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Transcript:

African Rainbow Minerals. The reason is it’s a solid company - a quality company that’s underperformed quite dramatically this year. It’s a company that offers diversification on the resource front in a similar way to Anglo American and BHP Billiton but obviously in a smaller company. It does give access to similar materials - there is good volume growth across both manganese and ferromanganese which is a specialist area they have and there’s obviously the gold stake they have in Harmony. I think the company has underperformed recently and the key positive is they have absolutely no debt on the balance sheet so there is definitely some good growth potential going forward. They’ve generally had quite a progressive dividend policy. I think there’s a lot of value more from its stability and future potential on the earnings side rather than the dividend side - it’s not necessarily a large dividend payer. It’s one we are buying for the earnings potential…

The risks for a company like that - would that be the global cycle, anything that’s driving the commodity plays because it’s diversified and that obviously reduces the risk to a certain degree. However, as world risk comes into play if that affects commodities you’re definitely going to see some sort of retracement in that share-price. That’s what’s probably been the issue we’ve seen in the last number of months where our commodities have remained under pressure - some moved in a positive direction and then came back and it’s that instability that’s been driving the share price.

Broker:
Glen Copans, RMB Asset Management

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