I notice that the directors are putting their money where their mouths are by taking up offer to purchase at R16.50 a share. And we're not talking pocket change either. Purchases, especially large ones, are a positive sign in my book. What do others think?
Their own stated NAV is 1650 post rights, so no real discount there. My real question regarding BAT, is its new strategy. They raised R6bn so that they can transform into an investment holding company. This means that their entire dividend strategy will change - as they will now be reliant on the cash flows from their holdings rather than the cash flows from the funds they administer. Maybe the directors see a substantial discount to Pepkor & premier foods? I for one don't know what to make of Brait, so I don't track it anymore
Ja definitely a change in strategy / business model. A very different business model but not necessarily better or worse. Obviously if it was a pure dividend play for you then you may lose interest. However my point is that the directors are putting their money behind the new model. If a director commits R9 million or R14 million then that's not something that is just a token gesture. That tells me that they are confident that they will be making money.
one only have to look at the lack of qualtiy of the exchanges on this forum sinse your left to realze what a fantastic jod you did as a net nanny..this forum has unfortunatly desolved into a mud wrestling wrink only without the bikini's and beer
Thanks for the reply - you make a fair point. For me not looking at the numbers in isolation would include looking at things like the track records of management, the quality of the businesses being acquired, the alignment of management with shareholder interest (which includes director dealings), market position (size, access to opportunities, etc). Due to the change in business model the financial results for the old business model can't give an adequate indication of the new model's profitability.
I really don't mean any offence but that's not the most useful comparison. SacOil seems to have no positive track record, dividend history, etc. I.e. it seems to be a highly speculative venture at present. Whereas Brait has a previous track record in private equity (to the point of being cash and dividend generative) and Pepkor and Premier Foods are known, well established, entities. Not saying that the new arrangement is all roses and sweet smelling perfection but I do see a lot of value in it. Then again I am a fan of foodstuff producers and also tend to like the retailers focused on the lower end of the market (e.g. Pepkor and Mr Price). Please by all means criticise the negatives (immediate or potential) that you see but you need to add a bit of meat to your answers so that I can understand your view point. I really want to see this part of the equation in addition to positives (some of which I've mentioned).
Sorry, my comment was more tongue in cheek with regards to using a measure like directors dealings as a pure indicator. But i know you are not doing that with BAT. Don't get me wrong, I have nothing against this company - it is just that I was planning on treating it as a dividend play, now it falls into a completely different investment class, and I will have to study pretty closely to see what value it offers
No worries. I also used to treat Brait mostly as a dividend play. I believe that will definitely have to change as the new model will also be focusing on investing capital in private business with an eye to growing capital.