Hid­den value

Finweek English Edition - - INVESTMENT - MARC ASH­TON

THE AFRO­CEN­TRIC graph over the last month makes for sad read­ing. Es­pe­cially if you are the Ed­i­tor of Fin­week and keep telling peo­ple that the in­vest­ment case for this com­pany is sound.

At R4/share (where the counter trades at the time of writ­ing), 19% of the value is made up in cash and the 15c/share div­i­dend. Im­por­tantly, Afro­cen­tric car­ries this div­i­dend up un­til Fe­bru­ary 2014, so fac­tor that into your cal­cu­la­tions. The earn­ings and fully di­luted head­line earn­ings make Afro­cen­tric a bit of a night­mare to value but as of right now, you’re ac­tu­ally pay­ing R3.10 for 76c/share in earn­ings, which puts the busi­ness on a P/E of 4. It’s a bit of a hack rea­son due to a num­ber of fac­tors, but none­the­less it high­lights that there’s value here. Yes, I’m talk­ing about my book, and yes, I’m go­ing to be buy­ing more.

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