Rate (Source: ABS, RBA)
GROSS PROFIT MARGIN
NCK reported a GPM of 63.5% for FY23, an increase of 250 basis points. Compositionally, Nick Scali brand delivered
a GPM of 63.7% and Plush’s GPM improved to 62.7%, driven by further acquisition synergies including combined group
product sourcing, and reduced group freight costs.
The Company operates a 100% direct import model (with all products sourced from Asia), which allows NCK to achieve
GPM >60% - over the long-term irrespective of unfavourable currency movements - as it avoids wholesalers and
importers.
The Company has a longer-term GPM target of 62-63%. While increased store conversion rates is likely to have come
at the expense of some GPM, the outlook for the latter is supported by: i) Greater volume through the supply chain from
the acquisition and rationalisation of Plush suppliers, ii) Further growth in the store network and iii) Further incremental
reduction in group freight costs.
Figure 5 Gross Profit Margin to Remain Above Long-Term Target Range (Source: Fairmont Equities, Company Reports)
STRONG BALANCE SHEET PROVIDES SCOPE FOR FURTHER MERGERS & ACQUISITIONS
The balance sheet turned from net cash to a net debt position in 1H22, following the acquisition of Plush for $101m,
which was funded by cash and debt facilities.
As at 30 June 2023, the balance sheet held a small amount of net debt ($2.4m), which equates to a negligible gearing
position (on a net debt to EBITDA basis). In addition, the balance sheet is supported by $104.5m of land and buildings
at cost as at 30 June 2023. The Company owns the property for 11 stores2 and as the majority of these properties (by
book value) were purchased prior to calendar year 2017, the future value of these properties is estimated to be well in
excess of book value. Property acquisitions remain a key focus for management, given that a number of lease renewals
expected in the next few years.
An improving cash position (NCK typically generates strong cashflow and operates a minimal working capital business
model) has allowed the partial repayment of a corporate debt facility and the low gearing level provides scope for further
merger & acquisition opportunities. To this end, NCK is looking at both domestic and overseas opportunities, with
acquisition multiples for potential targets still considered appealing.
2
The most recent purchase was in December 2022, when the Company completed the acquisition of undeveloped land in Crestmead
(Queensland) for the construction of a new Brisbane Distribution Centre. Construction is due to complete in 2H24.
Figure 6 Summary of Property Holdings (Source: Fairmont Equities, Company Reports)
Figure 7 Free Cashflow ($m) Supported by Capital Light Business Model (Source: Fairmont Equities, Company Reports)
INVESTMENT VIEW
NCK shares are currently trading on a 1-year forward P/E multiple of ~12x having de-rated ~14x following the release
of FY23 results in August. While appearing to present value at current levels, we take a NEUTRAL view, as we consider
that there is downside earnings risk from:
i. A lack of visibility on written sales orders, notwithstanding the improving trend evident in 1H24 to date.
ii. Potential for near-term pressure on GPM, given, firstly, limited further synergies from the Plush acquisition
(which was the main factor underpinning GPM expansion in FY23). Secondly, while improved store conversion
rates have likely led to market share gains, this may come at the expense of GPM, given an increased level
of promotional activity in light of still-challenging conditions for discretionary spending and the potential for
consumers to trade down.
CHART VIEW – NICK SCALI
After pulling back in September - October, NCK bounced well off support at $10. The past few days has seen it
consolidate in preparation of the next move. It needs to take out the October high near $11.22 (blue line) for the chart
to turn bullish. A break under $10 would be a negative. In the meantime, we need to wait and see which direction it
wishes to take.
Figure 8 NCK daily share price chart
Nearest Resistance: ~$11.22 Nearest Support: ~$10.00

MCMILLAN SHAKESPEARE (MMS) POSITIVE

Market Cap (A$) 1.17B Buy/Outperform 3
Return on equity 56.2% Hold/Neutral 1
1 year EPS growth 21.9% Average consensus target $21.43
COMPANY OVERVIEW
McMillan Shakespeare (MMS) is a market-leading provider of salary packaging, novated leasing, NDIS plan
management, asset management and related financial products and services. Following a simplification of the business
portfolio, the Company’s operations now comprise three segments: Group Remuneration Services (GRS), Asset
Management (which comprises operations in Australia & UK) and Plan & Support Services (PSS). The GRS segment,
whose primary offering is salary packaging and novated leases, remains the main earnings driver.
Figure 9 Revenue and EBITDA by Segment (Source: Fairmont Equities, Company Reports)
GRS SEGMENT
During FY23, the GRS segment

