Alert Steel (AET) has been undergoing a massive turnaround operation (Alert Steel's Turnaround Plan) which has included disposing of underperforming units and businesses.
On the other hand, BSI Steel (BSS) has been doing pretty well, considering the environment (BSS, BIK, ELI and New Website).
What has just been announced is that Alert Steel will be selling its Klerksdorp branch to BSI, as Alert Steel feels that this unit "...is not producing the returns required...", while BSI is buying the unit for c.R8.2m because it believes its extensive product range will add value to this branches operation.
Alert Steel appears to be focusing more and more on the retail sector, particularly giving its strategy of rolling out basically mobile stores in "express containers" into the rural areas. On the other hand, BSI seems focusing more into industry and mining and on exports into Africa.
BSI's share price is flat for the last twelve months while Alert Steel's is down 80-odd-% over the same time period. I must say, I tend to agree with the market on this one and I think BSI is better run, better positioned and better financed for a long-term out performance.
Moving onto Ansys (ANS), this little engineering counter has long been one of my riskier punts (and, indeed, I hold it in my own portfolio).
Unfortunately, the surprise (and it was a surprise, as I was spoke to him no less than a week before the announcement and he gave no hint at it at all!) departure of Allan Holloway as Ansys's CEO has perhaps tainted the counter in the short-term. Maudestreet.com has a good interview with him where, basically, he explains how his really an entrepreneur and company-builder and that is why he left Ansys for what is essentially a startup business.
Ansys has now thrown another curveball into the market, having just announced that "...the Board of Ansys decided to appoint external consultants to assist with the restructuring of the Group. It is expected that the restructuring process will be completed within the next two months."
I read this as saying: "expect retrenchments, once-off costs and perhaps a disposal of a business or two"...
This now adds further uncertainty to Ansys's future and it is becoming increasingly opaque as to where the Group's strategic direction will settle. That said, there is inherently valuable IP in this business, so I will not be selling my little stake any time soon.
Moving from IP to just, well, P. In this case, 'P' stands for Property and it is belonging to the eternally struggling The Don Group (DON).
The Don Group has long been a public secret of an asset play, as although its hotel business has been bleeding for ages, the underlying properties were almost all extremely well-located in certain key areas of South Africa. Hence, the argument was always that if The Don could not monetize its hotels, well, it could always sell them at a hefty price.
The latter appears to be coming true, as The Don has just announced the sale of nine of its fifteen properties in a deal worth c.R77.5m. This R77.5m compares very attractively against The Don's market cap of c.R30m, but bear in mind that one must cut CGT and some other costs out of the R77.5m cash price tag.
That said, The Don still has a remaining six properties to left in its portfolio...
The Don's share price has already leaped 70% today.
Despite this, I do think I prefer Gooderson (GDN) as an asset play, as its underlying properties are actually net cash generative, even in the currently tough leisure industry: Gooderson a good bet?
Finally, IQuad (IQG) is a niche financial services group that Sasfin (SFN) has recently taken a controlling-stake in. The group has an historical over-exposure to the local automotive industry, but is increasingly gaining traction into the broader Gauteng industrial market.
IQuad released a very positive trading update indicating that "...the earnings per share for the 15 months ended 31 May 2012 is expected to be between 44.0 cents and 55.0 cents. Headline earnings per share is expected to be between 62 cents and 68 cents for the same period."
Bear in mind that this is for a 15 month period, but even once you annualise the results for a 12 month period and compare it against FY 11 HEPS of 37.3cps, you still arrive at a 33% growth in HEPS during FY 12.
Unfortunately, once you look at the incremental HEPS growth for the 3 months from February 2012 till May 2012, you arrive at 9.4cps HEPS being generated. This annualised for a full financial year takes implied HEPS to 37.6, which is actually pretty flat when compared to FY 11 HEPS...
Overall, though, it doesn't appear a bad trading statement and the annualized 12m HEPS I work out above implies a PE of c.6.9x for IQG. Not a very demanding PE at all...