Just a quick note to let you know that as of this morning I’m adding Lonrho to my personal portfolio at a price of about 18 cents/share (close in London was right around 12 pence). I wrote about Lonrho as one of my African “idea of the month” stocks back in October, and I consider this to be a long term speculation — a company that remains a very small conglomerate (less than $200 million market cap) but has a diversified portfolio of small businesses in Africa, and the potential for significant long term growth in their Luba port, their teensy Fly540 airline, and their agricultural businesses. The stock has done well since then, up about 30% in local currency, but still looks fairly valued to me. The price does jump around a bit with the movement of the Pound, though this is not really a British business so that shouldn’t be a huge consideration — most of the operations do business in the local currency in their respective African countries, or in US Dollars.
There hasn’t been any huge news out of Lonrho since October — they released their annual numbers (still not quite profitable, but revenue grew substantially and their larger businesses are all cash-flow positive), and they’ve made some more relatively small investments, buying another agricultural equipment distributor (in Mozambique this time) and investing more in their prefab building business (Kwikbuild). The real catalysts for growth in most of their businesses are continued growth in agricultural exports and in mineral and energy exploration and production, which increase usage of their port in Equatorial Guinea and drive more business travel, and those trends are also generally the most important ones for the continent as a whole: as (and if) African countries grow their economies, I think Lonrho should do well.