One for the bot­tom drawer

Finweek English Edition - - INVESTMENT - MARC ASH­TON

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 Fin­ 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.

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