It has been a while since I put something down on this blog. It has been a tough couple of months for traders and investors alike. Market doesn't want to go higher due to the Euro debt crisis despite there clearly being some compelling valuations.
Here are the trades I am still playing with plus one new trade:
Old Mutual at under R14 (ADDED)
I'm not a huge fan of insurers but Old Mutual has a lot going for it. Its being tarred with the Euro crisis but remember that a lot of its profits come from South African operations and a lot of its valuation is linked to its stake in Nedbank. It is battling to kick on at the moment but Goldman Sachs recently upgraded the share to a buy.
Nikkei
As mentioned in the previous post, there has been a pretty predictable 9400 - 9800 band starting to form. Everybody is talking Japan at the moment and how cheap it is. You don't even have to believe in a super rebound in the markets to score. Scale 250 - 350 points each time and you can build a decent return here.
Brait at R17.50
Sure there is a lot of speculation around Brait at the moment, but it has two very solid assets underneath it in the form of Pep and Premier Foods. As it stands you are basically getting these businesses plus some cash and paying next to nothing for the other assets. Sure in some cases you probably shouldn't be paying much for them and without the dividend Brait is a less compelling investment story but if they can stick to generate long-term ROE of 20% odd you are going to find few investments that can match this.
African Bank Investments Limited
I maintain what I said in the earlier post - you get a dividend of 5%, you have a solid and cash generative business on an undemanding price to earnings multiple which doesn't have to support capital intensive investment banking businesses. Simple, stupid kind of investment?
Vividend Income Fund
Another of those investments which slot into the simple, stupid investment category is Vividend. There is nothing complicated about this new property listing. It is ungeared, nice portfolio and with a well respected management. You are picking up about 6% yield after tax and the price is off its highs. Definately worth a nibble.
Nothing else really jumping out at me.
I quite like the new Africa ETN from Standard Bank and have added a debit order for it from next month. Will see how that product evolves.
Showing posts with label Brait. Show all posts
Showing posts with label Brait. Show all posts
Saturday, June 18, 2011
Monday, April 18, 2011
April update
So those dumb-asses at S&P decided to downgrade the US of A this afternoon and caused some proper kak in the markets today. Stocks are down, dollar is down, metals are up… I’m so excited to see a bit of volatility.
Certainly not the prettiest market around at the moment but at least if you’re looking for some long-term value one has to feel some things are opening up.
Here are a couple of things I’m looking at:
The Nikkei at 9400
News out of Japan consistency looks bad, but the amount of money which is going to be sloshed around in the next few years rebuilding is likely to provide a serious catalyst for growth. I reckon you can get a pretty nice band between say 9400 and 9800 in which to trade in the next few weeks.
Brait at R18.50
Said it in the previous post and I maintain it – Brait at under R19 is incredibly tempting if you are a patient investor and looking for some long-term dividend growth.
African Bank Investments Limited at under R36
The sell-off has created an opportunity in local banking group Abil. You still get a dividend of around 4% and decent earnings growth forward.
Altech at R55
If you are looking for an Africa play then Altech is hard to ignore at the moment. The group is an early mover on the technology front onto the continent and with the share having slipped from R68 to R55 its tempting. A historic price to earnings multiple of 11 times earnings and a dividend yield of a tad under 6%.
Dividends, dividends, dividends.....
Happy hunting….
Certainly not the prettiest market around at the moment but at least if you’re looking for some long-term value one has to feel some things are opening up.
Here are a couple of things I’m looking at:
The Nikkei at 9400
News out of Japan consistency looks bad, but the amount of money which is going to be sloshed around in the next few years rebuilding is likely to provide a serious catalyst for growth. I reckon you can get a pretty nice band between say 9400 and 9800 in which to trade in the next few weeks.
Brait at R18.50
Said it in the previous post and I maintain it – Brait at under R19 is incredibly tempting if you are a patient investor and looking for some long-term dividend growth.
African Bank Investments Limited at under R36
The sell-off has created an opportunity in local banking group Abil. You still get a dividend of around 4% and decent earnings growth forward.