benefited from customer growth,
higher yields from the increased take-
up of Electric Vehicles (EV)
(introduction of the Electric Car
Discount Policy3) and benefits of rising
interest rates.
Novated lease units increased +3.6%

to a record 73,400. Ongoing
constraints and elevated order levels
resulted in continued growth of
novated lease orders carryover.
3
In November 2022, the Federal Government legislated the Electric Car Discount bill, which provides Fringe Benefits Tax (FBT)
exemptions for benefits related to electric cars. Via salary sacrifice arrangements (novated lease), employees will effectively be able
to run the cost of the novated lease (including running costs) on a pre-tax basis and not incur FBT.
Figure 10 Trend in Key Metrics for GRS Segment (Source: Fairmont Equities, Company Reports)
The strong momentum in novated lease growth continued in the three months to 30 September 2023 (1Q24). Novated
sales increased 28% in 1Q24 (compared to the prior corresponding period), with the growth led by EVs. The latter
comprised ~36% of new novated lease sales in 1Q24, up from 21.4% in June 2023. In context, the novated lease
market is estimated to account for ~12% of total new vehicles sold.
Revenue for the GRS segment in 1Q24 increased by 29%, largely due to a 28% increase in sales volume.
The increased take-up of electric vehicles underpins expectations for further novated lease volume growth. Notably,
EV availability in Australia remains limited, with only ~37 passenger and SUV models available, of which 21 are below
the LCT 4 threshold. While OEMs will continue to direct production to other international markets which have fuel
efficiency standards, Australia is expected to see ~22 new models below the LCT threshold released by the end of
2024. In context, it is estimated that ~85% of EVs sold have been below the LCT threshold.
4
To be eligible for the FBT exemption, the electric car's value as at the first retail sale must be below the fuel-efficient vehicles' Luxury
Car Tax (LCT) threshold, being $89,332 in the 2023/24 income year, and in any subsequent sale.
Figure 11 EV Portion of MMS’ Novated Lease Orders (Source: Fairmont Equities, Company Reports)
Figure 12 Overview of Growth Opportunity from EVs (Source: Company Reports)

