Paladin plays catch-up

Johannesburg - Paladin Capital [JSE:PLD], which influential investment group PSG regards as its preferred investment vehicle, charged on the JSE in early Wednesday trade.

At lunchtime Paladin, boasting a portfolio of strategic stakes in roughly a dozen listed and unlisted small companies, was up 12% at 202c.

But in earlier trade the share was briefly 38% higher at 248c, while a number of trades went through at 225c. Although volumes were fairly small (430 000), such a sudden surge in price might precipitate some form of corporate action or the announcement of a major development. But market watchers largely believe Paladin's share price is merely "playing catch-up" with a few buyers enthusiastically chasing stock.

While Paladin's net asset value was reflected at 172c/share at the release of its interim report to end-August 2009, the improved market conditions could mean a much higher underlying value may now be applied to the company's portfolio.

For instance, the value of Paladin's 48.6% investment in AltX-listed FMCG (fast moving consumer goods) management specialist CIC Holdings, has increased by more than 70% since the interim reporting period.

Other listed investments like junior mining company Petmin [JSE:PET] and scaffolding specialist Top-Fix have also seen a marked improvement in share prices since August last year.

While confirmation of the year to end-February net asset value is still some weeks away, the share price surge suggests the market is expecting Paladin's investments to carry a value of between 215c/share to 225c/share.

Aside from an array of listed investments (which include Capitec, the JSE Ltd and Steinhoff), Paladin owns a handful of interesting unlisted investments.

These include private education group Curro (valued at R50m), empowerment investment group Thembeka Capital, Spirit Capital and Protea Foundry.

- Fin24.com