Altech at R55
If you are looking for an Africa play then Altech is hard to ignore at the moment. The group is an early mover on the technology front onto the continent and with the share having slipped from R68 to R55 its tempting. A historic price to earnings multiple of 11 times earnings and a dividend yield of a tad under 6%.
Dividends, dividends, dividends.....
Happy hunting….
Thursday, January 27, 2011
Liking platinum
I have been watching these gold and platinum prices with some interest and this recent sell-off has caught my eye this evening.
Personally I thought gold would hold around the $1320 mark but it went straight through that and maybe $1310 will act as some kind of support level. I think the thing which has surprised me on this front is the reason S&P rating cut in Japan, I thought there might be some money cycled out of there and into precious metal commodities... apparently not yet.
Whatever, I find gold over-rated and really only for the looneys.
The metal which does interest me though is platinum and I've taken a small long position on it at $1790 on the April future. There is nothing complicated about my thinking here... look around SA at the moment, everything is being held together on a shoe-string - roads, traffic lights, rail etc etc. Throw in that the rain has soaked the coal for the power stations and there is now a massive transport strike scheduled for early in February.
If the signs of economic improvement are to be believed and the emphasis on clean energy keeps being punted and that platinum is expected to come out of South Africa then surely you can't go too far wrong backing the metal from here?
On the equity front only two real plays are jumping out at me:
Brait
Rushed up to R26.50 before a cautionary announcement was put out and then the stock slumped to R22 but has subsequently bounced. Good play at these levels considering the dividend
RE:CM & Calibre prefs (RACP)
You can buy RACP at less than the NAV of a cash shell... To me that is simply brain-dead if you believe that Piet Viljoen and his team can generate even the most basic long-term investment return.
With the fun and games in Japan earlier today with the S&P re-rating I reckon Friday could be an interesting day for traders. Let's see who keeps their heads.
Personally I thought gold would hold around the $1320 mark but it went straight through that and maybe $1310 will act as some kind of support level. I think the thing which has surprised me on this front is the reason S&P rating cut in Japan, I thought there might be some money cycled out of there and into precious metal commodities... apparently not yet.
Whatever, I find gold over-rated and really only for the looneys.
The metal which does interest me though is platinum and I've taken a small long position on it at $1790 on the April future. There is nothing complicated about my thinking here... look around SA at the moment, everything is being held together on a shoe-string - roads, traffic lights, rail etc etc. Throw in that the rain has soaked the coal for the power stations and there is now a massive transport strike scheduled for early in February.
If the signs of economic improvement are to be believed and the emphasis on clean energy keeps being punted and that platinum is expected to come out of South Africa then surely you can't go too far wrong backing the metal from here?
On the equity front only two real plays are jumping out at me:
Brait
Rushed up to R26.50 before a cautionary announcement was put out and then the stock slumped to R22 but has subsequently bounced. Good play at these levels considering the dividend
RE:CM & Calibre prefs (RACP)
You can buy RACP at less than the NAV of a cash shell... To me that is simply brain-dead if you believe that Piet Viljoen and his team can generate even the most basic long-term investment return.
With the fun and games in Japan earlier today with the S&P re-rating I reckon Friday could be an interesting day for traders. Let's see who keeps their heads.
Saturday, October 16, 2010
Too easy
I have just logged into my e-mail and seen dividend notifications for my holdings in Sasol, FirstRand and Discovery as well as a re-investment notification for my Z-Govi holding and it reminded me how much of investing is simply method and repetition.
For sure there is little glamour in simply clocking up the dividends but you have to ask yourself - why work if you don't have to?!
I had a look at the performance of the Satrix Divi Exchange Traded Fund (ETF) product over the last year and I see that you have enjoyed a return of around 33%. Worst case scenario is an annual dividend yield of 4.5% which is not the worst return around and if you are looking for low-cost dividend investment strategies then this might be a product to consider adding to your portfolio.
