A tiny player ex­pands im­pres­sively

Finweek English Edition - - MARKETPLACE - *The writer owns shares in San­tova.

Re­cent re­sults show growth across all re­gions. Much of this growth was or­ganic and even the South African di­vi­sion man­aged to in­crease the bottom line.

The com­pany is also gen­er­at­ing more cash thanks largely to the off­shore op­er­a­tions and it now has just over R120m cash on hand, up 175% from the pre­vi­ous pe­riod. The mar­ket cap is only some R650m, so just un­der a fifth in hard cash. As cash was ris­ing, San­tova’s debt was fall­ing, with the debt-to-eq­uity ra­tio fall­ing by more than half.

So all round a good set of num­bers for this mi­cro-cap stock, but the mar­ket was not in­ter­ested as the stock remains stuck at around 400c. This is of no con­cern to me; at some point the mar­ket will wake up and start bid­ding the share higher. That said, it might take a while for this to hap­pen. We all love to see stocks we own mov­ing up, but some­times they re­main static and we need to be pa­tient.

I have been adding to my po­si­tion at around 400c.

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