The little Aussie bank beating the Big Four

1) Yesterday, there was a welcome surprise…and it wasn’t the RBA rate cut.

One of my recommendations, Judo Capital Holdings [ASX:JDO] came out with its latest trading update. It finished the day’s trade up 8.5%.

Who is Judo?

Judo is a bank. Even better, it’s a bank designed to cater to small- and medium-sized businesses.

What did they tell the market?

Lending growth for Judo is two times the market currently.

They also have better margins and growth prospects than, say, both Bendigo Bank and Westpac.

I mention those two because Bendigo and Westpac recently came out with their results too. Bendigo got whacked. It’s down nearly 20% in the last week.

And Westpac is down 6% over the same time frame.

Clearly, Judo is doing something right. One reason is that they focus on the profitable niche of business lending.

There are better margins here than mortgages because there’s less competition.

Judo also has less clients per banker to nurture relationships and monitor credit quality.

Judo is still in the building phase. Like the Death Star in Star Wars, it’s not yet ‘fully operational’.

I recommended Judo about 12 months ago. It’s up about 70% since that report.

It’s been a tidy run up as you can see here…

However, note the downtrend from 2022 into the low around October last year.

That’s a very typical pattern across the market. A lot of stocks — especially small cap stocks — got hammered in the bear market of 2022.

Now the market is chasing growth again and willing to bid on stocks that deliver.

That’s why I call the current dynamic the small cap “resurrection”. It’s happening across dozens of stocks.

Here’s another of mine, MA Financial [ASX:MAF], that’s started to rally up in a big way…

The important point is these two, like others, are moving up for fundamental business reasons.

This is good news!

For a long time, the market was held back because of the overriding macro concerns around Ukraine, China property and a possible US recession. Then the prospect of Trump tariffs rattled everyone again.

Judo’s results are also a handy barometer of recessionary risk.

They say their small business clients are weathering the economic headwinds and we’re on track for a ‘soft landing’. The market price action suggests the same.

As you can see from JDO and MAF, these factors are no longer holding back companies that executive on their business plans.

That’s what you want to see. There’s money to be made if you can get the shares right.

MA Financial was one of the stocks I included in my report, ‘Small Caps, Big Comeback’. It’s up 25% this year.

I suggest you look at the other two recommendations. One of them is up 14% in the last week…and looking primed to fly higher.

I’m not saying these shares are without risk nor that I get it right every time, these are small caps after all. But if you’re waiting around, the market is moving away from you every day.

Check out my ‘Small Caps, Big Comeback’ report here.

Even better, that’s just an introduction to the service.

My monthly issue will go out today with my latest recommendation…which is a true potential ‘resurrection’ idea indeed!

2) The Australian Financial Review has a very intriguing story today about an AI start up that wants to put buyer’s advocates out of business.

‘PropHero matches investors with properties in Australia, Indonesia, Ireland and Spain. It analyses the data of the client against suburbs and properties with the highest yields and also provides renovation advice.’

The AFR says PropHero has a $100 million valuation even though it only started a few years ago.

This is similar to the battle forming in the stock market. Those with AI at their disposal are going to have a massive advantage against those who don’t.

It’s early days yet, but expect to keep hearing stories on this as AI is used to win advantage in every industry where possible.

3) And finally…

I’ve been hinting this week something big brewing here at bit of a team-up we’re doing with non-other than James Altucher.

I’ve worked with James in the past. He’s a firecracker.

And wait till you hear the story he’s going to break to Fat Tail Daily readers next week…

I can tell you now, it centres around something James has learn about an upcoming Starlink IPO.

If it happens, it could well be the biggest IPO in history.

Bigger than the biggest so far…Saudi Aramco…by many times over.

But will it happen?

When?

And is there a backdoor way for Fat Tail readers to position themselves…BEFORE the big announcement is made?

You need to hear what James has dug up for us.

There’s been speculation for a long time surrounding a potential Starlink initial public offering (IPO), and the idea of an impending Starlink stock release date has investors excited.

But nothing is set in stone yet.

Is there a method to Musk’s trolling…and getting his face plastered everywhere on the planet…over the last year?

Is all this building up to a shock wealth event that could be bigger than anything we’ve seen in our lifetimes?

If so…what’s the angle for YOU?

James has got quite the story for you. And, having worked with him, he’s quite the storyteller.

But it’s not just fiction. James has an uncanny knack of being ahead of some of the biggest disruptive events in tech and business of the last 25 years.

You’ll see what I mean when he pays us a visit next week!

Best wishes,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

Murray’s Chart of the Day

Silver has been lagging golds meteoric rise.

But that may be about to change. Like a coke bottle getting shaken up when you finally take the lid off things can explode.

Silver has been holding above a major point of control for about a year but has gone sideways.

The long-term trend is up and the next target to the upside is all the way up at US$40. If silver can break above recent resistance at US$35 I think there is a chance we could see a strong rally towards US$40 which would put a rocket under Aussie silver stocks. So start hunting.

Regards,

Murray Dawes,
Editor, Retirement Trader, Fat Tail Microcaps, and Fat Tail Alliance