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Werner are you tempted to buy more Grindrods today or is it still too early.

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stores
Super Contributor
I know that trying to catch bottoms is risky but after yesterdays free fall it is really tempting. Your view would be appreciated.
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9 REPLIES 9
richardw
Super Contributor
Asking the wrong person. With Werner there is no bad time to buy GND!
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Not applicable
With Skaaptjop too, there is no bad time to buy when prices are at this level. Is there downside risk, absolutely - GND could easily fall another 20%. Its PE is still around 7 or 8, and my prognosis is for flat earnings at best this year (see some of my previous posts. However, where it takes a knock on shipping, its other divisions are growing stronger every year - and that is why I believe that GND is a good buy - because shipping will pick up again - maybe next year, maybe the year after, and GND won't post a loss (their shipping contracts in 2010 puts them firmly in the black). So you could wait for it to fall further, but hten you run the risk of missing out at this level. Me, I am happy with these prices, so I have added - but not the full allocated amount I have put aside for GND.
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Herms
Contributor
I agree with skaaptjop. The core fundamentals of the business are still solid and mr market is being irrational again with these prices. According to my valuation, the price per share is ridiculously low and imo one should be looking to buy at these levels.
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Not applicable
Hi Herms, interested to hear how you are evaluating this share. Care to share your thoughts on this?
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Herms
Contributor
Hi skaaptjop. I studied this one for quite a while. I took quite conservative growth rates as I don't think that we would be seeing levels of 2-3 years ago again all to soon. But what Grindrod has done is that they have developed quite the sturdy balance sheet. They are really well buffered to face risk. Also as stated by the company they are on the look-out for assets to acquire.(Ex. Fuelogic)Yes this won't have a huge effect on Grindrod but with each acquisition the book value of the company increase and your are paying even less for their assets.I'm of opinion that higher growth levels will be returning correlated with increasing confidence in the recovery. How long this will take, nobody can tell you but I think that if you buy this company with a long term outlook you won't be dissapointed and to make tremendous long term gains through market value growth as well as dividend growth can be expected.Their business is a key component of the recovery and of further economic growth. All in all I think this company has a really secure future as their business will still be needed ten years from now and I think that the managers are competent enough to keep up with changes in the market.
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theyoungster
Super Contributor
I also do like a company with no debt, cash cow, well positioned,, but it is a buy and hold and hold and hold...collect dividends,collect some more dividends and hold and hold and hold and collect even more dividends :-) heehee
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Not applicable
more pain coming chaps,.. watch the skouspell'n rukkie verder,..
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Werner_1
Super Contributor
Guys, sorry i was not online for the past 2 days - busy with some very interesting stuff - but i agree with Skaaptjop, GND is a very good business, but the time right now is very volatile and more fluctuations is possible, however these levels are really good entry points, but patience is needed to really benefit from the future uptrend - remember this company follows economic growth - that hasnt really changed in the past year, still waiting for true recovery to come... I havent added recently, but thats because i dont want to over-expose myself to one company, its already one of 2 largest positions in my portfolio.
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stores
Super Contributor
Thanks Werner and all for inputs. I will probably buy some on Monday.
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