Fund manager

Finweek English Edition - - FUND IN FOCUS - Within their broad

ap­proach, Wil­liams says that there are var­i­ous types of op­por­tu­ni­ties that tend to present in­vest­ment op­por­tu­ni­ties. “They arise for dif­fer­ent rea­sons, but we would look at them care­fully. One of th­ese has been cor­po­rate ac­tions,” he says. A prof­itable ex­am­ple of this type of op­por­tu­nity was demon­strated by Sibanye Gold, which was un­bun­dled from Gold Fields a few years ago. “The fund tripled its money by buy­ing Sibanye af­ter the un­bundling,” says Wil­liams.

He also notes that there are var­i­ous ways to pre­dict re­turns. “One of th­ese is com­pe­ti­tion the­ory. A com­pany that is dom­i­nant in a mar­ket can con­trol its pric­ing and pro­duce su­pe­rior re­turns,” says Wil­liams.

The fund bought Co­mair when com­peti­tor 1time went bank­rupt. “They were able to boost prof­its as a re­sult of this. We bought the share at R1.30 and now it’s trad­ing around R5.20/share,” he says. Like­wise, fur­ni­ture re­tailer Lewis is now well placed to grow prof­its af­ter its big­gest com­peti­tor El­ler­ines went bank­rupt.

Com­ment­ing on the gen­eral level of val­u­a­tions that Wil­liams sees in the mar­ket at the mo­ment, he says: “We think the qual­ity com­pa­nies are go­ing to have a hard time meet­ing ex­pec­ta­tions. So we have been more sell­ers than buy­ers re­cently.”

The fund is happy to have light­ened hold­ings in Medi­clinic, Wool­worths, Spar and Sa­sol, which ap­pear to be trad­ing at stretched val­u­a­tions.

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