Hi Sean,
Two questions is fine, its what we ask subscribers to limit the number to, so thanks!:
Helloworld Travel Ltd (HLO): In February we exited HLO around $2 as a lower growth bricks and mortar aggregation travel company in favour of SiteMinder (SDR), a higher growth technology platform within travel. They have both struggled since.
- HLO does screen cheaply trading on 8.6x FY25 while forecast to yield strongly but its obviously very exposed to discretionary spend on travel.
At current levels this relatively small $243mn company looks solid, and we do think they have a stable of solid brands catering to our aging demographic, however, both Flight Centre (FLT and Corporate Travel (CTD) have downgraded earnings recently (CTD this week). Ultimately, we think the current trends towards travel spend is on the weaker side, shown through the updates from FLT and CTD (and other international travel stocks) so patience would be required here i.e. a turnaround unlikely in the near term.
Totemic (TTT): For subscribers not familiar with TTT its a $318mn company specialising in advanced metal additive manufacturing solutions, particularly through its proprietary Cold Spray Additive Manufacturing (CSAM) technology which is suitable in defence and aerospace industries.
It’s a small operative at the moment, with revenue of $7.7 million in FY24 and they are unprofitable, however, they are operating in an interesting space, and their technology has been picked up by larger players, last quarter announcing a new development collaboration with Northrop Grumman to produce and test aerospace-grade pressure vessels using Titomic Kinetic Fusion™. They are now engaged across multiple regions with government and tier-one primes and have a 59,000 sq. ft. facility in Huntsville, Alabama under construction, which remains on schedule to open in June 2025.
This is important, strategically located near key U.S. defence infrastructure and aerospace companies such as Boeing, Northrop Grumman and Lockheed Martin which will enable Titomic to meet growing U.S. content requirements under defence reshoring policies. Huntsville will serve as the company’s global HQ and manufacturing hub, aligning with the Biden administration’s focus on sovereign supply chains and rapid production capability. They also announced new collaborations with the University of Alabama (for materials R&D) and Metal Powder Works (for U.S. powder supply security) which expands their technical moat and supply chain localisation.
Ultimately, we would call this a speculative buy at current levels.
