Wait­ing for num­ber 1

Finweek English Edition - - INVESTMENT - TANDISIZWE MAHLUTSHANA

AF­TER A DIS­AP­POINT­ING earn­ings fore­cast warn­ing, I sus­pected that strate­gic pri­or­i­ties go­ing for­ward would in­clude a clearly de­fined Africa plan when the Wal­Mart-owned re­tailer f in­ally re­leases its set of f inan­cials for the in­terim pe­riod to June 2013.

While min­imis­ing op­er­at­ing costs re­mains an im­per­a­tive, es­pe­cially in the cur­rent mar­ket, in­vestors are also look­ing for growth.

The planned 67% stake ac­qui­si­tion in Kenya’s fourth-largest re­tailer, Naivus, which also plans to ex­pand into other African coun­tries, in­clud­ing Uganda and Tan­za­nia, is an en­cour­ag­ing move.

But I still think we need to see a vi­sion that will take Mass­mart to the num­ber 1 spot as dis­trib­u­tor of con­sumer goods in Africa.

The share is fairly ex­pen­sive at R152 on a price-to-earn­ings (P/E) mul­ti­ple of 28 times. But there could be a buy­ing op­por­tu­nity for some pa­tient in­vestors as Mass­mart has come down from a peak of R205 in May this year.

AFROCEN­TRIC IN­VEST­MENT COR­PO­RA­TION

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