AdvTech, Kumba Iron Ore
In previous years (March 2012 and again March 2014) I suggested this stock was at best a hold. While it operates in a great sector, the company just never seemed to be firing on all its cylinders. Then in June of last year there was a potential offer from Curro at 1 300c and I suggested shareholders take it if it materialised. It didn’t.
I was wrong – the stock has been flying since my hold recommendations, although AdvTech is up less than 10% since my sell suggestion of last year.
But recent results show a company that is now soaring, with tertiary doing especially well. It’s just undertaken a rights issue as well as some acquisitions and still has a pile of money and/or debt it can use for further acquisitions or to expand current properties. This expansion is particularly interesting. Education is very leveraged in that new students add income without really impacting costs and AdvTech not only has some 15% extra capacity at existing sites, but could add even more capacity with new buildings on site – which avoids the hassles of finding a site, building and starting a new school.
The stock has been flying since my hold recommendations, although AdvTech is up less 10%than since my sell suggestion of last year.