Smartpay looking interesting here and starting to improve over the last couple of weeks from a share price point of view. I think market is starting to price in the reopening of NSW and also SMP is a good inflation play as they clip the ticket on transactions, so increasing prices benefits their business. Still cheap in my opinion for a business with exceptional growth. Hopefully management start to engage with the market a bit more to get their story out there. 

Further to the monthly meeting and Smartpay mentioned as one to look at, I suggest seperating the NZ business from the Australian business. 

The Aussie business is the one with all the growth and this is where the opportunity is. The NZ business is likely to recieve a takeover again in the future and has been a cash cow to grow the Aussie business in the past. 

Their product allows businesses to pass on eft fees to their customers, which is very unique in the Aussie market and the reason for their growth. So a small business turning over $1m per annum could save between $10-15K per annum in eft fees. Thats money straight to their bottom line. 

One of the best fund managers around who are really good at picking companies with investing tailwinds are Pie Funds. In this video market update they are looking to invest in companies who would benifit from things like inflation. This is because they are getting feedback from management that there are cost pressures across the board with transport, raw material and labour costs increasing. So businesses like Tyro and Smartpay where they clip the ticket on the total transaction should benefit. I own Smartpay but not Tyro. Definetely worth watching. Pie were very early to pick up on the meal kit demand as well as the demand for bikes and pets over the covid crisis and their funds have performed exceptionally well. 

https://www.piefunds.co.nz/Market-Insights/Archive/market-update-july-2021?utm_medium=email&utm_campaign=Market%20Update%2022%20July%202021&utm_content=Market%20Update%2022%20July%202021+CID_dcee56077e666f75f2ed9cfb35c6f34e&utm_source=Email%20marketing%20software

SmartPay with a good update this morning showing 158% growth in their aussie business. Taking into account all the closures in Vic and regional NSW in June this is an incredible result. It continues to look incredibly cheap for a growth company and I feel the maket should catch onto it in then next few months. Much cheaper than the likes of Tyro, completley under the radar in my opinion. See attachment. 

I have taken a position in SMP as it looks very undervalued to me based on their growth. They are adding around 1000 customers per quarter, which equates to $15m in revenue per annum. I have them earing 4.5 cents per share by year end 2022 or a 17x multiple. For a company with this sort of growth it looks pretty cheap. 

Their main competitive advantage is the technology related to their payment terminals. In particular the ability to pass on the charges to consumers which means that the businesses (SMP's customers) end up getting the service for free. For a small business turning over say $1m per annum that could save them as much as $15000, which is basically profit to their bottom line. This is a very compelling product in my opinion.

There could be further upside with the divestment of thier NZ business which they almost sold prior to covid. 

I value SMP at $1.50 over the next year.