26 replies to this topic

[ThatBlackGuy]

Thanks for your comment and opinion, it's different to my opinion & that's why I love DIY investing, cos I get to do my own thing with my own money. Am up 25% on these so am happy that I bought them.

Am sure you agree that Nav is only one metric that may influence the decision to invest, yes I would like to buy at half tnav too but these shares were not available at that price.
The nature of their business is not capital/ asset heavy like a manufacturing concern so the Nav holds less weight for me.

No arguments from me, if you don't like them or the intangibles are out of line for you then don't buy them,
No sure things on the small caps.

Cheers

 

NAV is a headline in Santova's own interim results ... which means I'm not the only guy concerned about it.

 

You're correct, its not that its the most important metric, but it definitely is risk mitigation regarding your valuation.

 

That's why I warned initially to just be careful ... that's all.

 

I still like the story and its valuation ... but I think I have more compelling investment cases in front of me for now.

[Procrastinator]

Thanks for your comment and opinion, it's different to my opinion & that's why I love DIY investing, cos I get to do my own thing with my own money. Am up 25% on these so am happy that I bought them.

Am sure you agree that Nav is only one metric that may influence the decision to invest, yes I would like to buy at half tnav too but these shares were not available at that price.
The nature of their business is not capital/ asset heavy like a manufacturing concern so the Nav holds less weight for me.

No arguments from me, if you don't like them or the intangibles are out of line for you then don't buy them,
No sure things on the small caps.

Cheers

[ThatBlackGuy]

Yip, goodwill, I think they are carrying 109 Bar of intangibles of which 52 bar was paid in goodwill for WM Shipping UK.
Translates into only 3 Million Pounds, not really that excessive if you consider this.
Plus what good business is sold with no goodwill?

I can tell you of many bad business I've seen bought with large amounts of goodwill. 

 

Doesn't seem to excessive??? 

 

According to the annual report:

 

Net Asset Value                      ZAR 150m

Goodwill                                  ZAR 110m (ZAR 50m of which is the acquisition you mentioned as "not excessive")

 

Tangible NAV                          ZAR  40m

Market Cap                             ZAR 154m (as of today according to Bloomberg)    

 

A large chunk of NAV is goodwill doesn't give me that warm fuzzy feeling. I'd prefer an underpin of tangible NAV, which is only 26%. What happens now if the acquired business don't perform as expected and that goodwill is written off?   

 

In the interims, Intangibles go to ZAR 115m and and NAV to ZAR 170m, giving a tangible NAV of ZAR 55m , which is a 36% underpin. Represents a nice increase, but is still excessive considering the variability in cash flows.

[Rosh]

Thanks everyone for the great feedback. Much appreciated     

[Rosh]

I can only comment regarding Santova

 

They do earn forex (not sure about USD) but certainly AUD and Sterling if I recall correctly. Valuation looks appealing from an P/E and EBITDA multiple perspective.

 

Just be careful though ... the NAV underpin is mostly intangible which is their software I assume ... the core of their business. Also, check cashflows ... I think they might be struggling there since I saw some debt factoring/discounting in the AFS.

 

But I also kind of like the story and the valuation.

 

Thanks for the great feedback

[Procrastinator]

Aaah Goodwill! Even worse.

Yip, goodwill, I think they are carrying 109 Bar of intangibles of which 52 bar was paid in goodwill for WM Shipping UK.
Translates into only 3 Million Pounds, not really that excessive if you consider this.
Plus what good business is sold with no goodwill?

[Aragorn]

Anywhere where I can see the dividend history of santova? Their website is not very helpfull...

Only one paid so far -

 

Final No 1 Decl - 20/05/2013 LDT - 19/07/2013 Pay - 29/07/2013 Cents - 2.50

[MrDividend]

Anywhere where I can see the dividend history of santova? Their website is not very helpfull...

[ThatBlackGuy]

I also like Santova, bought in at 90 cents, the intangible Nav is mainly made up of goodwill they paid for a business in the UK, convert the goodwill in pounds, and hence huge difference between tangible Nav and Nav. (As I understand it from the annual report).

 

Aaah Goodwill! Even worse.

[Procrastinator]

I also like Santova, bought in at 90 cents, the intangible Nav is mainly made up of goodwill they paid for a business in the UK, convert the goodwill in pounds, and hence huge difference between tangible Nav and Nav. (As I understand it from the annual report).

[ThatBlackGuy]

Rosh

 

Torre,

has run a bit, I wonder how the new acquisitions will bring the 50 odd P/E down? I'd prefer getting into Control Instruments & hope Tor does a share swap. At least if you buy in a R1.30 Torre's offer for Control Inst. is indicated at 1.40.

 

Santova

at R1.12 looks good with NAV of R1.25 (TNAV 40c) & P/E of 5. Do they earn in dollars? could be a little rand hedge? Rand Fuel/Oil price could be a concern

 

Litha

down a lot. R4 to R2.50. operating margin down 17% to 4%. I think the weak rand hurts this share? Paladin Labs might consider buying out minorities at this $ rate

 

Trustco

Unsecured/Micro loans. Interest rate increases coming? don't know how strong their book debt is?

