Stock Watch Thread
(02-17-2017, 03:16 PM)Groovy Wrote:
(02-17-2017, 08:31 AM)Spreadsheet Ranger Wrote:
(02-17-2017, 08:06 AM)Purply Wrote: Any more news about Pembury Group Limited, when the listing will take place in February? Will there be an IPO? Something?

I have not heard anything through the grapevine yet, but will keep an ear out. 

@Groovy With Kaap Agri listing now I see Zeeder's price is already up, I wonder in this case if it would be wise to go to Zeeder or directly to Kaap Agri?

I think Kaap Agri is around R3bn market cap so definitively not a small company by any means imagine now when they list.

Then this Murray & Roberts thing is bothering me, because if there is a sens announcement which there will be I am sure of it, then the JSE will just play it off like nothing dodgy has happened.



There is no reason for that jump to have happened unless someone knew something the public does not.

@Spreadsheet Ranger R3bn market cap they won't come cheap, what took them so long to get on the main board or why list now after being an O.T.C share for so long

As for Murray and Roberts, only time will tell because we all know the JSE won't.

Right so Kaap Agri, I do not know how corporate wise, but my family are well connected there and I was always under the impression they liked the freedom and no red tape and regulation that plus the fact that they are not struggling at all from what I always remember. Good management imo.

I will probably buy some at the IPO for my long term hold.

As for Murray and Roberts it seems coronation dropped all their shares.
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(02-17-2017, 03:36 PM)Spreadsheet Ranger Wrote:
(02-17-2017, 03:16 PM)Groovy Wrote:
(02-17-2017, 08:31 AM)Spreadsheet Ranger Wrote:
(02-17-2017, 08:06 AM)Purply Wrote: Any more news about Pembury Group Limited, when the listing will take place in February? Will there be an IPO? Something?

I have not heard anything through the grapevine yet, but will keep an ear out. 

@Groovy With Kaap Agri listing now I see Zeeder's price is already up, I wonder in this case if it would be wise to go to Zeeder or directly to Kaap Agri?

I think Kaap Agri is around R3bn market cap so definitively not a small company by any means imagine now when they list.

Then this Murray & Roberts thing is bothering me, because if there is a sens announcement which there will be I am sure of it, then the JSE will just play it off like nothing dodgy has happened.



There is no reason for that jump to have happened unless someone knew something the public does not.

@Spreadsheet Ranger R3bn market cap they won't come cheap, what took them so long to get on the main board or why list now after being an O.T.C share for so long

As for Murray and Roberts, only time will tell because we all know the JSE won't.

Right so Kaap Agri, I do not know how corporate wise, but my family are well connected there and I was always under the impression they liked the freedom and no red tape and regulation that plus the fact that they are not struggling at all from what I always remember. Good management imo.

I will probably buy some at the IPO for my long term hold.

As for Murray and Roberts it seems coronation dropped all their shares.

@Spreadsheet Ranger I like the agriculture sector, food will never run out of style, I need to look into this company.

(02-17-2017, 08:09 PM)Groovy Wrote: @Spreadsheet Ranger I like the agriculture sector, food will never run out of style, I need to look into this company.

I agree with you there, food is a good bet for a long term investor. Hence why I love Shoprite a lot too. Not exactly the same, but still.

Anyway Kaap Agri are very nicely diversified and the people are very nice it is a very person centred company.

[Image: PflzQ90.png]
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What is their listing date?

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(02-18-2017, 07:10 AM)greglsh Wrote: What is their listing date?

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I have no idea. I'll keep an eye out.
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This weeks expected results:

JSE Finance Forum Attachment - Filename: 2017-02-20_8-38-50.jpg   
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(02-17-2017, 09:04 PM)Spreadsheet Ranger Wrote: I agree with you there, food is a good bet for a long term investor. Hence why I love Shoprite a lot too. Not exactly the same, but still.

Anyway Kaap Agri are very nicely diversified and the people are very nice it is a very person centred company.

