OLD ARTICLE – Original posted on June 18, 2015 There is a lot emphasis on independence in various roles in financial markets. External auditors have to be independent, advisors hopefully too, wealth managers, some members of company Boards, and so on. All independent. But why? The theory goes that if a person is independent, then…
Category: Old Articles
Collection of popular old, archived articles.
Understanding the “Quality” of Revenue
OLD ARTICLE – Original posted on May 6, 2015 Analysts love to reference the quality of a business’s revenue streams, but what exactly is this “quality”? How does one find “quality” revenue streams? Let me give you a fictitious scenario of Company A and Company B. Both companies are equal in every financial respect, for…
Pan African Resources: The Cheapest Hole-in-the-Ground
OLD ARTICLE – Original posted on December 29, 2014 Firstly, I have no strong conviction on gold. I think that it is largely an ego-based commodity driven by investment fashions. In the short- to medium-term I suspect that the collapsing gold price has less to do with gold and more to do with the strengthening…
How to Read Results Like an Analyst
OLD ARTICLE – Original posted on September 23, 2014 Here is a (brief) list on how to read a listed company’s results on the JSE like an analyst. I’m going to list a couple key things to work through with the intention that in a matter of minutes you’ll be able to work out if the…
Key Attributes of a “Ten Bagger”
OLD ARTICLE – Original posted on September 1, 2014 A “ten bagger” is colloquial for a share price that rises a thousand percent or, in other words, makes you ten times your money. In some ways the Holy Grail of investments, the key consideration is how do you go about finding a ten bagger? Firstly,…
Look Beyond the Numbers
OLD ARTICLE – Originally posted on September 29, 2019 When analyzing a listed company for investment purposes, its financial statements are obviously a key variable to work through. If you have to ask ‘why’, then I kindly refer to this series of short webinars I did a few years back: Four Pillars of Fundamentals. While…
Five Lessons with Liquidity
OLD ARTICLE – Original posted on July 28, 2013 Besides all the usual skills and knowledge that goes with investing in stocks, operating in the small cap space forces you to master handling positions in low liquidity stocks. Here are five rules to help you handle low liquidity stocks: 1. Stretch your time horizon Low…
Difference Between Value Investing & Being a Contrarian
OLD ARTICLE – Original posted on January 29, 2013 Value investing is a process of identifying potential investments that can be bought for less than they are actually worth. This is done via the valuation process. Once an undervalued investment is identified and it meets the criteria the investor is looking for, it is bought and…
Explanation of a “Reverse Listing”
OLD POST – Original posted on May 18, 2011 Company A is listed. It has only 100 shares of R1 each, hence a share capital and equity of exactly R100. However unrealistic, it also has no other assets, liabilities or operating costs. For all effective purposes, we would call Company A a “cash shell”, as…
Why Excess Cash Is A Drag
OLD ARTICLE – Original posted July 8, 2011 Ever heard the term “lazy balance sheet”? Perhaps you’ve heard the term “excess cash”? They may sound strange, but they are rooted in capital efficiency and the theory of maximizing shareholder returns. But, this is perhaps getting ahead of myself, so allow me to elaborate…\ Return on…
What Astoria’s Discount Should Be
OLD ARTICLE – Originally posted on April 5, 2016 Investment holding (IH) companies insert an extra layer of cost between the underlying assets and the ultimate investor. In theory, this layer of cost includes management which allocate capital like a fund manager, thus generating alpha with the IH company’s capital. The reality, though, is neither the structure…
Astral Foods: Quality With Converging Positives
OLD ARTICLE – Originally posted on February 4, 2020 As a well-run, ungeared domestic poultry stock, Astral Foods (code: ARL) has two major variables that largely dictate its fortunes: What cost must it pay to raise its chickens? What price can it sell its chicken products at? Firstly, Astral’s long-term track record is superb, proving…