South Australia Novated Lease Contract Risk
MMS (via its wholly-owned subsidiary Maxxia) commenced as sole external provider of salary packaging administration
and novated leasing services to the South Australian (SA) Government on 1 July 2012. Its current contract with the SA
Government came into effect from 30 June 2018. The contract term was for five years, however, in June 2023, the SA
Government extended the term of the contract to 30 June 2024 in order to allow a more thorough review of submitted
tenders. While no timing on the announcement of the contract has been set, it is worth noting that in the event that the
contract was to transition, the SA government would need to make a decision by January 2024.
The outcome has been a key overhang on the share price. In terms of the potential outcomes, we highlight three
scenarios:
Scenario 1: MMS Retains Contract in Sole Capacity
In the event that MMS maintains the contract in its current form, the administration fee associated with the contract
could be reduced by at least ~40%. However, while there is likely to be a sharper pricing and margin impact, the ultimate
earnings revisions should be relatively minor at group level and be a one-off rebasing.
It is likely that the retention of the contract in sole capacity would be well received by the market, as this is likely to
reverse some of the overhang. In addition, retaining the contract after extensive due diligence by the SA Government
also implies that MMS’ offering has a degree of differentiation (especially regarding technology) relative to its
competitors.
Scenario 2: MMS Retains Contract in a Panel Capacity
Under this scenario, the SA Government chooses another provider, in addition to MMS. As per Scenario 1, the ultimate
earnings revisions should be relatively minor at group level and likely a one-off rebasing, with growth off a reset base.
Scenario 3: MMS Loses Contract
Clearly the worst-case scenario. In context, MMS has only one contract accounting for 10% or more of revenue for the
GRS segment. It is not the SA Government contract, but if we were to assume that the SA Government contract
accounts for ~8-9% of GRS revenue, then a contract loss would reduce FY25 EBITDA estimates by ~5-6% for the GRS
segment, and by ~4-5% for group EBITDA.
Earnings & Margin Outlook
Excluding any potential benefit/impact from the outcome of the South Australian Government contract, EBITDA for the
GRS segment is expected to grow at low double-digit rates over FY23-26 on a CAGR basis, as demand for EVs
increases due to factors such as:
i. Increased carryover revenue despite sales growing faster than orders (i.e. the absolute number of orders is
larger than sales).
ii. Increased interest for corporate clients,
iii. The release of additional EV models, and
iv. An increasing proportion of consumers who have, or would consider, using a novated lease to purchase an
EV.
Excluding the impact from increased interest revenue, which is 100% margin revenue, EBITDA margin for the GRS
segment contracted by ~340 basis points in FY23. This decline was due to an increase in operating costs, which were
driven by wage pressures (in particular, a 5.1% increase from Fair Work Commission (FWC) plus 0.5% super increase),
additional head count, elevated costs for carryover orders, and investment in technology and cyber security. With a
5.7% FWC increase from 1 July 2023 and 0.5% increase to super, EBTIDA margin for the GRS segment in FY24 is
expected to remain subdued before benefits of increased volume and utilisation of additional headcount flow through.
Over the medium-term, group EBITDA margin is likely to benefit from technology and investment in automation. MMS
is looking to invest ~$35m over FY23-25 in programs including customer self-serve facilities, app development,
automation, and expanding offering to smaller organisations, particularly in the corporate sector to capture more of the
EV offering. Benefits of the program are expected to be delivered in FY26+.
Figure 13 Medium Term Outlook for Group EBITDA Margin (Source: Fairmont Equities, Company Reports)
PSS SEGMENT
By way of background, MMS purchased Plan Partners (fully owned by MMS from 30 June 2020), which specialises in
providing financial-plan management and support coordination to people with a disability who are participating in the
National Disability Insurance Scheme (NDIS). The Company then purchased Plan Tracker on 1 July 2021 (a business
focussed on regional NSW). These two businesses combined, which were previously part of the GRS segment, now
comprise the Plan & Support Services (PSS) segment.
In FY23, the PSS segment reported revenue and underlying profit growth of +17.7% and +21.3%, respectively. These
metrics were supported by a +23% increase in the number of plan management and support coordination customers
and a +21.5% increase in support coordination billable hours.
In the absence of potential merger & acquisition (M&A) opportunities (discussed in further detail below), the PSS
segment has been able to grow customers organically5. Further, MMS completed the integration of Plan Tracker which
along with leverage benefits and cost management have led to a fall in operating expenditure and, in turn, has helped
lift EBITDA margins to 29.4% in the 2H23. There is potential for the PSS segment to generate margins above 30%,
however this is expected to be achieved over time, as MMS scales and invests in automation efficiencies.
BALANCE SHEET FLEXIBILITY TO PURSUE MERGERS & ACQUISITIONS
MMS has balance sheet capacity that could support capital management and/or acquisitions, especially in the GRS
and PSS segments. As at 30 June 2023, the net cash balance was $28m, with gearing (on a Net Debt to EBITDA basis)
of 1.1x, which is higher than the gearing level in recent period but still well below its recent peak of 2.5x as at 31
December 2019.
Other balance sheet metrics remain solid. Firstly, interest cover remains high (17x). Secondly, MMS has a diverse
source of on- and off-balance sheet funding from major banks in Australia than enable the Company to manage higher
gearing levels. Further, balance sheet debt is fully backed by fleet assets and gearing is within covenant levels.
MMS are still looking for the right inorganic opportunities in PSS but the market for meaningful acquisitions is shrinking,
following competitors acquiring another two of the larger plan managers. The outcome of the current review into the
NDIS could be a catalyst for MMS to increase its M&A activity.
5
All of the +23% increase in customer numbers reported above was organic.
Figure 14 Balance Sheet Metrics (Source: Fairmont Equities, Company Reports)
INVESTMENT VIEW
The shares are currently trading on a 1-year forward P/E multiple of ~13.5x, which is broadly in line with the long-term
average multiple, but well below recent levels. We do not consider the current multiple to be demanding in the context
of an EPS growth profile of +10% over FY23-26 on a CAGR basis, especially given the potential upside risk to EPS
growth forecasts over this period from a stronger-than-expected take-up of EVs and EPS-accretive acquisitions.
A key risk to our view is an adverse outcome on the SA Government contract, but having said that, a positive outcome
could well be a near-term catalyst. Either way, we are not taking a view on the probability of either outcome, and have
formed our investment view purely on the fundamentals.
CHART VIEW – MCMILLAN SHAKESPEARE
MMS spent the first half of the year trending nicely, then in August, it spiked higher only to be sold down sharply again
the next day. That was a clear negative and it led to a pullback in the share price. However, last week we saw a strong
jump higher on good volumes. The shares then consolidated sideways instead of falling sharply. This price action is
very positive and it implies that a low is in place for now and that MMS should start to trend higher again. Current prices
are a buying opportunity.
Figure 15 MMS daily share price chart

