Share price: 195c JSE code: SKJ
SELL IT SEEMS AWFULLY CRUEL TO TAG Sekunjalo a sell after the hard work the executive team has done in securing cash flows, reinforcing the balance sheet and paying out a dividend that had eluded the company from its listing in the late 1990s. The company also seems keen to shed its controversial past — proposing a name change to African Equity Empowerment Investments, and recently announcing the retirement of founder and prime mover Iqbal Surve. Investor sentiment has steadily firmed, but the share price, fuelled, no doubt, by speculation over the nature of a cautionary notice, has run very hard in the last six weeks, (touching an all-time high of 315c as IM was going to press). Sekunjalo’s share price is now well ahead of the last stated official (and conservatively) net asset value of 116c/share — though, it must be said, the share can hardly be regarded as expensive on an earnings multiple basis considering headline earnings of 16c/share in the year to end-August. Sekunjalo’s anchor investment, Premier Fishing, should benefit from a weaker rand as a vast chunk of its business is exporting lobster. It also seems a bigger dividend from its investment in British Telecoms SA is on the cards. But whether the outcome of the cautionary (the has speculated it involves Sekunjalo increasing its stake in Saab SA) justifies the recent run in the share remains to be seen. IM has a feeling Sekunjalo’s shares might well take some time to rest and recuperate from recent exertions.