[Image: PflzQ90.png]

@Spreadsheet Ranger I didn't know they were this diverse, I really like them more, they'll be a hit on the mainboard

(02-20-2017, 09:41 AM)Groovy Wrote: @Spreadsheet Ranger I didn't know they were this diverse, I really like them more, they'll be a hit on the mainboard

I think so myself!

I am a bit biased of course since I have used them since I was a small child both my dad and Granddad only buys at the local Agri.

It's a very peoples place, personalized service, local. Just a heartwarming feeling when you shop there.

From a business perspective they are expensive as hell so I trust there are good margins thus good stock to be a shareholder of.
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Steinhoff International Holdings N.V.                Shoprite Holdings Limited
(Incorporated in the Netherlands)                    (Incorporated in the Republic of South Africa)
(Registration number: 63570173)                   (Registration number: 1936/007721/06)
Share Code: SNH                                             JSE Share Code: SHP
ISIN: NL0011375019                                      NSX Share Code: SRH
("Steinhoff")                                                    ISIN: ZAE000166997
                                                                       ("Shoprite")


WITHDRAWAL OF JOINT CAUTIONARY ANNOUNCEMENT

Shareholders of Steinhoff and Shoprite (together “the Companies”) are referred to the joint announcement of the Companies on 14 December 2016 (“the Cautionary Announcement”), regarding the negotiations between the Companies, initiated by the Public Investment Corporation SOC Limited (“PIC”) and Titan Premier Investments Proprietary Limited (“Titan”) as the largest shareholders of the Companies.

The Cautionary Announcement dealt with the potential sale of Steinhoff’s Africa retail assets to Shoprite (“the Proposed Transaction”), as well the possible exchange by the PIC and Titan of their Shoprite shares for Steinhoff shares at an “to be agreed” ratio (“the Share Exchange”).

Shareholders of the Companies are hereby informed that the Companies have decided to terminate their negotiations related to the Proposed Transaction as the PIC, Titan and Steinhoff could not reach agreement on the exchange ratio that would apply to the Share Exchange.

The Proposed Transaction was investigated and analysed by the respective management teams of Steinhoff and Shoprite, and although the Proposed Transaction presents exciting opportunities for the Companies and their respective management teams, the fact that the relevant parties could not reach an agreement in respect of the Share Exchange resulted in the negotiations being terminated.

Accordingly, shareholders of Steinhoff and Shoprite are advised that caution is no longer required to be exercised by shareholders when dealing in their Steinhoff and/or Shoprite securities.


Stellenbosch and Cape Town
20 February 2017


Financial Adviser and Transaction Sponsor to Steinhoff Rand Merchant Bank (A division of FirstRand Bank Limited)


Sponsor to Steinhoff
PSG Capital (Pty) Ltd


Financial Adviser and Transaction Sponsor to Shoprite
Investec Bank Limited

Sponsor to Shoprite
Nedbank Corporate and Investment Banking


Legal Advisers to Steinhoff
Cliffe Dekker Hofmeyr Incorporated
Girard Hayward Incorporated
Linklaters LLP


Legal Advisers to Shoprite
Werksmans Attorneys

Date: 20/02/2017 10:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').  The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,  indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
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The JSE is adding another player in the fishing industry to compete alongside Oceana for the favour of investors. Premier Food and Fishing ("PFF") is currently owned by African Equity Empowerment Investments (AEEI) and 45% of the stake in PFF will be up for subscription to the market at R4.50 per share. This should raise around R526.5 million in new capital for the business, and new shareholders will be hoping that this funds a rosy growth strategy. The expected listing date is 2 March and it will trade under the stock ticker "PFF".

Every time a new company decides to dip its feet in the public sector, there are a few questions that need to be answered satisfactorily to be surer that you are not just throwing money in the water. One of those questions is: can this company grow its revenue?

Catch quotas could limit growth...

