Company Interview / What Richard's selling to fund this 'buy'

Key points:

Preference for taking profits in banks and Rio Tinto (ASX:RIO) and lifting cash levelsCautious stance on CSL (ASX:CSL) and Gentrack Group (ASX:GTK) despite perceived qualitySelective interest in Nick Scali (ASX:NCK) and Appen (ASX:APX) as emerging value opportunities

Richard Hemming from Under The Radar Report sets out a cautious approach to an increasingly volatile market, stressing that private investors can often tolerate more short‑term pain than institutions. Hemming favours taking profits in big, crowded trades, saying his team has recently moved to realise gains in the major banks and trimmed exposure to large miners such as Rio Tinto (ASX:RIO) after strong 12‑month returns. He notes cash levels around 20% as a deliberate buffer, arguing that meaningful cash reserves give investors flexibility to exploit dislocations.

In software, Hemming highlights Gentrack Group (ASX:GTK) as “emerging value” rather than a buy, after a guidance downgrade triggered about a 30% share price fall despite what he describes as solid revenue growth over several years and positive cash flow. He prefers to wait for upcoming results before committing fresh capital. On CSL (ASX:CSL), Hemming acknowledges franchise quality but views the outlook as too uncertain for new money, citing the sharp de‑rating from high growth multiples as a warning on large‑cap risk.

For new opportunities, Hemming points to Nick Scali (ASX:NCK) as quality at a discount, and Appen (ASX:APX) as “emerging quality”, noting improving China revenues, stronger balance sheet metrics and operational progress, while stressing position sizing and volatility management.