Question on IMU & BET

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Question asked 11/06/2021

Question on IMU & BET

Hi James and Team,

Loving the new updates, in particularly the new podcast series. Sorry, few questions here so please be brief where you see fit. I have been watching IMU and BET with both stocks running pretty hard over recent months but have cooled off in recent weeks. Just wanted to hear your thoughts on both with comfortable entry points in mind (general advice only). Finally I acknowledge your Thursday evening note on Woolworths being neutral around $43. However, I wanted to hear your thoughts on the upcoming demerger of Woolworths. Generally, demergers have been positive for both companies and do you see it playing out this way for both Woolworths and Endeavour.

Thanks Jack

Answer

Hi Jack,

I have answered your 3 questions with a bias towards technical risk / reward ideas.

Imugence Ltd (IMU) 34c – This $1.7bn Perth based biotech company has an exciting future if they can execute on their plans for cancer patients. Without getting into too much detail, the opportunity is huge however the hurdles are high for what they are attempting. I have traded this stock – Harry is a big believer in what they are doing and owns it. That said, the shares have lost over 30% since its May high on the back of an article in the AFR questioning governance, demonstrating the stocks large volatility / speculative nature. Technically IMU now looks good into current weakness with stops under 24c.
Betmakers Technology (BET) $1.145 – This $800m NSW based software company provides the technology to power bookmaking – the same sort of thing happens with trading platforms, another company white labels a generic backend. This stock has similarly lost 30% of its value since May, we are neutral this particular volatile beast and further weakness down towards its 60c February low is not looking out of the question. We prefer PointsBet (PBH) which we hold in the Emerging Companies Portfolio.
You are correct statistically a demerger benefits both companies over the ensuing year however in the Woolworths / Endeavour case we believe better returns can be currently garnered in the growth sector and later down the track back in the value stocks i.e. 2021 is a year of rotation.

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Imugene Ltd (IMU)

LAST UPDATED 11/06/2021 16:09

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