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Mazor |
11 December 2013. I thought I may be boring you with my continual analysis of Prescient, and ambivalence towards buying it. So, happy to move on!
The most interesting trade today on the JSE was a certain "R. Mazor" buying R709k of shares in a company by the name of, "Mazor Group Limited".
Ronnie Mazor is the Chief Executive of the group, a man who would have a LOT of insight into the group, and this trade therefore carries some weight. I don't know what Mr Mazor's personal financial situation is, but R709k is significant to most.
Mazor consists of :
Mazor Steel, which "designs, supplies and erects structural steel frames."
Mazor Aluminium which "designs, manufactures and installs aluminium structures such as doors, windows, shopfronts, facades and balustrades for major blue-chip construction groups. HBS augments the division's offering with a wide range of fenestration systems and accessories."
Compass Glass & Compass Glass SA "manufacture and distribute laminated and toughened safety glass and double-glazed units. "
Mazor has a presence in the Western Cape (its historical base), Gauteng, KZN & the Eastern Cape.
Mazor had their best half-year in quite a while, over the 6 months to 31 August 2013, generating R18m from continuing operations. The million dollar question is whether they can maintain this level of performance.
Mazor certainly aren't lacking in confidence : "Mazor is confident that the construction sector has turned a corner and is well on the way to recovery. Demand is stronger and is expected to improve further. The group is poised to return to meaningful profit increases. Aluminium has a healthy pipeline for the short to medium term. Glass is expected to increase profits in the year ahead; the primary focus for the second half of the year is cost cutting at the Compass Glass Cape Town branch. Steel construction in Cape Town has been subdued. However, substantial projects are expected to start within the next 12 months. Going forward the group intends to build on market gains driving margin expansion and capturing more substantial market share."
However, words are cheap, and I put far more weight on Ronnie Mazor's purchase of shares today than on the prospects section of a financial statement. This was Ronnie's first purchase of Mazor shares in the last 5 years. Indeed, the only director who has bought over the last 5 years has been Allan Groll, and he bought at the peak as well as the trough.
Whereas with Prescient my conclusion was that it was just outside my buying range, my conclusion with Mazor is that at R2.10 it is just inside my buying zone - by no means a screaming buy. I may be completely wrong, but I do own a small number of shares in Mazor.
As usual, I'll try give other opinions - here's what was concluded in a broker note : "The group does not seem expensive trading at a small premium to its NTAV but due to its low profitability and volatile earnings we would only recommend speculative investors to hold their shares". I tend to agree, although not based on the NTAV - sustainable earnings is far more important to me than the NTAV.
It seems it's the cyclical shares which are the most attractive at the moment, so you'd better hold onto your seat - it's going to be a bumpy ride.
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