Companies
We ignore market sentiment and look for businesses we believe are undervalued. We sell them when they reach our estimate of fair value. Here we provide our views on a selection of companies and sectors.
Articles in "Companies"
Putting heads in beds: Checking in on the hospitality sector
It has been said that travel is the only thing that one buys that makes you richer. Consumers seem to agree with this sentiment, evidenced by an increasing...
Consumer staples: Should they be portfolio staples?
Everyone is familiar with consumer staples – e.g. groceries, beverages, home and personal care items – and many have a strong affinity for the underlying...
Disney: The value of strong intellectual property in a changing world
Since March 2022, local unit trusts have been able to allocate up to 45% of their portfolios anywhere outside South Africa. The increase in offshore limits i...
Seeing the potential in Standard Bank
On various metrics, the valuations of South African banks have not recovered to pre- COVID-19 levels , suggesting there is value to be found . O f the Big 4 ...
Peering through the smoke
A lot has changed in the tobacco industry in the last decade or so. Despite the changes in what used to be a stable industry, the attractive aspects of tobac...
AB InBev: The king of beer
The market has several concerns about brewer Anheuser-Busch InBev which are currently weighing on its share price. We believe the company’s fundamentals are...
Capitec: The way to build a bank
Capitec has been an incredible South African success story in improving access to affordable banking services, and in delivering value for its investors....
What has gone wrong with Naspers?
For many years, Naspers was the star performer of the South African stock market. The onset of COVID-19 drove the Naspers and Tencent share prices to new...
Banking on green shoots at Nedbank
Siphesihle Zwane discusses the green shoots emerging at Nedbank and explains why they may reward investors who have enough conviction to stay the course.
Orbis: Global perspectives on Naspers
One of the largest positions in the Orbis Global Equity Fund is Naspers, whose key underlying asset is a 29% stake in the Chinese internet juggernaut Tencent...
Understanding the Naspers-Prosus transaction
Naspers and Prosus have announced a transaction that changes the group’s financial structure. They hope this will reduce the large discount at which Naspers...
Woolworths: Not so down under
Most of you will be more than familiar with the fashion, beauty, home and food offering of retailer Woolworths, affectionately referred to as Woolies, and on...
Glencore: Investigating the decarbonisation opportunity
In the midst of COVID-19, governments desperate to break the recessionary cycle are focusing on infrastructure programmes, with an expected uptick in demand...
To have and to hold?
If the value associated with a holding company is less than the sum of its parts, is it a worthwhile investment? Kamal Govan looks at the drivers of holding...
Naspers: It simply doesn’t add up
The discount between Naspers’ share price and the value of its underlying assets has widened further and now looks quite extreme. Being a large holding in bo...
Dialling in to the mobile network operators
MTN has underperformed the FTSE/JSE All Share Index (ALSI) significantly over the last five years. It has been one of our largest underweights compared to ou...
Reflecting on our top equity holdings
The performance of the Allan Gray Equity, Balanced and Stable funds has been disappointing over the past couple of years. Low single-digit returns from...
Prosus marches forward: What should investors be looking out for?
Naspers, the world’s sixth largest internet company by market capitalisation, will list its foreign internet assets separately via Prosus NV, a newly created...
An opportunity in television?
The Top 40 got a new member this quarter when MultiChoice was unbundled from Naspers. MultiChoice owns the dominant pay-TV business in South Africa, DStv, wi...
Our Tencent(s) on VIE structures
As at 28 February 2019, Naspers made up just over 18% of the FTSE/JSE All Share Index. Because of its dominance, including or excluding the share will have a...
An investment case for Naspers
As at 30 September 2018, Naspers made up 18.2% of the JSE. Whether you are for or against the stock, adequate time needs to be devoted to considering the...
Corporate democracy: Moving beyond box-like thinking
At the 2018 Allan Gray Investment Summit, keynote speaker Ricardo Semler challenged delegates to find new solutions to problems: “We have become box people w...
How Allan Gray values a stock
Allan Gray is a strong proponent of value investing, the mantra famously championed by Warren Buffet. Put simply, value investing is the concept of buying...
How has your investment been impacted by the fall in the price of Steinhoff?
Global retailer Steinhoff International Holdings NV’s share price had fallen 86.9% by close of trade on Friday 8 December, following CEO Markus Jooste’s...
Woolworths: Value investing in action
It can be difficult for investors to choose an investment manager when many of us seem to sound and look the same. Using Woolworths as an example, Andrew...
The benefits of being counter-cyclical in a cyclical world
“Prediction is very difficult, especially about the future.” – Niels Bohr. In cyclical industries, understanding where we are in the cycle and acting...
