Ad­mir­ers with a bou­quet

Financial Mail - Investors Monthly - - Opening Bell -

One would prob­a­bly not de­scribe mar­ket sen­ti­ment for elec­tronic consumer goods dis­trib­u­tor Nu-World Hold­ings as rosy, even though the com­pany has been the epit­ome of solid profit gen­er­a­tion for three decades.

The share is ac­corded a dis­mal five times earn­ings mul­ti­ple and, de­spite its peren­nial profit pro­file, of­fers a “sun­set in­dus­try” yield of close to 7%.

Go­ing Short notes that Old Mu­tual has been mer­rily of­fload­ing shares, and an en­tity called Wild Rose Cap­i­tal has been en­thu­si­as­ti­cally snap­ping up scrip.

Wild Rose Cap­i­tal ap­pears to be as­so­ci­ated with in­vest­ment banker Paul Man­sour and for­mer gaming guru Steven Joffe, who have popped up as prime movers at new-look industrial counter enX. EnX hit the head­lines re­cently for tak­ing an un­ex­pected tilt at debt-laden industrial con­glom­er­ate Eqs­tra.

Wild Rose now holds 24.49% of Nu-World, and will rank as a share­holder of in­flu­ence. But — not­ing Wild Rose’s suc­cess­ful trans­for­ma­tion of deadly dull Aus­tro into the racier enX — could there be big­ger plans for Nu-World?

With a mar­ket cap­i­tal­i­sa­tion of about R550m, Nu-World could con­ceiv­ably fit snugly into enX. But bed­ding down Eqs­tra — de­spite re­tain­ing key man­age­ment — will take time, and hav­ing an­other op­er­a­tional dis­trac­tion might not be pru­dent.

Per­haps Nu-World will be a com­pletely sep­a­rate ve­hi­cle in which Messrs Man­sour and Joffe can pur­sue more consumer-cen­tric am­bi­tions?

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