There is an easy 10% here
THE SMALL- AND MID-CAP market is fascinating because when liquidity dries up, it dries up drastically and very often you can find what look like “mispriced” assets simply because the market is ignoring.
I’m hesitant to use the word “mispriced” because technically the market will always be right when it comes to asset pricing.
Afrocentric Investment Corporation, a stock I’ve been quietly adding to my portfolio, has shown an interesting trend. In June I said that it was looking attractive at around the R4/ share mark. It subsequently headed up to between R4.45 and R4.65. Cheeky buyers have been getting the stock at between R4 and R4.10/share when liquidity had dried up.
I suggest you keep a bid in the market at R4/share. The fundamentals are the same – you’re buying a business on a P/E multiple of around 7 and you get 2.5% dividend yield. You get access to a great board and a business with fantastic BEE credentials and decent assets.
Afrocentric Investment Corporation