Barclays Group Africa: Seizing the opportunity
Earlier this quarter our clients had the chance to participate in a rare opportunity: on 31 May 2017, UK-based Barclays PLC announced the sale of 33.7% of BG...
Net1 announces Serge Belamant’s retirement
Net1 has announced that Serge Belamant will retire as chief executive officer (CEO) and director of the company at the end of this month and Herman Kotzé,...
An investment case for Life Healthcare
Recent news about private hospital operator Life Healthcare’s international investments has created negative sentiment about the company’s ability to allocat...
Commodities: Opportunity or risk?
We are ‘bottom-up’ investors who pay more attention to valuations than to macroeconomic forecasts. We do extensive research to calculate what we believe is...
Africa ex-SA Equity Fund: Finding value in Nigeria
The first quarter of the year was particularly volatile. The Africa ex-SA Equity Fund closed unchanged for the quarter, masking substantial intra-quarter mov...
Top quality
Richemont is one of the world’s top luxury goods companies. It sells watches, jewellery, pens, clothes, and even guns. Its most well-known brand is Cartier....
South African Banks: Do valuations support the risks?
There has been much volatility in the banking sector over the last few months: Barclays is exiting Africa, Old Mutual may be selling its stake in Nedbank,...
Manufacturing in meltdown
The manufacturing sector is currently in a woeful state. Simon Raubenheimer discusses why we are where we are. 'The Board of Directors has taken the decision...
The sentiment pendulum
Investor sentiment is a delicate thing, which changes with surprising rapidity. Kenyan banks… Three years ago Kenya and the Kenyan banks were very out of...
Deconstructing the investment case for property
The South African property sector has been a huge winner over the last decade, returning 22% per year compared with 18% for the FTSE/JSE All Share Index...
Platinum and palladium: Low-risk opportunities
Investing in platinum or palladium directly is taking a view that the prices of these commodities will increase. Tim Acker explains why we currently prefer...
Building confidence in construction
'Success in investing is not a question of what you buy, it is a question of what you pay.' Howard Marks Buying above-average companies at average or hopeful...
Changing the odds
Sun International, South Africa's second largest casino and resort operator, is undergoing significant change after a number of years of underperformance....
Astral Foods: Unappreciated Quality
Good quality companies at decent prices are hard to come by these days on the local market. Leonard Krüger explains the investment case for Astral Foods.
Diamonds in the rough
Small- and mid-cap companies make up 16% of the FTSE/JSE All Share Index, but 25-30% of our clients' South African equity holdings. Although many of these...
Gold and platinum mines: 'Eating sardines' or 'trading sardines'?
"There is the old story about the market craze in sardine trading when the sardines disappeared from their traditional waters in Monterey, California. The...
Standard Bank: Has anything changed?
Standard Bank is a Top Five holding in the Allan Gray Equity and Balanced Funds. Mark Dunley-Owen discusses why we believe it is an attractive investment for...
Sasol: A history of underestimation
Sasol is our clients' largest equity investment. Founded in 1950 and listed in 1979, Sasol's core business is to produce synthetic liquid fuels and chemicals...
Buy OUTsurance
In capitalism it is most often the case that competitive advantages do not last. One only needs to think about the ongoing competition between cellphone...
Insurance: better than you think
We have previously set out the reasons Sanlam has an above-benchmark position in our clients’ portfolios (see Quarterly Commentary 1, 2010). On a...
Anglo American: Getting what you pay for?
As contrarian investors we are always on the lookout for assets which we can buy for less than our estimate of their intrinsic value. As a result, much of ou...
Money for everyone
Microlending has a history that can be traced back to 3 000 BC. Throughout this period people have shown a tendency to become over-indebted, and when this...
An alternative view of commodity demand and supply
In Quarterly Commentary 1, 2011 Sandy McGregor discussed how high commodity prices are being supported by the mining sector's inability to keep pace with...
The investment case for Royal Bafokeng Platinum
On a relative basis, we believe Royal Bafokeng Platinum represents the most attractive value in the platinum sector. Upon listing, the Royal Bafokeng Nation...
You win some...
Building and managing a portfolio of investments inevitably includes shares that will prove to be winners but also those that will fail to deliver on their...
The investment case for BAT
British American Tobacco provides the rare opportunity to invest in a superior quality business in a stable industry at a discount to the average company. Wi...
Sanlam justifies heavy weighting
The recent financial crisis was a stark reminder of the impact that management has on the wellbeing of a financial services business. With complex products a...
Why Sasol is our preferred resource share
Sasol's share price has fared poorly over the past year compared to the 28% appreciation of the FTSE/JSE All Share Index (ALSI). Going forward, Sasol will be...
South African banks - Not just a bad debt story
Record-high bad debts are currently weighing on the banking sector. Typically, an industry experiencing depressed profits due to cyclical factors is a good...
