Argent Industrial studycase

April 21, 2024
Anthony Clark
Anthony Clark

Durban-based Argent Industrial is a small cap holding company involved mainly in beneficiating metal

I've covered Argent Industrial for 20 years.

Back in the day the stock was a JSE darling soaring to a high of R20.50 before investors fell out of love with the stock and that of its buccaneering CEO Treve Hendry and the share crashed to a low of R3.44 in August 2018

In early-2019, having had an AVOID recommendation of Argent for some years, I was tipped off that there was a new strategy and mandate within Argent and that the CEO was driving this.

I was somewhat spectical give the company's and CEO's track record of adding and creating value.

I jumped on a plane to Durban as a newly minted independent analyst to visit the company and learn from the CEO what these changes were. Was the best airfare I paid for as the story was great.

Argent was R3.52 when I met then and as I was busy I didn't have time to write a note until May at R4.94 and the stock had run. FIRST mistake, if you have a great story get it out fast OR have the confidence to invest in it.

I published the note with a bold target of R7.00. Argent made that has it has made R9.00, R11.50, R14.00 and R16.00 as earnings growth has been strong, the company has exited low margin assets and used the cash proceeds to buy back massive amount of shares and invest in niche, profitable businesses overseas.

Today Argent is trading at R14.20 +5.58% on the morning and has gone XD as it paid a 42 cent dividend. With a Net Asset Value of R22.50 and offers to buy the stock (turned down) at R18.00 I continue to see good upside earnings growth in the company and the share price. My target is R16.00 in the near-term.

Argent is a micro cap stock. Its market value is R800 million. Its not held by institutions as they just remember old Argent. It was their loss as Argent has been one of the top performing small-caps on the JSE the past few years.

Here is the link to my original note showing that kicking the tyres, getting to understand a story WELL before the wider market CAN BE DONE as a private individual. All it takes is spotting a good story & following up on it.




As always this is an educational piece and the easy money has been made in Argent. Doy our own research if you intend investing in the stock so you too can understand the dynamics and drivers

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