When fellow participant pre-empted one of my 2025 predictions in an annual prediction show (see the show here), I was forced to scramble for another prediction. My improvised prediction for 2025 was that a bundle of Aspen Pharmacare and Sandoz AG will outperform a bundle of Eli Lilly and Novo Nordisk. It is perhaps worth…
Some Personal Lessons
While I normally write about markets and investments, I thought it was time I wrote down some lessons. I hope you find this valuable. Invest in your relationships In an epic, multi-generational study on happiness, it was found that the strongest (by far) correlating data point with those that lived long, healthy and happy lives…
PIK the Turnaround
Following a rights issue and the successful floating of Boxer’s IPO on the JSE, Pick n Pay Stores (code: PIK) offers an interesting opportunity. The market has valued Boxer for us and, thus, Pick n Pay’s 65.6% stake in the retailer is worth R19.4bn (excluding a control premium). With Pick n Pay’s market cap currently…
Looking at Strong Rand Beneficiaries
The Rand has been strengthening, so of course analysts are now turning bullish on it (FirstRand turns more bullish on SA’s economy, rand). How long and how much are anyone’s guess, but the Rand’s trend is currently certainly towards strength. Ironically, though, this hurts large swathes of the JSE’s listed companies, from miners that export…
Why retailers suck at going offshore
Spar Group (code: SPP) is the latest in a long line of South African retailers that have burnt their fingers trying to go offshore with their businesses. From Shoprite retreating from a range of African countries and Woolworths and Mr Price failing in Australia to Truworths’ continuing struggles with UK-based Office Retail Group, South African…
Getting Schooled
Plenty has been written on the three JSE-listed education stocks, ADvTech (ADH), Stadio (SDO) and Curro (COH). Indeed, I’ve written plenty myself over here (Pick of the education stocks) and chatted about them here (Education stocks offer strong potential). But how do they all stack up currently? Who is outperforming whom? How are the current…
“SA Inc” Small Caps
South Africa’s Government of Nation Unity (GNU) has been a momentous event that markets have rewarded by strengthening the Rand and buying into our bonds and our equities. While nothing is certain and plenty of risks and challenges lie ahead for so-called “SA Inc” (i.e. South African centric investments), this is potentially a trajectory change…
Santova: Not Smooth Sailing (Yet)
An unappreciated aspect of active investing is that it sometimes it looks somewhat “passive”. Instead of trading in and out of stocks, an active investor is constantly checking and confirming their views. Assuming the facts and their opinion remain the same, their investments remain the same and, thus, this process can often look like inactivity….
Freight Going Down the Suez
Freight Going Down the Suez Off the Radar Keith McLachlan – CIO of Integral Asset Management Readers are likely aware that conflict in the Middle East has spread to attacks on commercial vessels traveling through the Red Sea. Naturally, this has had the effect of collapsing trade through the Suez Canal (Figure 1). Figure 1:…
Reinet’s Hidden Giant
Back in the 2008 when Reinet Investments (RNI) was formed, most of its net asset value (NAV) was made up of British American Tobacco (BTI). While the tobacco giant still makes up about a quarter of Reinet’s NAV (Figure 1), the investment holding company’s major exposure is now the Pension Insurance Corporation (PIC) – see…
AMCs & JSE-listed Global & Domestic Small/Mid Cap Notes
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…