Small Talk Daily Page 3

Small Talk Daily Page 3
9/8/2014
Small Talk Top 5 stocks for 2014
Month 8 review of performance
On January 6th I chose my ‘SmallTalk’ Top 5 high conviction stocks for 2014. Only a regular basis, this
analyst, likes to benchmark his performance. My own self-imposed rule is if I chose a stock for 2014, it’s in
for the entire year ‘warts n all’ no chopping and changing. Below are the current performance of the top 5
since chosen on January 6th and their respective movements versus the JSE indices I track.
In its first month - in a long year ahead, the Top 5 portfolio, having at one stage early in its release recorded a
gain of 40% - the portfolio has slipped back mid-year but continued to mostly exceed the two JSE benchmark
indices I track. In the past weeks, a recovery from unwarranted weakness has seen CSG Holdings move
higher and perennial favourite CIL continues to remain firm as the market awaits the YE trading update.
Torre Holdings has also perked up with whispers of ongoing deal discussions in this fast growing industrials
mini-conglomerate. The two best features have been Hudaco, which has been lagging for most of 2014. The
recent – and largest deal – to buy Partquip for R550m cash perhaps indicates the company is focussing (now)
more on its growth and development under the new CEO, rather than battling the on-going SARS tax issue.
The sparkling performer has been ConvergeNet Holdings, a stock I selected as my ‘spec buy’. Today, a SENS
announcement stated that a new investment holdings path was being taken by CVN with Christo Wiese’s
private interests via Titan – selling its stake in Digicore for a large stake in CVN and gladly accepting CVN
paper at 200cps as did all the deals associated with the new direction. Perhaps, CVN, to be renamed and its
JSE listing moved may see more ‘mover and shaker’ deals come its way. I’m happy with the 80% return YTD.
My top 5 for 2014
CSG Holdings
Consolidated Infrastructure Group
Torre Holdings
Hudaco* (inc dividends)
ConvergeNet
Average performance of top 5 in review
Benchmarks
JSE Small Cap Index
JSE Mid Cap Index
Jan 6th
174
2280
190
10500
100
08-Sep
212
3115
285
10100
180
% Chg
21.8%
36.6%
50.0%
0.6%
80.0%
37.8%
50106
60192
56115
67793
12.0%
12.6%
In 2012 my Top 5 generated a cumulative return of 28%, exceeding JSE Small Cap & Mid Cap benchmark.
In 2013 my Top 5 generated a cumulative return of 40%, exceeding JSE Small Cap & Mid Cap benchmark
Performance Month by Month
40
% return
30
20
10
0
2014 % Return
Jan
25.2
Feb
20.9
March
25
April
27.4
May
20
June
5.9
July
22.7
August
32.3
Sept
37.8
Anthony Clark
Financial & Industrial Small & Medium Market Cap Analyst
Food Producers & Agriculture Analyst
(office) +27-21-481-6225 (Mobile) +27-83-300-7009
[email protected]
Follow me on Twitter - SmallTalkDaily
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