Seeing the wood for the trees
ABOUT A YEAR ago I picked York Timbers as one of the more interesting net asset value (NAV) players on the JSE. For various reasons York had traded well below its NAV. Recently this wood and pulp player released financial results and, even though the share price has risen strongly in the last few months, there are still opportunities.
At the start of September, the share was trading at R3.40/share and it has subsequently bounced to around R4/share. This is still a deep discount to the R6.92/share NAV report- ed with its full-year results at end-September.
The NAV is a bit skewed because of an accounting treatment of deferred tax so investors need to watch this number carefully, but there appears to be a sufficiently deep moat to suggest value.
A P/E multiple of 12 is not that cheap, but the company has aggressively reduced its expensive debt by R25m (now R54m/year) and this should decrease again on the back of good cash f lows.