In the fishing industry, you will always be subject to the catch quotas that are allocated to companies, and this could limit the company’s upside. A company can only grow as fast as the quota of fish it is allocated and PFF is no different, operating at half capacity in some cases due to a limited number of catch it can haul out of the water. PFF is trying to increase its quota, but to do that it needs to take some market share away from the other players in the market, including Oceana, that dominate the quota allocation in South Africa.

Being the largest black-owned and managed food and fishing company in South Africa will certainly benefit PFF in its application for larger quotas. However, the competition is tough as Oceana also holds top empowerment credentials, winning the most empowered company award in 2014 and 2015 (a title that PFF took from them in 2016). In summary, the growth in quota for PFF is not likely going to shoot the lights out.

... but farm production could bypass quotas 

A potential solution is producing from farms where there is no quota system. PFF already owns a successful abalone farm and you can be sure that some of those IPO proceeds will be allocated to expanding this project.

You might think that farming is more expensive than simply riding out to sea to make the catch, but PFF’s abalone farm runs at a 35% net profit margin and after the expansion it could be as high as 50%. There is also no shortage of demand for the top-quality abalone that South Africa produces, especially from Far East Asia.

So why does AEEI want to sell PFF? 

The PFF story is starting to look like it has some potential, but if the pie is delicious then why is AEEI cutting off a big slice and handing it to the market? The company runs with no debt on its balance sheet, meaning there is plenty of room to borrow capital for expansion instead of going to the public.

One often cited reason is that the owners are looking to cash in their chips and Vice-Chairman, Khalid Abdulla, echoed something along those lines when he said that the shareholders want a value assigned to their holding with more liquidity. Management seems very debt averse and could be knocking on the door of investors again in the future, especially when you consider that management wants to allocate the proceeds from the IPO within the first six months. As a shareholder, you do not want to constantly be on the dilution side of rights offers.

PFF faces notable risks 

Finally, you want to be looking at the risks that the business faces, and there are some notable ones. The company generates 70% of its revenue offshore through food exports, making it a good rand hedge, which naturally goes hand in hand with large currency risk (and the Rand is one of the most unpredictable currencies on the planet).

A quarter of the company’s exports go to the US and we all know that under a Trump administration there is very little certainty in terms of trade. Fortunately, the US is a large importer of seafood and the risk of losing this business is small, but could have catastrophic implications for PFF if it materialises.

Conclusion: Is PFF a risk worth taking? 

Considering all the factors, should you be buying into this business? The company will trade at a Price-to-Earnings ratio of 13.6x at the R4.50 offer price, and using the company’s projected earnings for the period ended August 2017. That is slightly cheaper than the 16.5x PE ratio of Oceana, its most direct competitor on the JSE main board.

A concern could be the liquidity of PFF’s shares as the company will start off with a market cap of R1.17 billion (Oceana R16 billion) and liquidity is certainly your friend during a period of peak geopolitical risk as we are seeing in 2017.

The price is not too high and the growth story over the next three years doesn’t look bad, but beyond that there is not much to get excited about. And then there are the risks that the company faces that are more industry-specific rather than company specific.

PFF is perhaps not the diamond in the rough that the market is looking for, and within an industry where even Forrest Gump can enter the market, you might be better off putting your money in another sector; or at least with the company that is currently king of the mountain.

Ian Stiglingh
Quantitative Investment Analyst 


Quote:Ian Stiglingh is a full time quantitative analyst, responsible for research of equities across all industries. Ian completed his degree in Mathematical Science in 2013 and his Honours degree in Financial Risk Management in 2014, both at the University of Stellenbosch. During his studies, Ian worked as an intern at Old Mutual Actuaries & Consultants as well as J.P. Morgan in Johannesburg, and is currently a CFA candidate
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02/22/2017

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02/23/2017

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Please JSE:AXL come on. Give me 80 cents. You can do this.
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(02-24-2017, 10:17 AM)Spreadsheet Ranger Wrote: Please JSE:AXL come on. Give me 80 cents. You can do this.

Who are the HATERS holding it back now.? Let them Free the Phoenix, and let it fly!!






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