Speaking of good dividend payers, has anybody been watching the rise in the Brait shareprice? It seems to have had a bit of a kick over October rising from R21 to above R24. This is one of those stocks I've kept in my portfolio primarily for its dividend yield which is sitting at about 6%.
The company did release a trading statement recently saying that earnings would be up sharply for the six months.
Basic eps and heps: 72.8 ZAR cents
Diluted eps and heps: 72.7 ZAR cents
This puts it on a PE multiple of around 14 times earnings and if you buy into the idea that Brait is the "smart money" then this looks attractive, particularly if the private equity portfolio is at the bottom of its cycle.
Another reason which might be contributing to the rise in the Brait share price is the similar rise in the Buildmax counter, in which Brait is a significant investor. Buildmax has risen from 27c to touch 40c this month and it looks like a turnaround plan is in place.
Happy trading investors.
For sure there is little glamour in simply clocking up the dividends but you have to ask yourself - why work if you don't have to?!
I had a look at the performance of the Satrix Divi Exchange Traded Fund (ETF) product over the last year and I see that you have enjoyed a return of around 33%. Worst case scenario is an annual dividend yield of 4.5% which is not the worst return around and if you are looking for low-cost dividend investment strategies then this might be a product to consider adding to your portfolio.
Speaking of good dividend payers, has anybody been watching the rise in the Brait shareprice? It seems to have had a bit of a kick over October rising from R21 to above R24. This is one of those stocks I've kept in my portfolio primarily for its dividend yield which is sitting at about 6%.
The company did release a trading statement recently saying that earnings would be up sharply for the six months.
Basic eps and heps: 72.8 ZAR cents
Diluted eps and heps: 72.7 ZAR cents
This puts it on a PE multiple of around 14 times earnings and if you buy into the idea that Brait is the "smart money" then this looks attractive, particularly if the private equity portfolio is at the bottom of its cycle.
Another reason which might be contributing to the rise in the Brait share price is the similar rise in the Buildmax counter, in which Brait is a significant investor. Buildmax has risen from 27c to touch 40c this month and it looks like a turnaround plan is in place.
Happy trading investors.
Friday, October 1, 2010
Small cap update - 2 October 2010
Hello fellow traders...
I see it has been a good few months since I last updated this blog which probably does not reflect that well on me.
What DOES however reflect quite well on me is the TrustCo share price over that period.
Let's take a look at some of the small-cap shares that have caught my eye over the last few months and where they are at now.
TrustCo
This share has really done nicely. Since I last blogged it, has risen from the 20's to touch a high of 65c with a lot of media attention. Directors have bought a whole whack of shares as well which has helped the story along.
In September, the company announced transactions with Econet and the International Finance Corporation (IFC) both of which should have an impact on the business.
Still think there is value in it if you are patient.
Interwaste
Share price wise this company has largely gone sideways over the last few months, but it is still up a bit since April.
On the plus side the financial results have shown something of a turnaround from the previous financial year and they have gained a number of new clients - the benefits of which should probably come through in the second half of the year. Guidance from management is that the second half of the year is traditionally stronger as well so let's see what comes through for the full-year.
One thing which needs to be watched a little closely is the cash position of the business.
The company overdraft facility has risen from R4.7m to nearly R30m for the six months ended June 2010. There is also negative cashflow as the business has made some serious capital investments.
For the 12-months, the net cash position had declined to -R21m.
Buildmax
This has been such a mixed bag sometimes I wonder.
The share is up from 27c to 31c and it looks like some serious corrective action is being taken to try and turn this business around.
New management are in place, rights issues have been sorted.
I'm gonna hang on to this one.
IPSA
Little to write home here. The share has gone nowehere.
However this announcement at the end of August will give shareholders some cheer:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that its wholly-owned subsidiary, Newcastle Cogeneration (Pty.) Limited has entered into a power purchase agreement ("PPA") with Eskom, the South African electricity parastatal, under the medium term power purchase programme ("MTPPP"). Under the new PPA all electricity output from the plant would be sold to Eskom for the period to 31 March 2015, and is based on 13 MW of capacity."
