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| | Wednesday 23 June 2021 | |
| | Good morning Voornaam,
To accompany your coffee this morning (or other warm beverage of your choice), I have a few stories on some of the "real economy" small- and mid-caps on the JSE.
The lead story is Omnia, the agriculture, mining and chemicals business that is finally in a much stronger cash position. Although the focus of the market could've been on the R6 per dividend that has been declared, my concern is around the R900m tax dispute with SARS and the decision made by the company to tuck this little nugget of information deep inside the long-form announcement.
Luckily, Dave Hazelwood on Twitter is an accomplished sniffer-dog and he found it before I did. He's a worthwhile person to follow on that platform.
Grindrod Limited has been on the radar of value investors for some time, cleaning up the investment portfolio and getting rid of non-core assets. The group is trading at a substantial discount to NAV and the commodity cycle is a helpful underpin for earnings. The trading update for the first five months of the year seems promising.
Another company that is putting out a more positive narrative is Curro, which suffered in 2020 as lockdown removed numerous sources of income and put parents under incredible pressure for school fees. In a shocking reflection of how bad things got under lockdown, Curro terminated around 5% of its learners at the start of 2021 due to non-payment of fees.
Then we have Hudaco, the industrial company that has a few scars from SARS (there's a song in there somewhere) of its own. Thankfully, that nightmare is behind Hudaco and the company is focused on growing its core operations. Unsurprisingly, trade over the first few months of 2021 has been much better than in the comparable period in 2020.
The latest Magic Markets episode has been popular, with Mark Tobin of Coffee Microcaps joining the show to talk about the investment opportunities in Australian small-caps. Episode 30 is a wonderful introduction to the Australian stock market and the profile of the companies on that exchange. Listen to it here.
Finally, there's an interesting piece on the ever-relevant fossil fuel policies of the world's most important countries. If you're interested in the concept of pricing carbon, be sure to check it out.
Have an excellent Wednesday!
The Finance Ghost
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| | Local and Offshore Market News | |
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| | Omnia's ominous tax dispute
Omnia's strong result and R6 dividend per share is being overshadowed by a R900m tax dispute with SARS, tucked away in the long-form announcement. Read More |
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| | Grindrod Limited's stubborn discount to NAV continues
Grindrod Limited released a pre-close business update for the five months to May 2021, with a positive narrative overall thanks to activity in commodities. Read More |
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| | Curro updates its report card
Curro terminated 5% of the learner base in January due to non-payment of fees. It's a stark reminder of what lockdown did to the middle-class. Read More |
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| | Hudaco sees a recovery in earnings
Hudaco has announced a significant jump in interim profit, as operations return to normal vs. a nightmarish base in 2020. Read More |
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| | Carbon costs and the G7's fossil fuel pledge pave path to net zero
The leaders of the Group of Seven (G7) countries agreed to stop subsidising fossil fuels within four years. Read More |
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