PSG Group continues to deliver, but Mr Market continues to let it trade at massive discount to its assets.
Date: 16 October 2018
Category: Stock Market
Share price at time of writing: R212.74
We take a look at the interim result of investment holding company PSG Group Limited (PSG), famous for their massive holding in Capitec Bank and private schools group Curro. They also hold significant stakes in Zeder and PSG Konsult, which is a diversified financial services provider.
While PSG assets are worth way more than their listed share price, we are afraid the discount of the share price to the value of their assets will take a long time to narrow, with the discount being close on 20%.
Investment approach and background on PSG Group
Below describes PSG's investment approach as taken from their website:
- Companies with uncomplicated business models operating in industries with attractive growth prospects and led by talented, hard-working and passionate people.
- We believe in co-investing with management – management as owners are generally focused and dedicated to continuously grow their businesses.
- A culture of good corporate governance is instilled at board level and is applicable to the entire organisation. It remains a cornerstone of the way we do business. In our opinion, however, good corporate governance is not necessarily represented by set rules, policies or codes, committees or meetings. It is rather relevant, transparent, timely, accurate and succinct information provided to those charged with oversight who, by their nature, are trustworthy and ambitious to act in the best interests of the company.
- We are long-term strategic investors with no predefined exit strategy.
- We add value by challenging management to innovate and grow their businesses, both organically and by means of acquisitions. We provide funding when needed.
- A company can only grow when its customer base increases. A focus on client satisfaction thus remains vitally important for our continued success.
- Funding remains critically important and integral to what we do