NO LONGER ANY RE­LA­TION BE­TWEEN PROFIT AND SHARE PRICE

Finweek English Edition - - Companies & Markets -

trad­ing at R50, the same as early in 2006, when the profit was 379c/share. The profit for 2009 is es­ti­mated by an­a­lysts at 541c/ share. How­ever, Craig Ven­ter’s trad­ing up­date of early Fe­bru­ary this year hinted at a pos­si­ble in­crease of 19%, or per­haps as much as 600c/share, for the year to 28 Fe­bru­ary 2009.

Not too long ago the share was still trad­ing at al­most R80. Some­times shares are too ex­pen­sive, as was the case in Au­gust 2007. Some­times shares are too cheap, as may be the case now – es­pe­cially if there’s cer­tainty about the qual­ity of the com­pany’s profit, and par­tic­u­larly its cash flow.

It’s a pity in­vestors (and I in­clude my­self ) al­ways look at the share price rather than fo­cus­ing on the bars in the

THE PROFIT OF Al­lied Tech­nolo­gies (Al­tech), where Craig Ven­ter is in the hot seat, has in­creased steadily over the past six years. That is and was qual­ity profit: full pos­i­tive cash flow from which a reg­u­lar and in­creas­ing div­i­dend was paid. The com­pany and its man­age­ment also grew along with the tech­no­log­i­cal de­vel­op­ments and fur­ther en­sured an in­creas­ingly larger por­tion of its in­come was of the an­nu­ity kind, thus reg­u­lar in­come not sub­ject to fluc­tu­a­tion.

Those are just a few of the re­quire­ments that value in­vestors look for. In fact, on any scale – from the War­ren Buf­fett model to Mot­ley Fool’s value in­vest­ments – Al­tech will re­ceive a high score.

On PSG’s qual­ity scale, Al­tech reg­u­larly at­tracts at­ten­tion with a score of 100% as a top value in­vest­ment. The share is cur­rently back­ground of this graph – bars that show the growth in profit rather than the daily va­garies of the share mar­ket.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.