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…
Tag: small cap
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…
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…
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…
Finding value in SA’s small- and mid-cap sector
Diversification across sectors is the best hedge against bad luck, stresses Keith McLachlan in a Moneyweb interview. Find the full interview over here: LINK.
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…
Santova: Global But With a Domestic Rating…
OLD ARTICLE – Originally posted on December 4, 2019 Santova Logistics (SNV) has been a core holding in the ASM Fund since its inception due to its unique, capital-lite business model with global reach and the potential for a compounding network effect across its operations. In brief, Santova offers a fourth-party logistics (“4PL”) solution for clients….
Lessons: Over-reliance on Management
OLD ARTICLE – Originally posted on January 7, 2020 The last couple of years have been very hard on those that invest in South African small cap stocks. Unfortunately, me, the Alpha Prime Small & Mid Cap Fund and my (incredibly resilient) investors have been no exception to this. Since the FTSE/JSE Small Cap Index’s…
Lessons: Mining is (Dam) Complicated
OLD ARTICLE – Originally posted on February 10, 2020 I’ve been invested directly in a growing, junior coal miner for going half a decade, amongst several other mining-related investments. Likewise, I’ve followed a wide range of mining companies closely for even longer and previously was invested in a mining exploration company and poked around a…
Lessons: Narrow Doors Make for Tricky Thoroughfare
OLD ARTICLE – Original posted on January 27, 2020 As a fund manager of a small cap fund, I am keenly aware of liquidity in the stock market. It is not just a constraint but a risk that needs to be managed on both a granular and an aggregate basis. And, sometimes, it can also…
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…
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,…
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…
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…