Posting late at night sometimes I don't communicate that well. I started mumbling something about small cap shares and then found bed calling so let me try again.
I think there may be some merit in certain of the JSE listed small cap shares in 2010 and here are a list of stocks which I believe should be considered. Some are great businesses with a good track record and some are a little higher risk.
AdvTech
South Africa's leading private education provider, AdvTech is one of those stocks which could be classified as defensive. Parents will always want to equip their kids with the best opportunities. There is a massive shortage in quality education providers in the country and AdvTech gives you one way of participating in it.
Historical PE multiple of 12 means its not cheap but sometimes you pay a little extra for a bit of quality
CIC Holdings
This is a nice little company which has re-rated significantly since I tipped it at 80c last year. Presently trading at around 130c a share it still only sits on an historical PE of 5 times earnings. Its a company that not a lot of people know much about but it owns quite a lot of agencies in growth markets in Africa. It's partly owned by Paladin Capital (PSGs investment arm). A positive for it is first mover advantage but a negative in that it is an agency type business and does not have a lot of its own Intellectual Property. Still might have some legs though.
Zeder
Jim Rogers is still mumbling on about farming being all the rage in the coming years and I can buy that story. Zeder, the PSG agri-ops business has been very aggressive in the last 12 months sorting out and growing its portfolio.
Paladin Capital
This is your alternative in the education space (but with far less concentration). Paladin - the PSG investment arm - is in the process of rolling out and expanding its network of Curro schools. These guys have been tipped as being super aggressive so and probably not the nicest management around but they'll get the job done.
Pallinghurst
This is the only resource play which jumps out at me but I am useless at judging the sector so don't go on my word. I was speaking to one of the resource guys yesterday and his thinking is that it will either be a 10-bagger or it will go nowhere fast.
Beige Holdings
I am probably going to take much flak for this one but this is a company I really like. Its got much too much paper in issue but its not the worst business around by the stretch of anyones imagination. It has quite a lot of negative legacy issues which its battling to shake off. However it has a major competitive advantage in terms of that new factory which it has put together in Chloorkop plus that factory in Durban (Quality Products I think its called). They can interchange product lines extremely quickly meaning they can shift up or down depending on demand. Paper is a huge issue though. Directors have also not been shy to buy their own stock.
Glenrand MIB
Buying a share in an insurance broking operation in the current economic climate seems to be madness. But that hasn't stopped the big-wigs at GlenMib putting their money down on a regular basis. Something is potting here and a historical PE of 9 considering the problems they had last year may be a sign that better earnings are coming through.
If anything else jumps out at me, I'll post it below this thread but it might be something to look at.
Showing posts with label Zeder. Show all posts
Showing posts with label Zeder. Show all posts
Friday, January 15, 2010
Saturday, June 20, 2009
Some fundamental calls
There are no shortage of opportunities to scalp around the commodities but finding deep value investments are a little tougher given the economic outlook.
Markets may have rallied and there may have been some stimulus in the system prompting some improved data but I get the sense we're starting a second downward leg.
Previously on this blog I've mentioned that I like the agriculture and food sectors as good bets over the next year or so. I've had my holdings in Zeder (plus followed the rights issue) and added to my shares in Country Bird Holdings (CBH) on the back of the directors dealings.
Another sector I hadn't given much consideration to was education in South Africa. Specifically private sector education.
Your main listed entry point for education at the moment is via Advtech which owns the Crawford schools. The share has run hard but they have an important area that AdvTech has is scale... You need scale and infrastructure to make a success of education for obvious reasons.
The second unknown entry point which I had only heard about quite recently was through Paladin Capital (a soon to be listed subsidiary of the PSG group). They've apparently got a fairly sizeable investment in a new education player which might be of interest....
** Author holds shares in ZED, CBH, PSG
Markets may have rallied and there may have been some stimulus in the system prompting some improved data but I get the sense we're starting a second downward leg.
Previously on this blog I've mentioned that I like the agriculture and food sectors as good bets over the next year or so. I've had my holdings in Zeder (plus followed the rights issue) and added to my shares in Country Bird Holdings (CBH) on the back of the directors dealings.
Another sector I hadn't given much consideration to was education in South Africa. Specifically private sector education.
Your main listed entry point for education at the moment is via Advtech which owns the Crawford schools. The share has run hard but they have an important area that AdvTech has is scale... You need scale and infrastructure to make a success of education for obvious reasons.
