An elec­tri­fy­ing op­tion

Finweek English Edition - - INVESTMENT - MARC ASH­TON

THIS IS NOT a counter that will make it onto too many short­lists, but for those who en­joy small-cap in­vest­ing, this is one that might be worth re­search­ing a bit.

A rel­a­tively un­known elec­tric­ity play, South Ocean (SOH) presently trades on a price-toearn­ings mul­ti­ple of just un­der 5 times. SOH man­u­fac­tures a com­pre­hen­sive range of low­volt­age elec­tric power ca­bles and sup­plies the build­ing and con­struc­tion in­dus­try and re­lated in­fra­struc­ture projects through elec­tri­cal whole­salers and ca­ble dis­trib­u­tors.

When the fi­nan­cials were re­leased for the full year ended 31 De­cem­ber 2012, the tan­gi­ble net as­set value of the group comes in at 324c/share. For a counter trad­ing at 169c/ share, there ap­pears to be a mis­pric­ing here.

In­ter­est­ingly In­vestec As­set Man­age­ment holds 10% of the is­sued share cap­i­tal of the busi­ness.

While ARB has been grab­bing the head­lines over the last year, SOH may be a counter worth con­sid­er­ing if it can repli­cate its earn­ings go­ing into the new fi­nan­cial year.

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