Opening bell: feeling for a pulse
It’s a morbid business, looking for lively returns in left-for-dead investment companies. Dig in the right spot, though, and the patient investor could carry off a coffer of cash rather than a coffin
BUY: Stellar Capital PartnersShare price: 55cJSE code: SCP At the time of writing Stellar was trading at a discount of more than 50% to its sum-of-the-parts intrinsic value of 113c/share — a calculation that took account of the latest share price of the investment in JSE-listed Torre Industries (88c). Such a discount may suggest questionable underlying investments or awful management (or both). Frankly, Stellar has two solid assets in fund manager Prescient and security technology company Amecor — the combined value of which easily exceeds the share price. The major stake in Torre is a drag, but with new management in that firm, a turnaround is not impossible. In IM’s opinion, management needs to extract the underlying value for shareholders because Stellar has no rationale for continued existence as an investment entity. One might imagine cash-flush investment firm Sabvest bidding for the stake in Torre — especially as it owns a significant minority stake in the business and has ex...
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