There’s money in muck

Financial Mail - Investors Monthly - - Front Page -

Mon­tauk Hold­ings is an in­cred­i­ble growth story — yet its suc­cesses are largely ig­nored by lo­cal in­vestors, who pre­fer not to dab­ble in un­fa­mil­iar stocks.

The busi­ness was spun out of Hosken Con­sol­i­dated In­vest­ments (HCI) in 2014, and listed sep­a­rately on the JSE. The ini­tial mar­ket re­sponse was un­der­whelm­ing, and the shares drifted to around 200c at a value of about R270m. Four years later Mon­tauk has a mar­ket value of more than R13bn — around the same size as HCI.

Some HCI share­hold­ers will be won­der­ing why the in­vest­ment com­pany did not re­tain a stake in Mon­tauk. HCI’s ma­jor share­holder, the SA Cloth­ing & Tex­tile Work­ers Union was not keen to hold off­shore in­vest­ments. But some HCI di­rec­tors opted to back Mon­tauk. They have been richly re­warded.

One can for­give lo­cal in­vestors, who at the best of times shy away from in­vest­ments that re­quire great leaps of faith, for not cot­ton­ing on to the at­tributes of Mon­tauk.

The com­pany hasn’t gone out of its way to clearly com­mu­ni­cate its busi­ness model. And lo­cal in­vestors tend to treat un­bundling ex­er­cises with sus­pi­cion — per­haps fig­ur­ing that busi­nesses sent pack­ing by

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