Small caps to blow your hat off

The indignity of it all. It’s bad enough to have your share portfolio swathed in red, but far worse to be dyed orange.

There was a modicum of sweet relief for the portfolio in the form of Wesizwe Platinum, which finally got its production gears grinding, and for that I am grateful.

But I am less appreciative of my wife and daughter’s insistence on eating on the move. I detest finding cutlery on the backseat and apple cores in the door holders.

This time they went way too far. I was dutifully filling up my wife’s car at a quiet service station when my meditative contemplation of swaying reeds in the nearby wetland was shattered by a forceful explosion.

My cap was blown clean off my head. Ears ringing, I sought the cause of the explosion. The service station appeared to still be standing. I jumped out the car and asked — in what might have been a mildly hysterical voice —“What the Dickens was that?”

The chaps on the forecourt looked at me quizzically and shrugged. I checked the vehicle for damage. The exterior was unharmed. Perplexed, I clambered back inside and was met with an acrid citrus aroma. That’s when I spied the plastic bottle that had once contained the orange juice that was now, in fermented form, sprayed all over the vehicle seats, floor and roof and, as

I later discovered, all over the back of my neck and head.

Speaking of blasts, the share price of Hosken Consolidated Investments (HCI) charged ahead after prime mover, major shareholder and CEO Johnny Copelyn bought a chunk of shares on the open market. Punters might initially have been disappointed by the lack of detail on HCI’s oil and gas exploration efforts in the recent financial report. But Copelyn spending R118m on HCI shares — at what some might consider already fairly elevated levels — clearly spoke volumes. At one point on Monday HCI’s share price touched R228, which meant it traded above the last stated NAV of R224.66 a share. It’s pretty rare these days to see an investment company trading at a premium to NAV. The last time I can recall it happening was with the PSG Group share many years ago.

While on the topic of incendiary share price movements, Mantengu Mining (the old Mining Restoration Investments), shifted 85% last week to touch 290c after confirmation of the commissioning of the chrome plant at newly acquired Langpan mine. The share had drifted back to 160c at the time of writing. This gives Mantengu a market value of about R250m, less than half the value placed on the relatedparty and scrip-settled acquisition of Langpan for R550m last year.

A show of confidence

Less spectacular, but still impressive, were the gains made by my favourite “above-ground miner” Insimbi. The group’s shares are up about 40% over six months, the shift justified by a solid showing for the year to end-February despite several headwinds (load-shedding, export bans and logistical challenges). The 5c a share final dividend suggests directors are confident the group can trade through the brittle economic conditions with the core metals recycling operations tapping into the green economy thrust.

CEO Fred Botha notes that the global focus on decarbonisation and vehicle electrification is supporting a recovery in copper and aluminium prices — which will boost Insimbi’s revenue and margins. Insimbi trades on a p:e of five and a yield of 5.75%. I imagine that bigger shareholders have mulled a buyout offer to take it private.

In other news, I attended the brief Capevin general meeting on Monday, which was not exactly illuminating. What I did discover is that there is a website — cvhspirits.com — which, reassuringly for an unlisted counter, has an investor relations tab.

Inevitably there was a question about the reported sale by Capevin of the Southern African distribution rights for Gordon’s Gin to Diageo. Chair Jan du Toit stressed one of the conditions for this proposed deal was approval by the newly assembled Capevin board — which would “happen in due course”. The price tag on the Gordon’s Gin arrangement will be fascinating to see, with early speculation about a number of R1bn — which would surely see a special dividend decanted.