FIN­WEEK’S PICK OF SIX RE­SIS­TANT SMALL CAPS

Finweek English Edition - - Cover -

ad­VteCh

This com­pany of­fers top-rated pri­vate ed­u­ca­tion brands along with hu­man re­sourc­ing ser­vices. A good ed­u­ca­tion is non­nego­tiable in SA, which makes Craw­ford Colleges al­most a de­fault op­tion for par­ents want­ing to give their kids a “learn­ing” op­tion out­side the main­stream. Ad­vtech’s hu­man re­sourc­ing busi­ness should do well in a down­turn, with com­pa­nies more likely to use con­tract work­ers than re­hire per­ma­nent staff.

OCEANA

A su­perbly man­aged fish­ing busi­ness that cov­ers al­most ev­ery nook of the seafood in­dus­try. Lucky Star is an ex­cep­tional brand found in most house­holds through­out SA. The group’s large ex­port busi­ness is bound to ben­e­fit from the weaker rand. With a strong bal­ance sheet un­der its belt, div­i­dends could be gen­er­ous.

CITY LODGE

A great “bud­get” brand of­fer­ing guests solid, no-frills ac­com­mo­da­tion. As com­pa­nies look to trim their es­sen­tial travel costs you can bet City Lodge (or its vari­ants, the Road Lodge and Town Lodge) will be run­ning near full ca­pac­ity. City Lodge has an ex­pe­ri­enced and ded­i­cated man­age­ment team with re­as­sur­ing cash flows and a strong bal­ance sheet to boot. And great value also re­sides in its prop­er­ties.

BOWLER MET­CALF

junc­ture, but Bowler Met­calf has carved an en­vi­able niche in plas­tics and bot­tling. Over the years it has put larger com­peti­tors, such as Nam­pak and As­tra­pak, in the shade. More im­por­tantly, Bowler Met­calf has seen (and sur­vived) sev­eral down­turns since list­ing in 1987. The group not only holds solid an­nu­ity in­come from con­tracts to pro­duce “everyday items” for blue chip clients but the cash gen­er­a­tive busi­ness is also run by a no non­sense team with an eye on the mar­gin at all times.

PHUMELELA

As so-called “sin stocks” go Tote op­er­a­tor Phumelela may make a more com­pelling op­tion that tra­di­tional gam­ing groups listed on the JSE. The group dom­i­nates SA’s racing mar­ket – where a ded­i­cated fol­low­ing should en­sure rev­enues aren’t af­fected too badly by any eco­nomic down­turn. Phumelela’s off­shore busi­ness is also start­ing to pick up pace.

DIS­TELL

“The peo­ple shall drink… es­pe­cially in hard times,” so it’s said. Dis­tell owns a su­perb range of liquor brands – cap­tur­ing the young and the rest­less (ciders and ready-to-drinks), the reg­u­lar wine tip­plers (Neder­burg, Fleur du Cap), the con­nois­seurs (pre­mium brandy) and the ex­otics (Amarula). This highly prof­itable com­pany will also have the lux­ury of a weaker rand to off­set in fur­ther de­te­ri­o­ra­tion in its nu­mer­ous for­eign mar­kets.

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