Mediclinic appears to be on its way out, with an offer from Remgro and the family behind Mediterranean Shipping Company. PSG collapsed its holding structure, unbundling most of its assets to shareholders. The latest names to be added to the list are Massmart and Grindrod Shipping.
Walmart filed an offer of R62 per share for Massmart, a dramatic 68.7% premium to the 30-day volume-weighted average price.
Taylor Maritime Investments Limited (listed in London) has made a non-binding indicative proposal to acquire all shares of Grindrod Shipping that it does not already own. The indicative price is $26 per share.
Buy the shovel, not the gold
Gold diggers have been a disappointment to many, with the price of gold not rising fast enough to offset inflationary pressures on input costs. In such an environment, operational excellence is key to achieving decent results.
Harmony Gold demonstrated what happens when operations don’t go well. Revenue was up 2% in the year to June 2022, but production profit fell 20%. Operating cash flow is down 55%.
When investing thematically, the old adage of “buying the shovel in the gold rush” has particularly applied over the past year. In this case, you wanted the drill rather than the shovel. Master Drilling grew its overall earnings per share (Heps) by 55.5% in the six months to June 2022, so earnings support share price growth of nearly 50% over the course of the year. past year.
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Home improvement was so 2021
Cashbuild will confirm that people are going on holiday rather than renovating their homes, with income down 12% despite sales price inflation of 7.2% in the financial year ending June 26, 2022.
This trend is also visible at Trellidor, with a 1% drop in turnover in the financial year ending June 2022. This would be manageable if steel prices had not increased by more than 80% during of the past two years. The final stab at the heart of the income statement was an employment tribunal judgment which led to a provision of R32.1 million.
What is the real value?
Even after posting surprisingly strong results, Truworths’ share price is up less than 10% this year.
The market treats Truworths as a value stock, focusing on the dividend yield and assuming that any growth in the share price will be modest. This explains why the dividend for the 53 weeks ended July 3, 2022 of 505 cents per share equates to a strong dividend yield of 8.7%.
Some question the validity of this thesis, since Truworths managed to increase sales by 6.6% on a comparable 52-week basis and Heps by 42.4%. While there is clearly a Covid-related base effect here, the gross margin expansion has been impressive.
If it can offer another decent period of growth, the best selling item at Truworths might be the shares themselves. DM168
After years spent in investment banking by The Finance Ghost, his mother’s dire predictions have come true: he has become a ghost.
This story first appeared in our weekly DM168 newspaper, which is available nationwide for R25.