Buy Hold Sell: 5 undiscovered micro-cap gems on Livewire dated 19th March 2021

Aussie Broadband (ASX:ABB)

Ally Selby: We'll stay with you. Next up we have Aussie Broadband, which provides NBN services to residential homes and businesses. Is it a buy, hold or sell?

Nick Guidera (BUY): It's a buy for us. This is one of those emerging telcos that have come onto the market in the back half of last calendar year. They're taking a significant amount of share from the majors.

Ally Selby: It's still quite small though, isn't it like 3.5%?

Nick Guidera: Yeah, 3.5%. but I think they're taking north of 10% of all subscribers to NBN and they're largely doing that on the back of really strong customer service and a really strong internet service experience as well. And I think customers are demanding that significantly. These guys are also spending a lot on their network, which will ultimately drive the operating leverage in their business and we like what management are about.

Ally Selby: James, over to you. Its share price is up around 50% since it listed in October, is it a buy, hold or sell?

James Dougherty (BUY): It's a buy for us as well, largely because of the points that Nick made. We really like the management team, importantly the management team didn't sell a share in the IPO, they've dripped a little bit out since, but they're still large shareholders in the business. If you take that number that Nick quoted you - around 10% of NBN churn - if they do nothing else but just maintain that share and let the natural operating leverage that exists in this business playout, this business will be making in excess of $50 million dollars EBITDA in the next couple of years.

Disc: I hold in my Strawman and real life portfolio