Ecsponent wins

READER’S CHOICE: SEE THE TOP 10 STOCKS

Ecsponent was the best-performing share in Moneyweb’s stock pick competition last year. The small-cap financial services business jumped 177%, from 13c to 36c per share.

The stock pick competition, which has been running for more than a decade, offers the Moneyweb community a chance to show off their stock-picking skills. It is an informal competition, with no prizes other than bragging rights. At the beginning of the year, each entrant chooses one JSE-listed company. The best performer for the year wins.

The winning stock was chosen by reader Randall Williams.

The table shows the 10 top-performing picks from Moneyweb readers last year.

With a market value of R389 million, Ecsponent is off the radar of most institutional investors.

Ecsponent has raised nearly R1 billion by selling preference shares to retail investors. Moneyweb The majority of these shares, worth R582 million, pay a return of 70% after five years, or 12.5% a year. The price suggests the investment is riskier than most.

Ecsponent has two major assets on its balance sheet. The first is an investment in Frankfurt-listed MyBucks SA. MyBucks’s CEO is Dave van Niekerk, former CEO of Blue Financial Services.

The MyBucks investment was worth R233 million on March 31, 2017. Today it is only worth about R127 million.

The other asset is loans to the value of R749 million that it has advanced to businesses. The loans range from between two to five years and have fixed interest rates of between 24% and 30%. Again, the interest rate suggests the risk of default to be higher than average.

Ecsponent’s auditors are Nexia SAB&T. Its non-executive directors are Richard Connellan, George Manyere, Keith Rayner, Brandon Topham, Patrick Matute and Willem Oberholzer.

Rayner, Oberholzer and Topham are Saica-registered chartered accountants.