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Following from last week's article on the "Best of the Worst" penny stocks, I decided to pick a couple of the more promising (or controversial) small caps and run the same vote on them. The selection was limited and by no means representative of the vast numbers of small and mid caps out there, but I tried to get a good spread. It was quite interesting to see the results:
Vox is the clear winner with over 28% of the votes. The Group is currently trading at a PE of 5.18 with no dividends, but a market cap of R354 million (about half of what it was a year ago).Personally, I think Vox is operating in a highly competitive market with increasing numbers of competitors and / or substitute goods that it is competing with. The business is sound enough, but the market will erode the Group's margins over the long-term. On the other hand, I agree with the next couple of placings... PSG's agri-investment vehicle, Zeder, came second with just over 15% of the votes. The Group has performed well after its recent rights issue and is up over 40% in the last 12 months. A DY of 3.5% and PE of 8.93% show a confident market while retain some value in current levels. The recently Main Board transfered gold miner, PAN, and AltX's ACTowers came tied for third place with just under 13% of votes each. On the verge of bankruptcy that hangs dependent on Eskom's discretion, it is of little wonder that IPSA came last with not a single vote.
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