Nu-World Opportunity

July 17, 2023

Nu-World Holdings Limited, together with its subsidiaries, manufactures, imports, assembles, markets, and distributes various electrical appliances, consumer electronics, and branded consumer durables in South Africa, Australia, Brazil, the United Arab Emirates, Hong Kong, and Lesotho. It also provides hi-tech products, white goods, liquors, furniture, and personal protective equipment. Nu-World Holdings Limited was founded in 1946 and is headquartered in Johannesburg, South Africa.

The current CEO Jeffrey Goldberg has been a board member since the mid 80s with a conservative management style. 

The company has a very strong balance sheet with R23 cash per share equating to more than R500mil of cash. Currently, the stock has a market cap of R607mil and trades at a 4.61 P/E with net asset value (NAV) of R64.45.

Using a conservative balance sheet valuation approach, the stock could easily reach R50 implying a 85%+ upside. Also, investors are rewarded with a 9%+ dividend while they wait for the story to unfold. This is a true Benjamin Graham net-net stock as the share price is below 2/3 of net current asset value.

Potential risk include exchange rate risk as they do a lot of importing. Investors should also be comfortable with illiquidity as this stocks trades thinly.

*Disclaimer, I own the stock.

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