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…
Tag: jse
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…
How Much Could EasyEquities Be Worth?
A combination of boredom, lack of dopamine alternatives, stimulus cheques and the gamification of markets led the USA-based online stockbroker, Robinhood, from relative obscurity into a multi-billion dollar empire. This slick operation has amassed an estimated 20 million brokerage accounts and attracted a last-recorded $20bn fair value (even though shares have reportedly traded on the…
Winners in Lower-for-Longer
Mike Schüssler wrote a piece about how the pandemic-induced rate cuts are impacting South Africa (Economic recovery: Low rates are playing a starring role). Taking this further, I am going to build a top-down investment shopping list for those who believe that rates will remain low-for-longer and inflation benign. Simplistically, low interest rates are stimulative…
JSE-listed Preference Shares
Preference shares are an underappreciated asset class, particularly for income-seeking private investors who are less constrained than institutions when it comes to liquidity. But what are preference shares? Preference shares are shares with special rights attaching to them. Each preference share is unique but most have the following characteristics: Dividends: Preference shares typically pay a…
Redefine Properties: Is this REIT-listic?
Late on Friday, Redefine Properties (RDF) published its long-awaited dividend announcement for the year-ended August 2020. You can find the full announcement here: LINK. A Real Estate Investment Trust (i.e. “REIT”) has some special privileges and they come with some onerous requirements. If you don’t satisfy the requirements of being a REIT, you lose the…
How to Fix the JSE
We cannot fix problems if we cannot be honest enough to admit that they exist. If we are honest with ourselves, there is something deeply wrong with the JSE’s stock market and it appears systemic. One way to see it is that the JSE’s ecosystem is stuck in a negative feedback loop. Our stock market…
Ascendis Health: Why I Sold
OLD ARTICLE – Original posted on March 29, 2017 I have been following Ascendis Health since it listed and, while I was sceptical at first, I warmed to the company as I saw management executing their stated strategy. If you see here, I even use them as an example of how acquisitive growth can work: How…
EOH: The Cracks Appearing
OLD ARTICLE – Original posted on July 28, 2017 It may sound like I am picking on EOH Holdings (EOH), but I am not. My job is to look critically at companies and, where appropriate, disagree with the consensus view. Even if this is uncomfortable and hurts peoples feelings, it is important that I do…
Master Drilling: The Big Mistake
OLD ARTICLE – Original posted on August 26, 2016 Previously I wrote the following article on Master Drilling (Master Drilling: Unknown Gem). I will not rewrite the investment case that I noted in that article for Master Drilling as a world-class, niche industrial technology play with global, growing scale and sophistication. Pretty much all of that…
Master Drilling: Hidden Gem
OLD ARTICLE – Original posted on March 29, 2016 When I first encountered Master Drilling (MDI), I was mildly impressed and put them on the radar to follow closer. Over the subsequent three years, I began to become quite impressed with the business and its operations. Did you know that Master Drilling (run out South…
Santova: Growing & Undervalued
OLD ARTICLE – Original posted on October 11, 2017 Santova (SNV) is a non-asset based supply chain manager with more than 65% of its earnings coming from outside of South Africa, including the majority of hard currency in this. Santova put out a H1:18 trading statement yesterday that can be summarised as follows: H1:18 EPS and…
Warning Signs: Retailers, Shopping Centres & Retail REITs (Part 2 of 2)
OLD ARTICLE – Original posted on November 24, 2016 See Part 1 over here: Warning Signs: Retailers, Shopping Centres & Retail REITs (Part 1 of 2). There are three harmonious parts to a Real Estate Investment Trust (REIT): Income: These are predominantly rentals from tenant renting space from the REIT. The lower the vacancy rate…
Warning Signs: Retailers, Shopping Centres & Retail REITs (Part 1 of 2)
OLD ARTICLE – Original posted on November 22, 2016 Following an exchange with Byron Lotter on Twitter (see here) after what I believe (and the market believes) was a very poor trading update from Woolies (WHL). But Woolies is not alone in this regard. Here are the key listed retailers, their like-for-like same-store growth, inflation…
Sabvest: Unique Opportunity
OLD ARTICLE – Original posted on August 21, 2018 What makes for a good investment? Simple: (1) Quality underlying, (2) Growth / yield / return, & (3) Underpaying for all this. What makes a good investment fit into a diversified portfolio? Simple: (4) Being as little correlated to existing investments as possible. What makes all of…
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…
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…
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…