Matthew Kidman of Centennial Funds this week talks with Simon Shields of Monash Investors and Cyan Investment's Dean Fergie about "fallen angel" stocks. 

Yowie 

Simon Shields: Buy. Big volume growth to come in Yowie. We've seen Nielsen data, the kids really like it, it's selling extremely well, even though there's only limited distribution in the US, and it provides the retail with a very high margin. We think there are two compelling reasons why those volumes will continue to grow close to 100 per cent per annum.

Dean Fergie: I don't agree with Simon, unfortunately. Their sales, we think, don't really add up to the store presence that they're talking. They're still losing money. They've got a strong balance sheet, but with the change in management, we wouldn't buy that, so sell.

Vocus Communications 

Dean Fergie: Hold. Vocus has fallen a long way. It's nearly half of what it was when it bought NextGen. We think that business has gone pretty much ex growth although it's on a reasonable multiple. 

Simon Shields: Hold at best. It's business increasingly becomes a retailer of NBN's product over time, barriers to entry are falling.  

iSentia

Simon Shields: Hold. It's been an absolute shocker. The share price has fallen a long way. It used to be thought of as basically a monopoly with lots of sticky customers and pricing power. Increasingly, it's getting competition from Meltwater coming in and I don't think we're seeing the full impact of that yet, but the share price has started to anticipate it.

Dean Fergie: Sell. It's another example of investors being burned by a private equity sell down. Simon's right, there's competition from Meltwater. They've made a poor acquisition in King Content. It's not really living up to market expectations so I wouldn't be there, sell.

Capitol Health

Dean Fergie: Buy. I like Capitol Health. Their radiology centres are quite defensive, high barriers to entry, it's just raised about $40,000,000 in capital to pay down debt, new management. We think it's one to have a look at.

Catapult Group 

Simon Shields: Buy. It's fallen a long way as well. Wearable technology for sport. How can you not like that? Certainly, the teams do. Very sticky customers, lots of pricing power. A long way to go to penetrate the market and it's the biggest player in the space.