See the below presentation for details: The two small cap AMCs can be bought on the JSE as follows:
Spur Corp & Grindrod: Two Update, Two Gems
It is always worthwhile revisiting earlier calls and see how they are progressing, especially on the back of fresh news flow. Two such calls have been ports & terminals group, Grindrod (GND), and restaurant franchisor, Spur Corporation (SUR). At the beginning of this year, I wrote about Spur Corp (Tucking into Spur) and highlighted both…
Back to School
A little over a year ago, I picked ADvTech (ADH) as my preferred education stock (Pick of the Education Stocks) while highlighting the growth of Stadio (SDO). I did not like Curro (COH) at that point both operationally and from a valuation perspective. While a single year is an arbitrary measure of performance, Stadio is…
Which Earnings Figure to Use?
Previously, I wrote about “Which Valuation Matters?” and a key input in most valuations is what the company has earned. With the increasing abstraction of International Financial Reporting Standards (IFRS) and many management teams publishing their own “versions” of earnings (so-called “adjusted”, “normalized”, “core” or “underlying”, et al earnings), the next logical question is: what…
Santova: A Great Business
Santova Logistics (SNV) has been a long-running stock pick of mine (for a decade or more by now!), and the Group’s latest set of results reinforces the stock’s validity as growth story. Check out my previous article on the Group here (Could Santova be a multi-bagger?). In a recent JSE panel of stock pickers (SA…
Tsogo Gaming Wins!
As one of the companies that did not waste the COVID crisis, Tsogo Gaming’s (TSG) FY 23 results confirm my earlier view (Tsogo Sun Gaming beating the odds). The gaming Group’s full-year revenue rose +27% y/y while H2:23 revenue grew +7.2% versus H1:23 showing how the momentum rose during the twelve-month period. The cost-cutting, rationalization…
Stor-Age’s UK property is Not Equites’ UK property
Following my previous writing on Stor-Age Property REIT (Stor-Age is Aging Well), the share price has done a glorious nothing since then. Which, I suppose is not a bad thing when compared to the pressure local markets have shown in the SA Inc and small cap space. Despite this, last week, Stor-Age’s share price suddenly…
Which Valuation Matters
Recently I was working through lists of companies that other people had valued (i.e. the JSE-listed HoldCo sector presentation I gave) and I realized that, perhaps, this article needed to be written. There are lots of different ways to value the same listed share, but which one is the correct one? As a “Rule of…
Market Should Drill into Master Drilling
A little over a year ago, I wrote about how I expected Master Drilling Group (MDI) to report strong results (Expect the Lights to be Shot Out). This wasn’t anything clever from my side. Rather it was noting that the Group’s key variables were moving in their favour: Order Book (a leading indicator for future…
Sector Analysis of JSE-listed HoldCo’s
Tucking into Spur Corp
Previously, I highlighted some of the so-called ‘reopening trades’ that remain on the JSE (There are still ‘reopening trades’ out there), which included Spur Corporation (SUR). Spur has now released their full H1:23 results revealing quite how well they are doing and the share price has started responding positively. How much more upside may be…
Domestic Distribution Gem
What feels like a billion years ago in 2021, I shone a light on the fantastic job domestic industrial and consumer distribution group, Hudaco (HDC), was doing: Hudaco group is flying. While global supply chains have eased (though Durban port & South African infrastructure has worsened) and COVID has receded (only to be replaced by…
Strategic status awarded to Renergen’s Virginia Gas Project by the SA government
Renergen is pleased to announce that the Virginia Gas Project’s Phase 2 is now a Strategic Integrated Project (SIP) under the Infrastructure Development Act (Act No. 23 of 2014) (IDA) and its amendments, gazetted by Public Works and Infrastructure Minister Patricia De Lille on 6 December 2022. Benefits related to SIP status include processes relating to…
Tsogo Gaming Beating the Odds
You should never waste a good crisis and, indeed, many of the well-run listed companies have exited the last two years of pandemic-induced misery in much better positions. Not only did they use this period for deep efficiency gains (i.e. cost cutting) that have boosted their margins, but many weaker, worse-run competitors likely went out…
There’s Life in the Life Insurers
While the pandemic created excess mortalities and hammered life insurers’ profits, it did reinforce how critical life insurance is and how important the institutions that write this cover are to the broader economy. The pandemic has faded into an endemic, mortalities have drifted lower (though they remain slightly elevated on some metrics and we still…
What Parts of PSG Should I Keep?