CHARTING 31 OCTOBER 2023 P.17
CHARTING
A TECHNICAL ANALYST’S VIEW
BHP GROUP (BHP) POSITIVE

Div Yield 6.1% Consensus target return -0.5%
Our previous comment on BHP was at the end of September, where it was bouncing off the bottom end of the recent
trading range. We continue to see the trading range tighten up into the trend-line that has been in place since the 2021
lows. The chart is looking more and more bullish and is setting itself up for an upside break and a strong rally. Current
levels remain a buying opportunity with a weekly close above $46 being an opportunity to add to positions.
Figure 16 BHP weekly share price chart

FORTESCUE METALS GROUP (FMG) POSITIVE

Div Yield 8.4% Consensus target return -20.2%
We last looked at FMG on 12 September and noted the latest buying opportunity off the bottom of the range. However,
we have analysed FMG over the course of the year, highlighting the very clear resistance level near $23. With FMG
now putting in a double bottom (arrows) and pushing higher against a weaker market, the chart is looking more and
more positive here and it is set to once again test that $23 area. A weekly close above $23 is the next buy signal as
that breakout should lead to a rally to new highs. Traders, however, may wish to take profits up near $23 and then wait
for a clear break before buying back in.
Figure 17 FMG weekly share price chart

GOODMAN GROUP (GMG) POSITIVE

The recent decline in GMG saw it fall back under the old breakout zone near $21. However, the previous major level
was the August low near $19.75. Yesterday, it traded near that low only to end the day much higher. Yesterday's
formation of a bullish engulfing candle (circled) is a reversal signal and a buy trigger. We have also seen a buy trigger
on the daily RSI. The stock may find some short-term resistance near $21, but a push beyond that should see it try to
retest the October peak near $22.50.
Figure 18 GMG daily share price chart

REGIS RESOURCES (RRL) POSITIVE

Return on equity (FY25) 4.6% Hold/Neutral 1
PE (FY25) 11.3x Sell/Underperform 1
1 year EPS growth N/A Average consensus target $1.92
Div Yield 0% Consensus target return 10.7%
RRL appears to have put in a low and is now starting a new uptrend. It broke above resistance near $1.63 on good
volume and has been trading well since then. Current levels remain a buying opportunity. The next major resistance
zone is just above $2.00. Initial stops can be considered under $1.63.
Figure 19 RRL daily share price chart

S&P 500 INDEX (SP500) NEUTRAL

Last Close: 4,166.82
In our charting analysis last week, we noted that "a strong bounce here would be positive with a break above 4400
adding to the bullish case. Further weakness from here will have us targeting support near 4100 before reassessing."
We can see that the S&P 500 Index took the path of weakness and managed to find the support level near 4100. This
is precisely where it bounced last night. The index is at major trend-line support now as we reassess what it could do
from here. A push above 4200 would start to look more positive for the index, but 4300 is the nearest major level that
we need to see the index overcome. A weak close below 4100 would be a negative sign and that could then have us
targeting 3800 as the next support level.
Figure 20 SP500 weekly share price chart
Nearest Resistance: ~4,300 Nearest Support: ~4,100

LARGEST TRADED VOLUMES 31 OCTOBER 2023 P.22
LARGEST TRADED VOLUMES

These tables look at the volume of shares traded last week and compares it to the 52-week average for each stock. We then
rank the stocks from the largest percentage change. An unusual amount of volume traded can alert investors to significant
moves such as reversals or breakouts.
S&P/ASX 200
Rank Stock Stock Name 52-week Last week’s Percentage

