A sprightly twenty-some­thing

Finweek English Edition - - COVERSTORY - MARC HASEN­FUSS

Un­like for­mer col­league Belinda An­der­son – who would reg­u­larly man­age re­turns of 40%+ – I don’t seem to ever shoot the lights out. But I usu­ally tend – save for that hor­ri­ble 2008 year – to com­pile a port­fo­lio for Fin­week’s “Stocks on the blocks” team that yields a twenty-some­thing per­cent gain. That year twenty-some­thing – 27%, to be ex­act – seems a more than sat­is­fac­tory re­turn, with the JSE up roughly 16%. For­tu­nately – un­like some of my col­leagues – I had no fiz­zlers. Ad­mit­tedly, Lib­erty In­ter­na­tional was a bit of a drag this year – the flag­ging sen­ti­ment for London prop­erty and the strong rand weigh­ing heav­ily on the share price. Al­though I sup­pose I have the bid for Cap­i­tal Shop­ping Cen­tres and the spec­u­la­tive in­ter­est in Cap­i­tal & Coun­ties to thank for man­ag­ing a pos­i­tive re­turn from this in­vest­ment. Early in 2010 the sep­a­rated parts of the old Lib­erty In­ter­na­tional group were look­ing like a po­ten­tial port­fo­lio wrecker…

Last year I hoped for the strong re­cov­ery in tim­ber group York­cor and, for­tu­nately, got more much more than that. Zeder, my other star per­former, has lately come into vogue with de­vel­op­ments at Pi­o­neer Foods and KWV. Rem­gro was as de­pend­able as ever, and BAT was a stoic per­former (un­der the cir­cum­stances).

My se­lec­tions for 2010 are re­ally in­formed by the fact that I reckon this year may well be one of a fair bit of cor­po­rate ac­tion. For this rea­son I’m stick­ing with Rem­gro and Zeder. There’s no doubt is in­tent on clean­ing up its port­fo­lio and that there will be a more in­tense fo­cus on build­ing up its uni­verse of un­listed in­vest­ments. I ex­pect a few trans­ac­tions this year…

has al­ready shown its (lessthan-sub­tle) hand in shak­ing up the value laden agribusi­ness sec­tor with its in­trigu­ing stir­rings in the Pi­o­neer/KWV af­fair. Zeder may well be in for a busy year. Last year I al­luded to the pos­si­bil­ity of it up­ping its ef­fec­tive stake in Pi­o­neer by buy­ing out mi­nori­ties at Kaap Agri (the largest share­holder in Pi­o­neer). Let’s wait and see…

In terms of out­right value I had a cou­ple of op­tions to weigh up. Some of the can­di­dates in­cluded Con­sol­i­dated In­fra­struc­ture Group, Afrimat, Brim­stone, Grand Pa­rade In­vest­ments, Bowler Met­calf, Sab­vest and Sov­er­eign Food In­vest­ments. In the end I opted for punts on res­tau­rant fran­chisor

Cor­po­ra­tion and spe­cial­ist pack­ag­ing group While shaded by its more ad­ven­tur­ous coun­ter­part Fa­mous Brands, Spur Cor­po­ra­tion is a brand ca­pa­ble of churn­ing strong cash flows and dish­ing up whole­some dis­tri­bu­tions. On the other hand, Transpaco is a solid per­former that doesn’t en­joy the same mar­ket at­ten­tion as larger list­ings, such as Nam­pak and As­tra­pak. Be­cause of their value propo­si­tions it wouldn’t com­pletely sur­prise me if both Spur Cor­po­ra­tion and Transpaco were tar­gets in cor­po­rate ac­tion.

My “fling” for 2011 will be ju­nior gold miner

I’m no ex­pert on re­sources stocks and my re­sources-minded col­leagues will prob­a­bly blanch at my se­lec­tion. Still, I find the pro­duc­tion and cash flow pro­jec­tions at GoldOne rather en­tic­ing. I re­alise so much can go wrong in ju­nior min­ing ven­tures but Neal Frone­man – for­merly CEO of Ura­nium One – surely won’t dis­ap­point the mar­ket again?

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