Buy Hold Sell: 7 ex-20 stocks with strong balance sheets

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Edited Transcript:

Vishal Teckchandani: Welcome to Buy Hold Sell, brought to you by Livewire Markets. My name is Vishal Teckchandani. Finding small and mid-cap stocks shouldn't be all about growth - you need to back companies with strong cash flow, solid balance sheets, and the ability to fund their own destiny so they don't keep coming back for capital. In this episode, we'll analyse five stocks, plus my guests will each bring a name they believe ticks all the boxes and has a special edge.

Joining me are David Allingham from Eli Griffiths and Marcus Burns from Spheria. Gentlemen, welcome.

Marcus Burns: Thank you.

David Allingham: Thank you.

ANSELL (ASX: ANN) 

Vishal Teckchandani:

Alright, Marcus, I'll start with you. Ansell - a global leader in protective equipment. Buy, hold or sell?

Marcus Burns (HOLD): The company had a good run post its acquisition from J&J, but it's re-geared its balance sheet. Excluding the acquisition, growth is modest, and I think it's fairly priced.

Vishal Teckchandani: David, the stock is up around 40% over the past year. Is it running out of steam? Buy, hold, or sell?

David Allingham (BUY): I'm still a buy. I agree with Marcus that the acquisition has boosted short-term earnings, but there's also a large restocking cycle post-COVID, particularly in gloves and hospital wear. I think there's still some upside, and they're likely to be at the top end of their guidance this year. The stock has weathered geopolitical risks well, but beyond 2026, I'd be more cautious.

LOVISA (ASX: LOV) 

Vishal Teckchandani: Moving on to Lovisa - over 900 stores across 45 countries. It's become quite a global beast. Buy, hold, or sell?

David Allingham (BUY): It's rare to find a high-quality business facing multiple short-term challenges—uncertainty over same-store growth, slowing store rollout, a CEO change, and increasing competition. These worries have pushed the stock to a valuation it hasn't traded at for a long time. I see a great risk-reward opportunity.

Vishal Teckchandani: Marcus, do you agree? The stock is down 20%.

Marcus Burns (SELL): I'm going to take the opposite view - sell. The company has executed well, but it's a high-margin business with few barriers to entry. That makes it easy for competitors to step in. Given the high valuation and competitive risks, I see it as a sell.

BREVILLE (ASX: BRG) 

Vishal Teckchandani: Disagreement there, but let's turn to Breville - a great Australian success story. The stock is up around 25% over the past year, perhaps due to people buying their own coffee machines to save money. Buy, hold, or sell?

Marcus Burns (BUY): Breville has one of the best management teams in the country, investing heavily in R&D and marketing. Strong cash flow, a rock-solid balance sheet, and demonstrable market share gains make it a long-term buy.

Vishal Teckchandani: David, do you agree?

David Allingham (BUY): Absolutely. The company reinvested COVID-era gains into product development and expansion into new geographies. With strong leadership and a clear growth path, it's set up for sustainable earnings growth.

Charter Hall (ASX: CHC) 

Vishal Teckchandani: Our first double buy! Next up, Charter Hall—a major player in the REIT market. Buy, hold, or sell?

David Allingham (BUY): It's our preferred asset manager in the Australian market. Unlike equity asset managers, Charter Hall is tied to the property cycle, which we believe is turning the corner. We expect strong growth in the coming years.

Vishal Teckchandani: Marcus, your thoughts? The stock is up 25% over the past year.

Marcus Burns (BUY): I have to agree - buy. A good balance sheet, strong property funds management, and quality assets. With interest rates now being cut in Australia, asset valuations should benefit.

Supply Network (ASX: SNL) 

Vishal Teckchandani: Last one - Supply Network, which provides aftermarket parts for commercial vehicles. Buy, hold, or sell?

Marcus Burns (BUY): It's the market leader in aftermarket truck and bus parts in Australia and New Zealand. One of the best organic growth stories in the country - revenue has grown at 14-15% CAGR over the past decade with no acquisitions. ROE is high at 35%, and the balance sheet is strong. A well-run company with a bright future.

Vishal Teckchandani: David, your take?

David Allingham (HOLD): I'd say hold. It's an excellent business, but valuation is something to watch. Market share gains are steady, and they still have room to grow, but a lot of that is already priced in.

Stock Picks

Vishal Teckchandani: Alright, my favourite part of the episode! Each of you brought a stock that ticks all the boxes and perhaps has something extra. David, what’s yours?

Temple & Webster (ASX: TPW)

David Allingham: It's at the growth-focused end of the spectrum, and valuation is high, but its balance sheet gives it flexibility. With $130 million in net cash, potential for acquisitions, and only 3% market share in Australian furniture retail (up 20% in the last year), there’s significant upside. Management aims for $1 billion in revenue with 15% EBITDA margins, and we think they can surpass that.

Vishal Teckchandani:
Great pick! Marcus, do you have a stock with an equally strong balance sheet?

Eagers Automotive (ASX: APE) 

Marcus Burns:
Yes - The leading car retailer in Australia, with a 10-12% market share, growing both organically and through acquisitions. They hold the BYD franchise, which should perform well as affordable EVs gain traction. The company has $880 million in property assets and strong cash flow, making it a great investment.

Vishal Teckchandani: Gents, thanks for your insights.

Marcus Burns: Thank you.

David Allingham: Thank you.

Vishal Teckchandani: I hope you enjoyed this episode - strong balance sheets and even stronger opinions, just the way we like it! My name is Vishal Teckchandani. Don’t forget to like this video and subscribe to our channel. Happy investing!