Code Average volume Difference (%)
1 SYR SYRAH RESOURCES 23,132,130 180,421,888 680
2 REG REGIS HEALTHCARE LTD 1,808,231 4,036,371 123
3 RMD RESMED INC 8,982,245 17,993,686 100
4 NUF NUFARM LIMITED 4,821,361 9,566,111 98
5 IVC INVOCARE LIMITED 1,766,600 3,268,338 85
6 CGC COSTA GROUP 8,032,122 13,953,036 74
7 CCP CREDIT CORP GROUP 1,120,784 1,901,636 70
8 GUD G.U.D. HOLDINGS 1,833,884 2,964,408 62
9 ORA ORORA LIMITED 14,506,686 23,427,740 61
10 MMS MCMILLAN SHAKESPEARE 1,162,697 1,785,598 54
11 AWC ALUMINA LIMITED 42,078,128 64,983,084 54
12 BXB BRAMBLES LIMITED 17,440,714 26,817,514 54
13 GOZ GROWTHPOINT PROPERTY 3,605,570 5,486,809 52
14 GEM G8 EDUCATION LIMITED 6,133,862 9,190,920 50
15 NWS NEWS CORP 854,408 1,215,954 42
16 WOW WOOLWORTHS LIMITED 9,190,730 13,002,376 41
17 APA APA GROUP 11,359,431 15,876,869 40
18 MFG MAGELLAN FIN GRP LTD 5,684,895 7,869,441 38
19 SUL SUPER RET REP LTD 3,642,704 4,968,977 36
20 NST NORTHERN STAR 23,883,730 32,396,404 36
LARGEST TRADED VOLUMES 31 OCTOBER 2023 P.23
ASX ALL ORDINARIES
Rank Stock Stock Name 52-week Last week’s Percentage

Code Average volume Difference (%)
1 SYR SYRAH RESOURCES 23,132,130 180,421,888 680
2 AVJ AVJENNINGS LIMITED 357,637 1,767,456 394
3 AMA AMA GROUP LIMITED 22,477,928 68,643,280 205
4 RCR RINCOR RESOURCES 739,760 2,174,056 194
5 FND FINDERS RESOURCES 199,958 549,637 175
6 IMD IMDEX LIMITED 5,872,508 14,819,564 152
7 REG REGIS HEALTHCARE LTD 1,808,231 4,036,371 123
8 DCN DACIAN GOLD LTD 2,891,736 6,359,111 120
9 RMD RESMED INC 8,982,245 17,993,686 100
10 NUF NUFARM LIMITED 4,821,361 9,566,111 98
11 HLO HELLOWORLD LTD 2,808,032 5,297,621 89
12 IVC INVOCARE LIMITED 1,766,600 3,268,338 85
13 CGC COSTA GROUP 8,032,122 13,953,036 74
14 CCP CREDIT CORP GROUP 1,120,784 1,901,636 70
15 RFX REDFLOW LIMITED 1,234,004 2,024,657 64
16 DCG DECMIL GROUP LIMITED 612,509 997,532 63
17 GUD G.U.D. HOLDINGS 1,833,884 2,964,408 62
18 ORA ORORA LIMITED 14,506,686 23,427,740 61
19 LYC LYNAS CORPORATION 22,273,112 35,430,312 59
20 EZL EUROZ LIMITED 376,453 579,440 54
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ABOUT US 31 OCTOBER 2023 P.25
ABOUT US
Fairmont Equities
Fairmont Equities is a boutique share advisory firm assisting Private Clients with the professional management of their share
portfolio. We uniquely combine both technical and fundamental analysis. We are based in the Sydney CBD but provide
services to private clients across Australia.
Michael Gable (Managing Director)
Michael is the Managing Director and founder of Fairmont Equities. He has over 15 years’ experience in Financial Services.
Michael believes that investors can do better by combining both technical and fundamental analysis. After realising that there
was a gap in the industry for this type of advice, Michael founded Fairmont Equities in 2013.
His specialty is in technical analysis. He uses these skills to help clients pick the right entry and exit points.
Michael is RG146 Accredited and holds the following formal qualifications:
➢ Bachelor of Engineering, Hons. (University of Sydney)
➢ Bachelor of Commerce (University of Sydney)
➢ Diploma of Mortgage Lending (Finsia)
➢ Diploma of Financial Services [Financial Planning] (Finsia)
➢ Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
Gordon Anderson (Portfolio Manager)
Gordon's career began trading futures and options at the Commonwealth Bank in Sydney before moving to Asia where he
was an institutional equity portfolio strategist with Morgan Stanley. He returned to Australia to manage the equity long/short
investment strategy at hedge fund Basis Capital across all Asian markets including Japan, before leading global macro trading
teams at one of South Africa’s largest banks, Rand Merchant Bank and Visor Capital in Kazakhstan, responsible for
discretionary macro investments across global equity, bond, commodity and currency markets. More recently, Gordon returned
to Morgan Stanley, where he was responsible for portfolio strategy in equity and fixed income markets, asset allocation, and
advised high net worth clients and family offices on international and derivative investments.
Gordon is RG146 Accredited and holds the following qualifications:

