Company Data
| Last traded |
R398.99 |
| Change |
R0.69 |
| % Change |
0.17% |
| Cumulative volume |
1.76m |
| Market cap |
R257.01bn |
| Last traded |
R342.29 |
| Change |
R9.69 |
| % Change |
2.91% |
| Cumulative volume |
2.28m |
| Market cap |
R459.67bn |
| Last traded |
R253.86 |
| Change |
R3.98 |
| % Change |
1.59% |
| Cumulative volume |
2.72m |
| Market cap |
R542.29bn |
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Johannesburg - Smart money seems to be quietly building positions around petrochemical giant Sasol [JSE:SOL], even though the counter's share price doesn't reflect this.
Since stocks hit an all-time high of R506 on May 20 2008, Sasol backers have had to make do with some indifferent performances.
While other counters rallied in excess of 30% from lows hit in March 2009, Sasol has largely moved sideways, trading between R252 and R310 a share. On Monday, the share traded at around R290.
However, earlier this month Sasol was tipped by Allan Gray chief investment officer Ian Liddle. Sasol is now the third biggest share in the Allan Gray portfolio at around 9%. It is the third biggest holding in the Nedgroup Rainmaker Fund, managed by Tim Allsop.
It has also been the largest purchase of RE:CM's funds, with R15.6m worth of shares being bought in the first six months of the year. RE:CM is another fund which specialises in value style investing.
Sasha Naryshkine of asset management firm Vestact believes Sasol will have a lot going for it over the next decade as India and China scurry for oil and coal reserves. Vestact also holds Sasol in its model portfolio.
"With its scale and technology, on the one hand Sasol is untouchable," he said.
With the company currently trading on a forward price to earnings (PE) multiple of 20 times earnings and a dividend yield of around 3%, it would be an unusual target for a value investor, yet here are three leading value managers buying the stock.
"There is nothing dramatic in our investment thesis; it's a great business currently available at an acceptable margin of safety," said RE:CM portfolio manager Daniel Malan.
"With cyclicals, it's dangerous to use PE ratios as an indicator to buy because usually the time to buy is when it they are very high, and sell when they are low" said Francois du Plessis of Vega Asset Management.
Du Plessis pointed out that the company had a strong balance sheet and was cash generative, and cautioned investors were losing patience with the company as an investment.
"Investors lose patience with Sasol but when it runs, it runs hard," he said.
This is reflected in the share movements from March 2007 to May 2008, when the share rocketed from R218 to R506 a share.
Herman van Velze, head of the resources fund at Stanlib, also believes there is value to be found within Sasol. "Our portfolio's concentrated exposure to Anglo American [JSE:AGL], BHP Billiton [JSE:BHP] and Sasol remains intact as we continue to see exceptional earnings growth and further expansion of lucrative projects," he said.
- Fin24.com