Admirers with a bouquet
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?