ANTHONY CLARK: Stellar’s enduring encore
If Stellar management want to win an Oscar, play to the crowd. Give them what they want
In a volatile market, stocks are often ignored or become paralysed due to circumstances beyond their control. These out of favour stocks then usually trade at minuscule earnings multiples or become value traps. Stellar Capital is one such value stock. In 2014 and 2015 when small caps were in vogue, it was seen as a bright young starlet, brash and vivacious, run by gung-ho corporate financiers who used highly valued paper to acquire a disparate range of assets. Stellar Capital began as an information technology business called ConvergeNet. It was acquired by a corporate crowd with the added allure of Christo Wiese behind the scenes. Many thought his touch would propel the company into a new orbit. Wiese took a 20% stake and injected into the renamed Stellar Capital a ragbag of his smaller mining and industrial assets — some mediocre. Many were re-purposed and sold off, generating some cash. With the Wiese allure and frenetic deal making and scrip issues, Stellar rose from 80c to 330c...
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