This week’s TAMIM Reading List explores the forces shaping how we think, invest, and imagine the future. From the challenge of discerning truth in a digital age to the deeper structural shifts in manufacturing and financial markets, we see a world in flux where certainty is elusive and complexity is rising. We reflect on the vulnerability of a generation to misinformation, the tools we can wield against it, and the surprising persistence of casino-like behaviour in capital markets. Meanwhile, discoveries across the cosmos from hidden hydrogen gas to the search for alien artifacts, remind us that exploration and understanding often advance through uncertainty. Even at home, the rapid reinvention of nations signals how quickly paradigms can shift. It’s a reading list for those seeking perspective amid the noise.
This week’s TAMIM Reading List captures a world quietly shifting beneath our feet. In the U.S., the heartland’s economic recovery offers cautious optimism, while Europe begins to redefine its place on the world stage. AI looms large from Nvidia’s pivotal role in global power dynamics to undercover bots infiltrating protests. We reflect on the legacy of leadership through the lens of President Biden’s cognitive fitness and explore how perception shapes reality. There’s also fresh evidence suggesting life beyond Earth and surprising lessons from slot machines and doctor visits. A collection of stories about what’s shaping and shaking our sense of control.
Investing in Australia’s Energy Infrastructure Backbone
In this three-part series, we outline the Tamim investment framework for identifying ASX-listed companies that provide the critical infrastructure, software, and services enabling the global energy transition. This thematic investment approach focuses on businesses that support the structural shift from fossil fuels to renewable energy sources, energy storage, and grid modernisation.
Part 1 highlights Southern Cross Electrical Engineering Ltd (ASX: SXE), a leading player in Australia’s energy and infrastructure sectors. As the world mobilises capital towards net-zero emissions targets, SXE stands out as a profitable, well-capitalised business poised to benefit from Australia’s growing infrastructure and electrification spend.
Business Overview: A Strategic Operator in Energy and Infrastructure
Southern Cross Electrical (SXE) has delivered record financial results, validating its position as a key contractor in the infrastructure and energy transition markets. The company’s first-half FY25 performance demonstrated exceptional operating momentum:
Revenue grew by 55.5% to $397.4 million
EBITDA increased by 58.5% to $27.1 million
Net profit rose by 67.8% to $16.2 million
Sources: Company
Infrastructure remains the company’s core revenue driver, accounting for 63.3% of total revenue. Key projects include the Collier Battery Energy Storage System, significant works at Western Sydney Airport, and the Shellharbour Hospital development—the largest healthcare project in SXE’s history.
Sources: Company
Capitalising on Data Centre Expansion
One of the company’s most compelling growth vectors is its rapid expansion into data centres, driven by the proliferation of cloud computing and artificial intelligence workloads.
SXE has increased its data centre revenue from approximately $20 million annually (FY19–FY23) to $50 million in FY24, with a projected rise to $120 million in FY25. The company is currently tendering for more than $500 million in future data centre projects.
Electrification and Energy Transition Exposure
SXE is directly aligned with Australia’s decarbonisation and infrastructure modernisation agenda. The company provides:
Engineering services for solar and wind farms
Battery storage installations
Electrical upgrades for industrial customers
Modernisation of grid and electrical infrastructure
This makes SXE a direct beneficiary of the electrification megatrend underpinning the global push towards net-zero emissions. Unlike many companies in the space, SXE is already generating strong earnings, has no debt, and pays a fully franked dividend.
Balance Sheet Strength and Strategic M&A
SXE’s robust financial position underpins its capacity for future growth:
$114.8 million in cash
No debt
Record $670 million order book
The company recently acquired Force Fire Holdings, a NSW and QLD-based fire safety services provider. The transaction was funded entirely from existing cash reserves:
Initial consideration: $36.3 million; total up to $53.5 million with performance-based earnouts
EBIT contribution forecast: $10 million in FY26
EPS accretive from day one
The acquisition provides strategic synergies by expanding SXE’s capabilities and footprint while increasing exposure to recurring revenue through maintenance contracts.
Valuation and Market Opportunity
SXE currently trades at:
~10x forward PE
A fully franked dividend yield of 5%
Source: Company
Comparable infrastructure and services companies on the ASX typically trade at mid-teens earnings multiples. Given SXE’s growth profile, strong cash position, and strategic alignment with key infrastructure trends, a market re-rating is possible.
We assess the company’s intrinsic value to be in excess of $2.00 per share, supported by earnings momentum and the scalability of recent acquisitions.
Investment Relevance
The structural transition in energy systems globally and in Australia necessitates significant capital deployment. Investors seeking exposure to this trend should look beyond pure-play renewables or speculative technologies and consider enabling businesses such as SXE.
Southern Cross Electrical offers:
Tangible exposure to data centre growth, renewable energy buildout, and electrification
A well-diversified client base and project pipeline
A disciplined M&A strategy funded by internal resources
Operational and financial resilience
SXE is not reliant on regulatory subsidies or unproven technologies. Instead, it generates consistent, growing profits from real-world projects.
Tamim Takeaway
Southern Cross Electrical is a compelling example of a high-quality, small-cap company delivering on Australia’s energy transition objectives. The company offers investors:
Leverage to infrastructure and decarbonisation trends
Strong financial discipline and capital allocation
A well-supported dividend yield with upside from valuation normalisation
For investors seeking reliable exposure to Australia’s net-zero infrastructure buildout, SXE deserves serious consideration as a core small-cap holding.