The second unknown entry point which I had only heard about quite recently was through Paladin Capital (a soon to be listed subsidiary of the PSG group). They've apparently got a fairly sizeable investment in a new education player which might be of interest....
** Author holds shares in ZED, CBH, PSG
Wednesday, April 8, 2009
Fascinating
It's been a fascinating couple of weeks in the market. Biggish rally which seems to have sucked in a lot of people seeking some relief from the constant selling pressure and suddenly the downside has "re-emerged".
Somebody made a good point though - last week was the end of the first quarter reporting period for unit trusts so while I'm sure they will deny it there must have been some "padding" going on.
Didn't really do much with the rally but rather elected to sit on the sidelines. The only thing I bought was a few more shares in Zeder to satisfy my farming fetish. Their results came out recently and weren't too shabby and I see I'm basically getting a 5% dividend yield from them (at R1.35) so I can't complain too much.
The unlisted investments are valued at R1.92 which looks like you get them at a pretty deep discount if you follow the rights issue at R1.35.
Anyway - watching the US market yesterday and rest of global markets today, the sell-off trend seems to be back. It looks like we've got two things to watch now which are likely to weigh on the markets going forward:
Credit card debt: In the US credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Moody’s cited higher unemployment and forecast so-called charge-offs will exceed 10 percent by the end of the year.
As credit cards tighten remember the pressure this is going to have on retailers who depend on credit based sales... This is a very real problem and its coming to your doorstep...
CDS defaults rate on the up: Credit Default Swap default rates are on the up again which adds fuel to my thought that the rally may have suckered in a few more people.
Remember that this rate went up sharply when the "smart money" decided to start taking some collateral just before the October crash.... If this is on the up again then tread warily...
Autos
The auto companies are an interesting one... I think that while people accept that Chrysler and GM are effectively about to go into "prepared" bankruptcy I think the actual "shock" to the system will send shudders through the US markets.
Looking at the data, experts are predicting that GM will go down in the next 2 - 3 weeks...
Wouldn't be particularly long in this market I'm afraid.
Somebody made a good point though - last week was the end of the first quarter reporting period for unit trusts so while I'm sure they will deny it there must have been some "padding" going on.
Didn't really do much with the rally but rather elected to sit on the sidelines. The only thing I bought was a few more shares in Zeder to satisfy my farming fetish. Their results came out recently and weren't too shabby and I see I'm basically getting a 5% dividend yield from them (at R1.35) so I can't complain too much.
The unlisted investments are valued at R1.92 which looks like you get them at a pretty deep discount if you follow the rights issue at R1.35.
Anyway - watching the US market yesterday and rest of global markets today, the sell-off trend seems to be back. It looks like we've got two things to watch now which are likely to weigh on the markets going forward:
Credit card debt: In the US credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Moody’s cited higher unemployment and forecast so-called charge-offs will exceed 10 percent by the end of the year.
As credit cards tighten remember the pressure this is going to have on retailers who depend on credit based sales... This is a very real problem and its coming to your doorstep...
CDS defaults rate on the up: Credit Default Swap default rates are on the up again which adds fuel to my thought that the rally may have suckered in a few more people.
Remember that this rate went up sharply when the "smart money" decided to start taking some collateral just before the October crash.... If this is on the up again then tread warily...
Autos
The auto companies are an interesting one... I think that while people accept that Chrysler and GM are effectively about to go into "prepared" bankruptcy I think the actual "shock" to the system will send shudders through the US markets.
Looking at the data, experts are predicting that GM will go down in the next 2 - 3 weeks...
Wouldn't be particularly long in this market I'm afraid.
Monday, March 30, 2009
Over....
I guess this means that the rally is over...??
Looking over at the Dow in the US it's "blood on the trading screens" with the heavyweight industrial index down over 320 points....
It's funny - it didn't matter how many people you spoke to in the last week or so, almost everybody was cautioning against being sucked into this rally... and yet people couldn't help but chase the "hope".
I'm guessing we're going to see a sub-7000 Dow this week as reality starts to sink in again about how tough things are out there. My feeling is that today was the death knell for General Motors (and probably Chrysler as well)... although I have no idea how Ford is managing to stay alive in these markets.
Having said that, I don't think South African equities are particularly expensive and I guess doing a bit of stock-picking should pay-off in the next few years from these levels.
Two stocks I've blogged on before, remain popular in my tiny investment universe - namely Interwaste and Zeder.
Interwaste
Interwaste is a waste-management firm and the only way for SA investors to gain exposure to this lucrative sector in the listed space. The company reported its full year results to December 2008, and a much better performance. I looked specifically at the cash flow from operations and I reckon this free cash-flow indicates some dividends could be on the cards in the next few months.
