Close the gaps and beat the market to spare the heartache

Business

Close the gaps and beat the market to spare the heartache

Market value can be much less than net asset value if a company runs its offices badly and pays managers too much

Brian Kantor

Investment holding companies have long played a large role on the JSE. Two of the more important of them, Naspers and PSG, have provided spectacular returns for their shareholders in recent years.

A R100 investment in PSG in January 2010 with dividends reinvested in the stock had grown to R1,435 by late June 2019. The same R100 invested in Naspers would have done almost as well for its shareholders over the same period, having increased its rand value by 14 times.

Not all holding companies are equal. A one-time darling of the JSE, Remgro, has barely managed to keep pace with the JSE all-share index; R100 invested in Remgro on the JSE in 2010 would have grown to about R250...

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