House View: Calgro M3, Shoprite Holdings
I sold the majority of my Calgro M3* holding in December 2015 in the days after the firing of then finance minister Nhlanhla Nene. But I erred in that I only sold some 80% of my holding.
This was a major error, not because the price has now collapsed, but because as investors we need to be decisive and I was not. Rather, I was trying to have the best of both worlds, lock in profits and hold on hoping for more.
The latest results for Calgro M3 have a lot of moving parts, with new IFRS rules hurting. But there is a lot more that is also hurting the stock. While the land it owns is worth some 950c/share, the group’s solvency and liquidity is looking bleak, debt covenants are close or already in breach and illegal land invasions are costing them time and money.
This stock will probably soar again, and I may rebuy at higher prices, but for now I am being decisive rather than dithering, as I do not see the trigger that will see it moving higher. ■