Stay tuned for Part 2 of The Small Cap Energy Transition Playbook, where we examine a software-driven billing and customer engagement company facilitating the shift to distributed energy systems and smart metering.
Disclaimer:Southern Cross Electrical Engineering Ltd (ASX: SXE) is held in TAMIM Portfolios as at date of article publication. Holdings can change substantially at any given time.
In February 2025, global technology markets were rocked by one of the sharpest momentum-driven selloffs in recent memory. A convergence of tariff shocks, geopolitical tensions, and algorithmic unwinds led to indiscriminate liquidations, particularly in the technology sector. On the surface, it looked like chaos. But underneath, something else is happening.
This is not the end of the technology boom. In fact, it may be the beginning of a new chapter. The selloff coincides with foundational shifts in global innovation, particularly in artificial intelligence, robotics, and decentralised energy. These transformations are accelerating. The current correction represents a rare entry point for long-term investors positioned for what’s next.
The Innovation Supercycle: A Technological Cambrian Explosion
The world is in the early innings of a multi-decade innovation supercycle. From neural networks to humanoid robots, programmable biology to autonomous logistics, the building blocks of tomorrow’s economy are rapidly taking shape. These aren’t siloed trends, they’re converging.
AI is now the central nervous system of innovation. It enhances everything it touches: medicine, mobility, finance, and manufacturing. And unlike prior booms, this wave is rooted in deflationary cost curves and exponential adoption. Innovation is no longer aspirational, it is the most practical path forward.
The Three Pillars of Strategic Investment
To navigate this new era, we propose a framework built on three interlinked domains of global power:
Technology – Advanced computing, AI applications, automation, and scalable software.
Energy – Decentralised, resilient systems: nuclear, battery storage, and microgrids powering the AI age.
Money – Digital finance, programmable assets, and sovereign investment strategies.
These three pillars don’t just drive growth they define control. A nation or company’s power will increasingly be determined by its positioning across these domains. Investment should follow the same logic.
AI’s Evolution: From Infrastructure to Intelligence
We are moving from Phase 1 of the AI cycle, characterised by the infrastructure buildout (GPUs, data centres, and model training), into Phase 2: application.
The new leaders are those deploying AI at scale across real-world domains. Companies like Confluent (data streaming), Kinaxis (real-time supply chains), and Tesla (robotics and autonomy) are emerging as critical layers in the productivity stack.
The value is shifting away from the plumbing and toward the user experience. As AI becomes cheaper and more accessible, it will drive a Cambrian explosion of intelligent applications.
February’s Selloff: Forced Unwind or Foundational Opportunity?
The recent correction, triggered by tariff escalations and a momentum unwind, caught even seasoned investors by surprise. High-beta sectors like semiconductors, cloud platforms, and digital infrastructure faced sharp drawdowns.
But beneath the surface, nothing fundamental has changed. AI adoption is rising. Cloud budgets are expanding. Robotics is scaling. The selloff was mechanical, not existential.
Sentiment indicators have hit extreme lows. Systematic exposure has been flushed out. These are historically bullish signals, especially when underlying demand remains strong.
The Policy Tailwind: Industrial Strategy Meets Innovation
Tariffs are not just a punitive tool, they’re an industrial policy. The current U.S. administration’s reshoring agenda is a direct attempt to force capital onshore and revive domestic productivity.
This policy shift aligns perfectly with technological trends. AI, automation, and supply chain intelligence are the key enablers of competitive onshoring. Platforms like Kinaxis and Tesla stand to benefit as both enablers and beneficiaries of this shift.
The New Arms Race: Intelligence, Not Iron
Just as the Cold War spurred the space race, today’s geopolitical competition is fuelling a digital arms race. China’s release of DeepSeek is a clear signal: supremacy in AI and robotics is the new high ground.
This race is generative. It forces breakthroughs. And it creates enormous opportunities for companies and investors who understand the stakes. Whether in synthetic biology, AI agents, or advanced manufacturing, innovation is now a geopolitical necessity.
Strategic Positioning: Buying the Future on Sale
For those with a long-term lens, the recent selloff is not a warning, it’s an invitation. Many next-decade compounders are trading 35–55% below their recent highs. These are not speculative flyers but businesses building the infrastructure of the next economy.
Rather than chasing yesterday’s winners, the opportunity lies in identifying Phase 2 leaders, those converting AI and energy into tangible productivity.
The TAMIM Takeaway
Panic is not a strategy. Innovation is.
The market is experiencing a short-term volatility event driven by geopolitics and quant flows. But the long-term trend is unchanged: the world is rewiring itself around intelligence, autonomy, and decentralised energy.
Periods like February 2025 are potentially how new wealth is created. When noise drives price but fundamentals remain intact, the result is a window of opportunity.
We believe that the companies shaping tomorrow’s systems of intelligence, energy, and capital are trading at attractive valuations. The rotation underway is painful in the moment, but it is shifting capital to where it is most needed: application-layer technology, resilient infrastructure, and geopolitical independence.
The foundation is in place. The time to build is now.
This week’s reading list explores a market in transition balancing between caution and resilience. We begin with a pulse check on current sentiment before unpacking the data behind recovery timelines and recession signals. The behavioural quirks of investors in volatile times serve as a timely reminder that psychology often drives performance as much as fundamentals. Meanwhile, broader geopolitical and social dynamics from the recalibration of American influence to the search for stability in digital spaces highlight just how interconnected our economic outlook has become. Whether it’s chaos theory or migration policy, each piece underscores the same theme: navigating complexity requires perspective.
