Finweek has previously (April 2008, August 2009 and August 2010) waxed lyrical about the value proposition in the investment company Sabvest [JSE:SBV]. One of its major attractions is the access it offers to a number of very interesting unlisted companies. In terms of straight value its 57,3% stake in specialist textile group SA Bias Industries underpins Sabvest’s portfolio, which might well explain the rather large discount Sabvest’s shares offer on its last stated intrinsic value. And although the textile sector has been getting a bad rap for many a year, SA Bias is clearly specialised enough to fend off any competition.
Sabvest [JSE:SBV] reports its industrial associates – of which SA Bias is by far the biggest component – generated combined revenue of R1,2bn, gross profits of R222m and profit before tax of R182m. Sabvest’s share of after-tax income was up 28% to R69m. A donation of R69m from its mainstay unlisted investments provides some reassurance Sabvest [JSE:SBV] isn’t taking any liberties in reflecting the value of its unlisted investment holdings at R522m. In fact, that valuation looks on the conservative side.
But here lies the opportunity for investors with the patience to snuck parcels of scarce Sabvest [JSE:SBV] shares. Intrinsic net asset value is 1230c, against a 926c share price for Sabvest’s ordinary shares and a last traded price of 800c for its N-shares.
Bids need to be carefully considered: remember Sabvest [JSE:SBV] has previously traded at discounts of more than 40% to intrinsic NAV. But there are never queues of sellers of either the ordinary or the N-shares – and to compound liquidity matters, Sabvest’s prime mover Christopher Seabrooke seemed determined last week to mop up most of the available scrip.
For those who need reminding: at the 950c level investors are paying for Sabvest’s holding in SA Bias and then getting good assets, such as Set Point, Flowmax and Sunspray, at a discount.
Its portfolio investments – which include holdings in the underrated Metrofile, Brait [JSE:BAT], Datatec and Net1 Technologies, as well as Nasdaq counters like Software Technologies, Google and Qualcomm – probably come gratis.
Sabvest [JSE:SBV] reports its industrial associates – of which SA Bias is by far the biggest component – generated combined revenue of R1,2bn, gross profits of R222m and profit before tax of R182m. Sabvest’s share of after-tax income was up 28% to R69m. A donation of R69m from its mainstay unlisted investments provides some reassurance Sabvest [JSE:SBV] isn’t taking any liberties in reflecting the value of its unlisted investment holdings at R522m. In fact, that valuation looks on the conservative side.
But here lies the opportunity for investors with the patience to snuck parcels of scarce Sabvest [JSE:SBV] shares. Intrinsic net asset value is 1230c, against a 926c share price for Sabvest’s ordinary shares and a last traded price of 800c for its N-shares.
Bids need to be carefully considered: remember Sabvest [JSE:SBV] has previously traded at discounts of more than 40% to intrinsic NAV. But there are never queues of sellers of either the ordinary or the N-shares – and to compound liquidity matters, Sabvest’s prime mover Christopher Seabrooke seemed determined last week to mop up most of the available scrip.
For those who need reminding: at the 950c level investors are paying for Sabvest’s holding in SA Bias and then getting good assets, such as Set Point, Flowmax and Sunspray, at a discount.
Its portfolio investments – which include holdings in the underrated Metrofile, Brait [JSE:BAT], Datatec and Net1 Technologies, as well as Nasdaq counters like Software Technologies, Google and Qualcomm – probably come gratis.