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: south africa
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 is South Africa Doing (right now)?
Earlier this week, Stats SA published a bleak GDP update for South Africa that saw the domestic economy shrink -7.0% y/y in 2020. Perhaps a little better than expected but still a huge contraction. But that was last year and is old news now. A more relevant question is how we are doing right now?…
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 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…
Tax-Free Savings Accounts: Buy Risk & Sell Time
OLD ARTICLE – Originally posted on June 4, 2019 A Tax-Free Savings Account (TFSA) offers a superb, tax-efficient mechanism to compound long-term investments for South African citizens. In the below example, I use an assumption of 15% CAGR per annum from a basic South African equity investment and assume that you are paying a marginal…
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…
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…