Tak­ing the eco­nomic heat and pres­sure

Financial Mail - Investors Monthly - - Analysis -

n April, shares in In­simbi Re­frac­tory & Al­loy Sup­plies fi­nally beat the peak they last touched in May 2008.

At a time when the com­pany’s ma­jor mar­kets — steel, foundry, alu­minium and ce­ment — are still fac­ing difficulties, the new peak is a trib­ute to man­age­ment’s abil­ity to nur­ture its cus­tomers, man­age cash flow and make suc­cess­ful small ac­qui­si­tions.

For In­simbi’s shares to at­tain a more ex­cit­ing PE rat­ing than the present 9.18 times will re­quire some eye-open­ing cor­po­rate ac­tiv­ity or a ma­jor turn­around in sen­ti­ment to­wards small-cap com­pa­nies. Those are not im­mi­nent but quite likely down the line, and in the mean­time it of­fers an ap­peal­ing div­i­dend yield of 3.95% at a share price of 114c.

In­simbi’s busi­ness de­pends largely on gov­ern­ment spend­ing on in­fra­struc­ture. It sup­plies al­loys and re­frac­to­ries (heat-re­sis­tant ma­te­ri­als) to steel and stain­less steel man­u­fac­tur­ers, foundries and pro­duc­ers of

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