rei is not exclusively a holding company, "We had previously written about Reinet Investments SCA (REI) as an asset play, and perhaps a preferred entry to exposure to British American Tobacco (BAT). The group holds around 4 percent of BAT and a fair whack of cash. Besides BAT and cash, the company also holds some `growth' assets valued at _44.4m. Even if we discount these shares, Reinet is still showing excellent value. We have had Johan Rupert publically intimating that NAV of the locally traded REI is somewhere between 1300 and 1400cps. The group was established only established in late October 2008 and lets be honest, the unbundling of Compagnie Financière Richemont SA and the secondary listing of British American Tobacco (BAT) on the JSE was all pretty complicated. But, Reinet Directors have not been sitting on their hands since listing. It recently announced an agreement with the management of Lehman Brothers Merchant Banking to buy part of two of the division's private equity fund. Let's face it, now is a good time to be sitting on a few billion Rands in cash. The primary listing of Reinet is on the Luxembourg stock exchange, while the shares (or depository receipts as they are called) represent 1/10th of the Reinet share value. This is similar structure to the way Richemont traded on the JSE. There is obviously some currency risk in REI, as our Rand has been quite strong and we have seen Pound Sterling take a hammering over the past few months. Should this trend continue, instead of seeing REI increase, it may still weaken a little in Rand terms. Reinet traded at 960cps earlier today and we would rate it as an asset-play and a share for longer-term portfolios."
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