Again lets see what this translates into operationally.
RE:CM and Calibre
I got my hands on a few of these pref-shares last month and will try and get a few more as time goes by. I like Piet Viljoen in terms of his style of value investing and would like to think he can add value through this vehicle.
The share listed at R10 and has floated somewhere between R10 and R11 but there has been really limited liquidity so that is something that makes this tricky to watch.
Viljoen said that investors should expect "slow and steady" to start with so if you have a long-term investment horizon, then I'd probably be adding a few more of these to the portfolio as well.
Some others to consider
Three other stocks I have nibbled at in the last few months are Nigerian oil and gas group Oando, private equity fund Brait and Paladin Capital.
There seems to be some action happening at Paladin as the share price has risen more than 20% in the last few weeks. However this puts it well above its net asset value which is not always that easy to justify buying at the moment.
I see it has been a good few months since I last updated this blog which probably does not reflect that well on me.
What DOES however reflect quite well on me is the TrustCo share price over that period.
Let's take a look at some of the small-cap shares that have caught my eye over the last few months and where they are at now.
TrustCo
This share has really done nicely. Since I last blogged it, has risen from the 20's to touch a high of 65c with a lot of media attention. Directors have bought a whole whack of shares as well which has helped the story along.
In September, the company announced transactions with Econet and the International Finance Corporation (IFC) both of which should have an impact on the business.
Still think there is value in it if you are patient.
Interwaste
Share price wise this company has largely gone sideways over the last few months, but it is still up a bit since April.
On the plus side the financial results have shown something of a turnaround from the previous financial year and they have gained a number of new clients - the benefits of which should probably come through in the second half of the year. Guidance from management is that the second half of the year is traditionally stronger as well so let's see what comes through for the full-year.
One thing which needs to be watched a little closely is the cash position of the business.
The company overdraft facility has risen from R4.7m to nearly R30m for the six months ended June 2010. There is also negative cashflow as the business has made some serious capital investments.
For the 12-months, the net cash position had declined to -R21m.
Buildmax
This has been such a mixed bag sometimes I wonder.
The share is up from 27c to 31c and it looks like some serious corrective action is being taken to try and turn this business around.
New management are in place, rights issues have been sorted.
I'm gonna hang on to this one.
IPSA
Little to write home here. The share has gone nowehere.
However this announcement at the end of August will give shareholders some cheer:
"IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that its wholly-owned subsidiary, Newcastle Cogeneration (Pty.) Limited has entered into a power purchase agreement ("PPA") with Eskom, the South African electricity parastatal, under the medium term power purchase programme ("MTPPP"). Under the new PPA all electricity output from the plant would be sold to Eskom for the period to 31 March 2015, and is based on 13 MW of capacity."
Again lets see what this translates into operationally.
RE:CM and Calibre
I got my hands on a few of these pref-shares last month and will try and get a few more as time goes by. I like Piet Viljoen in terms of his style of value investing and would like to think he can add value through this vehicle.
The share listed at R10 and has floated somewhere between R10 and R11 but there has been really limited liquidity so that is something that makes this tricky to watch.
Viljoen said that investors should expect "slow and steady" to start with so if you have a long-term investment horizon, then I'd probably be adding a few more of these to the portfolio as well.
Some others to consider
Three other stocks I have nibbled at in the last few months are Nigerian oil and gas group Oando, private equity fund Brait and Paladin Capital.
There seems to be some action happening at Paladin as the share price has risen more than 20% in the last few weeks. However this puts it well above its net asset value which is not always that easy to justify buying at the moment.
Tuesday, January 19, 2010
6.5% per annum?!
So I've been surfing around the financial news sites and it would appear that Old Mutual had a press conference today, because they seem to have cracked a couple of mentions
Anyway the gist of the tune being rolled out by these guys is that investors need to rein in their expectations and accept that investment returns are likely to be lower than what they've had over the last decade or so.
