One for the bottom drawer
RECENTLY ANDREW Dittberner from Cannon Asset Managers wrote an interesting opinion piece where he looked at the cyclicallyadjusted price:earnings (CAPE) ratios for various JSE-listed companies and asked whether there may be a bubble forming on the bourse (visit Finweek.com for the full article). Using this methodology, Dittberner identifies shares that are ‘cheap’ and ‘expensive’, and one of the shares with the best CAPE ratios is niche banking group Sasfin.
At the moment you can buy Sasfin on a p:e of 10 and a dividend yield of 3.7%, which is ARGENT INDUSTRIAL very attractive relative to other banking peers. It also fills a niche segment in the economy as it funds entrepreneurs and the group has the luxury of being picky about the clients it funds.
Sasfin recently updated the market with its capital adequacy report and gave 29% for Sasfin Holdings and 23.8% for Sasfin Bank – this is well above the 9.5% that is required by regulators. Sasfin offers cautious management, a deep moat for security and a sound long-term investment for patient investors who are not after any fireworks.