There is an easy 10% here

Finweek English Edition - - INVESTMENT - MARC ASH­TON

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

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