Numbers of between 6 and 7% have been rolled around which I'm assuming are real returns after inflation.
Let's say you're getting 3% dividend from that, that means you're not really making a helluva lot in capital gains... which I guess begs the question whether you really want to be invested in the equity market for this decade.
Anyway the thought that jumped out at me is that while there are a lot of points about being made about traditional asset classes and how they are likely to perform very little is being said about things like private equity, venture capital or even unlisted investments.
For those looking for something a bit more risque in terms of their investments and not prepared to sit back on an index tracking performance, their might be some value in looking at some of the following for their portfolios:
Brait:
JSE listed private equity play Brait has been busy in recent months and they've signed up a couple of smaller deals for their funds. While I probably wouldn't want to put money in one of their funds, I might be interested in putting some money into the holding company which targets a long-term return on equity of above 25%. Worst case you get some decent dividends if you are prepared to buy into the business through the cycle.
Reinet
The JSE listed "private equity" player is effectively a proxy for the British American Tobacco shareprice at the moment. But there is no question that they have a bit of money on the sidelines which they are looking to invest.
Paladin Capital
I've touched on Paladin in previous posts so not going to do much else to add here.
Venfin
Is now de-listed but if I remember correctly you can still buy their shares OTC. Also gives you a bit of access to high profile tech.
---------
Nobody can really see well into the future but I would suggest on historical evidence and data on the real economy, we're entering a period of consolidation. Those who are likely to score could be part of the "smart money" who are making investments in higher growth businesses now in the hope that they can exit them when the price is right.
Interesting punt
This is really high risk and not worth risking your mothers pension on, but those with the flair for something different should look at that rights issue out of Nigerian oil and gas firm Oando (JSE:OAO). I can understand the whole issue about doing business with Nigerians but I think they came to the JSE for the right reasons and this rights issue could free up some of the float - I reckon it could be worth a punt.
I am going to write a bit more on Oando in my next post but as I say - something different...
Anyway the gist of the tune being rolled out by these guys is that investors need to rein in their expectations and accept that investment returns are likely to be lower than what they've had over the last decade or so.
Numbers of between 6 and 7% have been rolled around which I'm assuming are real returns after inflation.
Let's say you're getting 3% dividend from that, that means you're not really making a helluva lot in capital gains... which I guess begs the question whether you really want to be invested in the equity market for this decade.
Anyway the thought that jumped out at me is that while there are a lot of points about being made about traditional asset classes and how they are likely to perform very little is being said about things like private equity, venture capital or even unlisted investments.
For those looking for something a bit more risque in terms of their investments and not prepared to sit back on an index tracking performance, their might be some value in looking at some of the following for their portfolios:
Brait:
JSE listed private equity play Brait has been busy in recent months and they've signed up a couple of smaller deals for their funds. While I probably wouldn't want to put money in one of their funds, I might be interested in putting some money into the holding company which targets a long-term return on equity of above 25%. Worst case you get some decent dividends if you are prepared to buy into the business through the cycle.
Reinet
The JSE listed "private equity" player is effectively a proxy for the British American Tobacco shareprice at the moment. But there is no question that they have a bit of money on the sidelines which they are looking to invest.
Paladin Capital
I've touched on Paladin in previous posts so not going to do much else to add here.
Venfin
Is now de-listed but if I remember correctly you can still buy their shares OTC. Also gives you a bit of access to high profile tech.
---------
Nobody can really see well into the future but I would suggest on historical evidence and data on the real economy, we're entering a period of consolidation. Those who are likely to score could be part of the "smart money" who are making investments in higher growth businesses now in the hope that they can exit them when the price is right.
Interesting punt
This is really high risk and not worth risking your mothers pension on, but those with the flair for something different should look at that rights issue out of Nigerian oil and gas firm Oando (JSE:OAO). I can understand the whole issue about doing business with Nigerians but I think they came to the JSE for the right reasons and this rights issue could free up some of the float - I reckon it could be worth a punt.
I am going to write a bit more on Oando in my next post but as I say - something different...
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