As a private investor, you are really trying to catch onto the coat-tails of a proven entrepreneur and then go along for the ride. The secret is to find an appropriate entrepreneur with solid experience and then jump on board as early as possible.
The newly listed company Long 4 Life was launched by Brian Joffe, previously the Chairman of Bidvest. His long years of experience in building businesses both locally and internationally enabled him to easily raise R2bn from investors for any project that he might decide to build. More recently Joffe decided to bring in Kevin Hedderwick as Chief Operating Officer of Long 4 Life.
Hedderwick is well known for his role as CEO of Famous Brands where he built that business up from a small family business into the fast food and restaurant giant that it is today. Together these two business experts are going to decide how to use the money they have been given by investors to create a new listed business. They have already chosen their first acquisition in the form of Sorbet, which Hedderwick describes as a “lifestyle” business.
The share price chart since it listed on 7th April this year reflects the interest of the public in this remarkable management team. There is nothing else to go on. There are no financials or track record to examine. So as an investor you simply have to look at the two men involved and make a decision. Our view is that in three years’ time (an important period to hold shares for to avoid being declared share dealer), it is very unlikely that this share will be anywhere near its current price of 640c. The only real risk in a share like this is some sort of global equity melt down – which seems unlikely. Consider the shares chart so far:
There is some evidence of early “stagging”, but basically the shares price is in a waiting mode, until Joffe and Hedderwick say where they are going. A leap of faith is required – but we believe it is an easy one.