Remgro and Reinet are two investment companies controlled by the Stellenbosch-based Rupert family. IM reckons their performances in 2018 could be markedly different. Aside from sharing the same controlling shareholder, there are a number of similarities between the companies. Both of their share prices reflect a significant discount to the intrinsic value of the underlying investment portfolio. Deal flow is slow and the portfolios are managed conservatively. Both companies have a diversified portfolio — but both also have one large investment that is far bigger than the other portfolio components. The major differences are that Reinet is primarily focused offshore, whereas Remgro has a distinctly local bias (albeit with some rand hedge attributes), and Reinet pays an annual dividend that is not exactly generous, while Remgro pays (growing) dividends twice a year at a fairly decent yield. At this juncture, IM would prefer to go short on Reinet, even though the firm is structured as a...

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