➢ Bachelor of Economics [Distinction] – (Western Sydney University)
➢ Bachelor of Applied Science [Physics] – (Western Sydney University)
John Haddad (Equities Analyst)
John is the Equities Analyst at Fairmont Equities and has extensive experience as an Equities Analyst, having held Analyst
roles in funds management, stockbroking (institutional and high-net-worth clients) and within Financial Advisory groups. John
has covered stocks across a broad range of sectors and provides clients with a sound fundamental view in his written research.
John holds the following formal qualifications:

➢ Bachelor of Commerce (Economics & Finance), University of Western Sydney
➢ Master of Commerce (Banking & Finance), University of NSW
DISCLAIMER 31 OCTOBER 2023 P.26
DISCLAIMER
Fairmont Equities Australia Pty Ltd (ACN 615 592 802) is an AFSL holder (No. 494022).
The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities
reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or
investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of
future performance.
No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report,
but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such
action. Fairmont Equities, its directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of
the information contained in the report.
* All share price charts are courtesy of AmiBroker, unless stated otherwise.
* All current broker recommendations, forecasts and share price targets are sourced from FNArena (www.fnarena.com).

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The Dynamic Investor - 31 October 2023

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INTRODUCTION 31 OCTOBER 2023 P.

FUNDAMENTAL & TECHNICAL ANALYSIS

Nick Scali (NCK) is an Australian retailer and

Plush is positioned as a mid-market, made-to-

RECENT TRADING UPDATE

In a trading update issued to the ASX at its recent

We discuss these factors in further detail below.

Written Sales Orders

i. Continued pressure on consumer discretionary spending.

Improved Conversion Rates

GROSS PROFIT MARGIN

Figure 6 Summary of Property Holdings (Source: Fairmont Equities, Company Reports)

CHART VIEW – NICK SCALI

Figure 8 NCK daily share price chart

Nearest Resistance: ~$11.22 Nearest Support: ~$10.00

MCMILLAN SHAKESPEARE (MMS) POSITIVE

During FY23, the GRS segment

Novated lease units increased +3.6%

Figure 12 Overview of Growth Opportunity from EVs (Source: Company Reports)

South Australia Novated Lease Contract Risk

Scenario 1: MMS Retains Contract in Sole Capacity

Scenario 2: MMS Retains Contract in a Panel Capacity

Scenario 3: MMS Loses Contract

Earnings & Margin Outlook

BALANCE SHEET FLEXIBILITY TO PURSUE MERGERS & ACQUISITIONS

Figure 14 Balance Sheet Metrics (Source: Fairmont Equities, Company Reports)

CHART VIEW – MCMILLAN SHAKESPEARE

Figure 15 MMS daily share price chart

Nearest Resistance: ~$18.00 Nearest Support: ~$15.00

BHP GROUP (BHP) POSITIVE

Figure 16 BHP weekly share price chart

Nearest Resistance: ~$46.00 Nearest Support: ~$43.50

FORTESCUE METALS GROUP (FMG) POSITIVE

Figure 17 FMG weekly share price chart

Nearest Resistance: ~$23.00 Nearest Support: ~$21.35

GOODMAN GROUP (GMG) POSITIVE

Figure 18 GMG daily share price chart

Nearest Resistance: ~$21.00 Nearest Support: ~$19.75

REGIS RESOURCES (RRL) POSITIVE

Figure 19 RRL daily share price chart

Nearest Resistance: ~$2.00 Nearest Support: ~$1.63

S&P 500 INDEX (SP500) NEUTRAL

Figure 20 SP500 weekly share price chart

Nearest Resistance: ~4,300 Nearest Support: ~4,100

LARGEST TRADED VOLUMES

Rank Stock Stock Name 52-week Last week’s Percentage

ASX ALL ORDINARIES

Rank Stock Stock Name 52-week Last week’s Percentage

CONTENT & MEDIA

Michael Gable (Managing Director)

Gordon Anderson (Portfolio Manager)

Gordon is RG146 Accredited and holds the following qualifications:

John Haddad (Equities Analyst)

John holds the following formal qualifications:

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