 

I'd go TOR/CNL & Santova

 

I can only comment regarding Santova

 

They do earn forex (not sure about USD) but certainly AUD and Sterling if I recall correctly. Valuation looks appealing from an P/E and EBITDA multiple perspective.

 

Just be careful though ... the NAV underpin is mostly intangible which is their software I assume ... the core of their business. Also, check cashflows ... I think they might be struggling there since I saw some debt factoring/discounting in the AFS.

 

But I also kind of like the story and the valuation.

[Newbie-Wan Kenobi]

Rosh

 

Torre,

has run a bit, I wonder how the new acquisitions will bring the 50 odd P/E down? I'd prefer getting into Control Instruments & hope Tor does a share swap. At least if you buy in a R1.30 Torre's offer for Control Inst. is indicated at 1.40.

 

Santova

at R1.12 looks good with NAV of R1.25 (TNAV 40c) & P/E of 5. Do they earn in dollars? could be a little rand hedge? Rand Fuel/Oil price could be a concern

 

Litha

down a lot. R4 to R2.50. operating margin down 17% to 4%. I think the weak rand hurts this share? Paladin Labs might consider buying out minorities at this $ rate

 

Trustco

Unsecured/Micro loans. Interest rate increases coming? don't know how strong their book debt is?

 

I'd go TOR/CNL & Santova

 

 

[Shortboy]

ISA Holdings (Altx): Specialise in providing clients with software and services to secure their data and networks from unauthorised access or data being hacked and or stolen.

 

The Protection Of Personal Information Act (POPI) was signed into law late last year by Zuma and just needs to be gazetted to make it effective which will happen any day now.

 

Every business in SA that collects personal information i.e. everybody, no matter how small, will need to ensure they comply with POPI in securing their data and networks. If they get breached, their CEO faces fines and imprisonment penalties of R10m, 10 years or both.

 

My research shows that fewer than half of the big companies in SA have any form of reliable protection policies, processes or technical capability to deal with the ever growing threat of hacking. In fact less than a 3rd of them even know that the accountability for complying sits squarely on the CEO's shoulders.

 

This is the core business of ISA. For them, POPI must be like what Y2K was to lawyers and IT vendors, a once in a life time opportunity which is reinforced by being a compliance issue too.

 

Added to this unique opportunity and the growing threat of hacking that drives it, ISA has always been a profitable little company with a generous dividend policy and shareholder friendly attitude.

 

Well worth looking at from a buy and hold perspective.

 

I have owned stock for a couple of years now and look forward to see how they capitalise on the eminent compliance environment that can only be very good for their business.

[Shortboy]

How about Torre. I have seen many analysts punt this small cap in the past few weeks. I have seen the price shoot to 240c today (not sure if it will hold though).

 

Other small caps I have been pondering are:

• Trustco - TTO
• Litha - LHC
• Santova - SNV

 

What are your thoughts? 

Hi, I bought SA French (Torres previous name) after its price collapsed from about R1.60 to 35c in 2008/9. Classic value trap, as it then sank to 3c so I bought a whole lot more and sat on them for years. My investment is now over 220% up and looking very promising with all the business development taking place. The only thing I don't like is the foray they will be making into Congo shortly...those places require very special knowledge and relationships to work. We will see.

 

My current favourite high risk / high reward punt is Diamondcorp on Altx. They have had a terrible time over the last few years with the share price collapsing from around R15 in 2008/9 to around R1 today. Investors (including JP Morgan and Credit Suisse) have dumped them and run away leaving the share languishing for years.

 

The directors have stuck it out (and have been buying shares along the way) and are on the verge of commencing diamond mining later this year. Go to their website and read all the articles and updates. Provided the directors aren't lying about anything they are telling the market, my mate I were sufficiently convinced by their emerging story to buy R200k worth of stock back in November last year and intend holding for at least the next 3 years.

 

My minimum target price is R10, My long term investment target price once they get dividends going is R25.

[Rosh]

How about Torre. I have seen many analysts punt this small cap in the past few weeks. I have seen the price shoot to 240c today (not sure if it will hold though).

 

Other small caps I have been pondering are:

• Trustco - TTO
• Litha - LHC
• Santova - SNV

 

What are your thoughts?  :unsure:

[Saints]

Although I wish Burger King all the best I do not see them making a dent on FBR and TAS. The convenience food sector has enjoyed a great run for the past few years and shareholders have enjoyed great returns from the companies that were there from the start. From a GPI perspective I do not expect to see the tremendous run that FBR and TAS enjoyed, there has to come a time when market saturation is triggered 

[Bread]

Sorry. Not Monday the 10th......Monday the 13th.

[MrDividend]

Also have GPL, small holding, bought for the Burger King part plus they seem to have a history of paying an OK dividend. 

 

 

[Bread]

Perhaps Monday the 10th will be a good time to get in.

[Bread]

All things being equal, barring an interest rate hike, this share should continue it's upward trend although in the short term it might bounce around 456 while the chances are slim of a dip to or below 443.