In­ter­est­ing vol­umes

Finweek English Edition - - INVESTMENT - MARC ASH­TON

LAST MON­DAY, more than 9m shares changed hands and this counter jumped nearly 40% in in­tra-day trade to 14c/share. While the Calgro M3 and RBA Hold­ings* sto­ries are sim­i­lar (see page 35), RBA is def­i­nitely less of a pretty com­pany. In­terim re­sults to June 2012 stated that TNAV was up at 14c with head­line earn­ings per share at a measly 0.44c while cash flows from op­er­at­ing ac­tiv­i­ties were neg­a­tive.

In the­ory, low-cost hous­ing is a sure thing in SA, but the chal­lenge that RBA will face is whether or not it be­comes one of those busi­nesses where pay­ments from Government trickle into the sys­tem and the com­pany con­stantly has to bal­ance cash flows. I’m a ten­ta­tive buyer here, but in­vestors might want to wait to see if the busi­ness is ac­tu­ally turn­ing around be­fore com­mit­ting to it.

*The writer holds shares in RBA Hold­ings.

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