8.5% return before you start
I MENTIONED ISA Holdings a few weeks back as one of those counters that I’m adding to my share portfolio. The recently released full-year f inancial results reiterate my view that this is a stock that’s worth holding and is ideal for small retail investors as it’s off the radar of most mainstream asset managers.
On 52c/share you are basically getting a business that trades on a 10 times earnings multiple and an after-tax yield of around 8.5%. Considering how difficult it is to find quality businesses delivering a real return on capital, this is a compelling argument before you even begin to unpack the operating environment. IT security is a big field and you only have to be the IT Manager for the South African Police Service (SAPS) to know how important it is to manage this part of your business.
Overall ISA’s costs were well managed in a tough environment. A lot of its business should be stable annuity income and there are worse places to put your money.
* Author holds shares in ISA