PSG Group’s “Project Value Unlock” has seen the legendary investment company unbundle a portfolio of shares before it will delist the rump with a cash offer later this month. If you were holding PSG Group, your brokerage account now has a range of other shares in it, and this naturally leads to the question: which…
Renergen – Successful Gas to Plant
Johannesburg, 5 September 2022, South Africa: Renergen is pleased to announce a major milestone, with the Virginia Gas Project (Virginia) now operational, transitioning Renergen from explorer to producer status by producing liquid hydrocarbons, with the helium module to produce liquid in due course. Renergen has beneficial use of the system and has commenced filling of…
Why First-Generation Crypto Has Failed
“It’s difficult to get a man to understand something when his salary depends on not understanding it.” -Upton Sinclair A range of businesses and careers have popped around cryptocurrency and, thus, have to defend its place in society. While I believe that blockchain and decentralized finance (“DeFi”) are wonderful innovations and will likely play a…
JSE Small Cap Showcase
Last week, the JSE hosted one of its small cap showcases. This series is part of a broader initiative to help the flagging smaller capitalization counters on the bourse. Interestingly, the JSE will be also introducing a sell-side market making scheme in the small cap market to help bolster liquidity across the counters. Exchanges around…
Omnia: The Right Chemicals
Following a decade of intensive investment with meager returns and a bloated, debt-laden balance sheet, I was one of the skeptics in 2019 who saw Omnia’s R2bn rights issue as confirmation that they had lost their way as a diversified chemicals group. Normally, issuing equity to pay off debt is a very expensive way of…
Investment Analyst Society launches IAS Portal
The Investment Analysts Society has partnered with the Profile Group, a top financial solutions provider, to create an investment portal that allows access to more market data and increases the network for IAS members. The new IAS portal, launched on 18th May 2022, provides a vital link between the listed companies and the investment community. It…
Hospitals: Overlooked Reopening Trade
Some sales lost during lockdown are lost forever. The money that was not spent on restaurants, hotels, holidays and haircuts during lockdowns will not result in more being spent on these items after lockdowns. On the other hand, those that needed knee replacements, back surgery or other so-called “elective” medical procedures and delayed those due…
Pick of the Education Stocks
Over the last month and a half, the three JSE-listed education stocks have reported their 2021 results (all have December year-ends, so the results are comparable). On the 23rd of February, private schooling group, Curro (COH), reported revenue growth of +15% from +9% learner growth (& fee increases), good cash generation and a strong recovery…
Obvious Value in Grindrod
Well positioned and efficiently operated ports and railways have unique attributes that can make them attractive investments. Firstly, they have natural barriers to entry because once there is an (adequate) port or railway, no one is going to build one right next to it. Secondly, once ports and railways are built, they have a geographic…
Sabvest Capital Keeps Delivering
I have a filter that I apply to investment holding companies (so-called “HoldCo’s”) to see whether it may be worth digging deeper into them: Is there an external ManCo? External ManCo’s can mean a misalignment of interest with shareholders. I want HoldCo’s where management are invested with other shareholders. How expensive is the HoldCo structure?…
Introduction to Fundamental Investing
I recently hosted a four-part introductory course on fundamental investing. It is free and it is available to be watched in your leisure. If you get value from this, please share this wide and far. Part I – Fundamentals Part II – Valuations Part III – Portfolios Part IV – Case Study & Q&A
Sprouts Farmers Market Inc
The ability to economically source, transport and sell fresh (i.e. time-sensitive & easily spoilable) produce at scale is a deeply geographical competitive advantage involving a surprising amount of complexity. Shoprite (SHP) only managed this in Africa by actively building up local supply chains in each of its countries to support its own retail footprint. Likewise,…
How is EOH’s Turnaround Going
Following its dramatic fall from grace, EOH’s new management team have dug in deep, swept clean and driven a commendable operating turnaround. I have full respect for the excellent job they have done here. It is not an easy task to turn a service firm around. Service firms tend to trade based on reputation (services…