Many investors have missed out on Discovery’s strong share price performance. Over the past year, the share is up 45% to R180. This puts the performance of Adrian Gore’s company far ahead of that of rivals such as Liberty (up 17%) and MMI Holdings (down 9%), as well as staid, established firms such as Sanlam (up 35%) and Old Mutual (up 17%). But few SA asset managers have benefited from this rise because, outside of the insurer’s main shareholder, Rand Merchant Investment Holdings (which holds 25.8%), the rest of Discovery’s shareholder register is dominated by foreign shareholders. The question is: does Discovery still offer good value for investors? Or has its major growth spurt already happened? One of the few SA funds with a weighting in Discovery of more than 5.5% is PSG Equity. Kevin Cousins, PSG’s head of research, says SA analysts tend to value Discovery by the method used to value insurance companies — its embedded value, which is a way of calculating the present value of i...

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