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….

Dow 10000 is here

Well the Dow Jones index has finally breached the 10000 point level once again and the psychological kicker that has come through is evident in Asian trading this morning. The Nikkei is up over 2% and people in general are feeling good about themselves.

Its just a damn pity that the US Dollar keeps seeing its ass and falling through the floor! It is acting as a serious handbrake to my long Sasol trade. Interestingly the SOLSBG warrant has continued to track up even if the Sasol share price has been moving sideways.

I had been gradually building up a long in platinum and have added to that position yesterday as the price has firmed above $1355. I suspect positive sentiment will be with the markets and industrial metals this week - trend is your friend and all of that.

On the small cap front
Did anybody see that new power board put in place at African Dawn?!

Christo Weise and Robert Emslie as non-execs. This surely has to be worth a punt if these guys are throwing their weight behind it.

Director dealings
It is interesting to see that directors are starting to sell into this market - is it the guys cashing for an early Christmas?!

Just yesterday:

• Topping over at Steinhoff sold R11m worth of shares
• Mokoena at Eqstra sold R240k
• Lazarus at Blue Label sold R309k
• Curle at Altech cashed in some of his options and sold R1.38m worth of shares
• Matlakala at Metropolitan sold out R2.5m
• Van Deventer at Shoprite settled options and cashed out R7.9m

I dunno - maybe if you start adding up the dealings in the last couple of weeks you will find a big number of people are cashing out. Wonder if it is just the Christmas / Festive Season phenomenon or whether they don't see value in their shares at these levels?

Catchup

Hhhhhmmm these South African public holidays have really played havoc with any day-trading activities so I've had to spend my time on the "investment" side of my portfolio.

Added a few more PSG and ZGOVI's to my portfolio and I've also added Country Bird Holdings to my watchlist.

PSG
Was pretty happy with the results out of PSG and I'm quite liking the way that their companies are actively seeking acquisitions while others are heading for the hills. Check how nicely Capitec has done in recent weeks since their results came out.

Below R16, I've been adding a few more PSG to the portfolio.

I'm also watching PSG for some action around their Paladin subsidiary which has been steadily adding to its holding in Top Fix Holdings. (Not totally sure what the strategy is here, because I'd have thought there were better quality assets - but I guess we trust Jannie Mouton's judgement on all of this)

ZGOVI
I'll blog separately on my Exchange Traded Fund (ETF) strategy for my portfolio but I've continued to add these ZGOVI's to my portfolio for a bit of diversity into another asset class.

These things have held up quite nicely and coupled with their distribution, they've been worthwhile to hold through all this turmoil.

Pick 'n Pay / Pikwik
How good were those results out of Pick 'n Pay! I have a couple of Pikwik in my portfolio and those results mean I'll probably add a few more to my portfolio. Some success in Australia with the Franklins operation at last and good cash flows. Nice defensive option in the portfolio and with decent cash flows come decent dividends.

Altech / Altron
Altech released their financial results yesterday and they also looked good. As far as IT companies go, my pick would be Altech. However while I like the Altech story, I've actually been adding the Altron shares (wider power and infrastructure story as well as access to ALT) as well as the Altron prefs to my portfolio for some dividend yield.

Strategy
In terms of strategy, I'm still short equity and long gold (underlying and AngloGold).

I see China has just announced that they've bought a stack of Gold which has driven the price back above the 900 dollar mark.

Equities are still looking a little shaky in general and it would appear that Chrysler is going into bankruptcy protection in next few days. Stress tests out of the banks also due out today... gonna be interesting.