Daily Insider: Anglo’s abandoned orphan’s shares from R25 to R290 in year – still cheap

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Anglo’s folly – Thungela from R25 to R290 in a year, still cheap

In June last year, Anglo American caved to shareholder pressure on ESG by completing the de-coupling of its South African coal assets. The new company, Thungela Resources, traded life at R25 a share. Anglo’s large foreign shareholding base dumped their allocations as quickly as they received them.

Yesterday Thungela issued a trading update disclosing it had earned R67 a share in the six months to end June. Annualised, that’s R135 a share – in a single year, five times the price at which Anglo rid itself of the supposed millstone.

In the investment world, following fashion is rarely a smart call. This one, taken by handsomely remunerated London-based managers, has to rank among the worst ever by any South African company. Even now, with Thungela’s shares more than 10x the price at which it was abandoned by its former parent, they look appealing.

WATCH: The 47% surge in fuel prices translates into a direct increase of 22% in the cost of goods says Naude Rademan, CEO of Linebooker, SA’s ‘Uber for Truckers’. In this interview with Alec Hogg of BizNews he explains how consumers have been shielded from the impact of this cost increase, but reckons that cannot last indefinitely, predicting a shock for already rising inflation.

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