Remember also that management remain sizeable shareholders in the business and that will probably mean that they'd like to push for dividends as well out of their investment.
Zeder
This agricultural operation has announced that they will be going ahead with a rights issue at 135c a share, in the next few months. The company says it sees a number of opportunities and it is raising cash to take advantage of them.
Zeder is trading on an historic PE of 6 in a relatively defensive sector, especially with its large stakes in KWV and Pioneer.
Think there is merit in adding to these two positions.
Looking over at the Dow in the US it's "blood on the trading screens" with the heavyweight industrial index down over 320 points....
It's funny - it didn't matter how many people you spoke to in the last week or so, almost everybody was cautioning against being sucked into this rally... and yet people couldn't help but chase the "hope".
I'm guessing we're going to see a sub-7000 Dow this week as reality starts to sink in again about how tough things are out there. My feeling is that today was the death knell for General Motors (and probably Chrysler as well)... although I have no idea how Ford is managing to stay alive in these markets.
Having said that, I don't think South African equities are particularly expensive and I guess doing a bit of stock-picking should pay-off in the next few years from these levels.
Two stocks I've blogged on before, remain popular in my tiny investment universe - namely Interwaste and Zeder.
Interwaste
Interwaste is a waste-management firm and the only way for SA investors to gain exposure to this lucrative sector in the listed space. The company reported its full year results to December 2008, and a much better performance. I looked specifically at the cash flow from operations and I reckon this free cash-flow indicates some dividends could be on the cards in the next few months.
Remember also that management remain sizeable shareholders in the business and that will probably mean that they'd like to push for dividends as well out of their investment.
Zeder
This agricultural operation has announced that they will be going ahead with a rights issue at 135c a share, in the next few months. The company says it sees a number of opportunities and it is raising cash to take advantage of them.
Zeder is trading on an historic PE of 6 in a relatively defensive sector, especially with its large stakes in KWV and Pioneer.
Think there is merit in adding to these two positions.
Monday, March 9, 2009
Going farming
It is damn tricky to make any money trading in this environment so I guess sticking to simple strategies is probably the best way to try and accumulate wealth while the world is tumbling around you.
Somebody asked me the other day why I am buying equities in a market that continues falling.
That's easy
1. Nobody can pick the bottom to the cycle. We've seen huge sell-offs and maybe we will see more losses but I think that we're getting to a point where some of the good SA businesses are starting to offer some value.
2. I am young enough that I need some kind of long term nest-egg and forced savings method to ensure I'm not blowing what I have grown. If I depend on monthly salary cheques or income from my businesses and I blow all of that, then in reality I am going backwards. By sticking some money into quality, income generating stocks trading well below their NAV I am creating a type of forced savings to carry me through that I won't be tempted to dip into.
Good old Jim Rogers was on Bloomberg yesterday and he said that he reckons it will be the farmers driving the Lamborghini's in the coming years and that kind of ties in with some of my thinking that farming and agriculture are going to be great places to invest over the next few years. I've got a few shares in Zeder - who announced a pretty interesting deal yesterday with KWV - and I'm planning to add to the Pioneer Food Group shares in my portfolio as well as look at adding Crookes Brothers as well.
Otherwise, selling pressure remains constant in the US and the Nikkei bounced off intra-day lows.
Somebody asked me the other day why I am buying equities in a market that continues falling.
That's easy
1. Nobody can pick the bottom to the cycle. We've seen huge sell-offs and maybe we will see more losses but I think that we're getting to a point where some of the good SA businesses are starting to offer some value.
2. I am young enough that I need some kind of long term nest-egg and forced savings method to ensure I'm not blowing what I have grown. If I depend on monthly salary cheques or income from my businesses and I blow all of that, then in reality I am going backwards. By sticking some money into quality, income generating stocks trading well below their NAV I am creating a type of forced savings to carry me through that I won't be tempted to dip into.
Good old Jim Rogers was on Bloomberg yesterday and he said that he reckons it will be the farmers driving the Lamborghini's in the coming years and that kind of ties in with some of my thinking that farming and agriculture are going to be great places to invest over the next few years. I've got a few shares in Zeder - who announced a pretty interesting deal yesterday with KWV - and I'm planning to add to the Pioneer Food Group shares in my portfolio as well as look at adding Crookes Brothers as well.
Otherwise, selling pressure remains constant in the US and the Nikkei bounced off intra-day lows.
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