Stocks By Mom

 I have a confession to make…a couple of years ago, I use to give my kids an allowance via the tooth fairy. Admittedly, I didn’t know better. I, now, know what a powerful learning tool an allowance can be to my girls as they begin their financial literacy journey. Giving our children an allowance creates learning opportunities for our kids to use money in practical ways. When our children are small; money mistakes are small (buying too many sweets) when our kids are big, money mistakes get very big (too much debt). I know at which stage I would like them to learn their money mistakes, don’t you? So, let’s start them early! An allowance helps kids “plan ahead” to make the future more tangible – kids usually think in the here and the now but an allowance helps our children “practice” waiting until they have saved enough to buy what they really want.  Some pointers parents need to remember before they start to give allowances:  Allowances are a TOOL to teach kids about money...

There is a microcap listed on the JSE, that you might not know about, but you most likely handle one of their products every single day…let that sink in…Every. Single. Day.  From grocery packets, dustbin bags, cling wrap, Sellotape and pharmaceutical boxes; it is difficult to fathom how much this small cap is intertwined into our daily South African lives.  This week I am delving into Transpaco - a family run multi-million Rand business boosted with a majority black empowerment shareholder that is a trade union ( nogal! ) that quietly sticks to its knitting in the plastics and paper packaging industry. Transpaco offers the investor a great defensive play in consumer and industrial markets because even through the hardest of lockdowns, two years ago, their business did not shut down as it was deemed essential services. Not only did they NOT shut down during that period, but they were able to effortlessly add a whole product line of personal protective equipment (PPE) which pigg...

With all the drama of COVID lockdowns, China’s production backlogs, supply chain constraints, July civil unrest, a crippled Durban port, NUMSA strikes and loadshedding; Hudaco thrived! Hudaco’s 2021 gross profit margin was 37% (pre-Covid 2019 gross profit margin was 36%) yet the cost of shipping a container increased ten-fold the pre- Covid cost. Their suppliers increased prices of their products due to supply chain constraints, high commodity prices and product shortages. Hudaco’s whole supply chain faced inflationary pressure, which would have ultimately squeezed their margins if it was not for their astute management of their entire value chain to keep them “a step ahead” and  improve margins. Hudaco leveraged off their strengths and relationships which centered around their inventory management. One of their main strategies was to increase their stock levels, they did this by increasing their stock early in the year by one month of sales, this prevented stock outs and they had ...

In Greek mythology, Orion was a hunter; a very fitting name for the junior miner, Orion Minerals, as they explore South Africa and Australia in search of new mineral deposits.  Armed with new mining and drilling technology, Orion discovered one of the world’s top volcanogenic massive sulphide (VMS) base metal deposits, a copper belt in the arid Northern Cape, that has the potential to deliver 226kt of copper and 680kt of zinc from an old AngloVaal mine where gold was mined three decades ago. This is the Prieska Copper – Zinc project which consists of an underground and open pit mine.  The initial plan was to start mining the underground mine and only start mining the open pit mine in 13 years’ time.  Currently, copper prices are extremely strong, almost $10,000 per ton, due to this Orion decided to re-assess their initial plans and rather accelerate the feasibility study of the open pit mine and have an investment decision by mid-2022. If Orion decides to go ahead to star...

The trading update from ArcelorMittal, yesterday, got tongues wagging and, for once, it was for good reason. ArcelorMittal’s HEPS is expected to improve by more than 100% for the year ended 31 December 2021. After showing decade losses and crippling debt, the institutional investors tossed it in the pile of mounting penny stocks. As a retail investor, you really had to go scrounging around to find information and insight into the company, as most stopped reporting on it and previous annual reports painted a further depressing picture. It was difficult to build an investment case for ArcelorMittal, until I realised the business model for ArcelorMittal is entirely linked to the PRICE of steel. Which price of steel? Let’s not go there…it is difficult to get answers from analysts…because it is complicated.  Let’s stick to basics, Economics 101: China is the largest producer of steel.  Last year, China announced a total abolition of export rebates (13% on VAT) with effect from May ...

 We have all watched those makeover shows where some random, frumpy, fifty-year-old woman is yanked off the streets into a swanky studio, attacked by an army of stylists and emerges as a sleek, gorgeous lass. Nampak is the stock that comes to mind that has had the same lustrous turnaround even if it is still wearing a pair of spanx to contain the bulge of debt.  It has managed to cut costs, shed and sell businesses, turn a profit through the successful DivFood restructuring, capitalise on glass shortages and expand into developed markets. This turnaround has not been easy and still continues under difficult conditions but Nampak has emerged to become a better company. It may never reach its glory of becoming a blue chip again but I do feel it is a company that can still unlock some value.  Here are my insights on how Nampak has repackaged and positioned itself to tackle the new financial year: Company overview of Nampak Ltd