by Travis Johnson, Stock Gumshoe | June 26, 2012 4:47 pm
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Getting more attention these days — long article on Lonrho/Rubicon and Fastjet on CNN today. Which might have helped Rubicon shares stage a small recovery, though it’s still a teensy weensy company and will have to raise a lot of money to buy those 40+ jets they’re aiming for (they have one jet now, I believe, and a handful of turboprops).
http://edition.cnn.com/2012/06/27/business/fastjet-africa-stelios-haji-ioannou/index.html
I joined the irregulars this week and Lonrho is certainly an interesting business. Thanks Travis for a great website with such a wealth of information! I dipped my toe into this stock today at 7.25 GBP directly on the London stock exchange through my ETRADE Global account. Africa is one of the only regions that has a positive demographics outlook this century. It is projected to have over 20% of the world population by 2045. Europe had 20% of the world population in the 1960’s and will be below 10% in the 2040’s. Having said that, Africa faces a tremendous challenges not the least of which are the artificial national borders imposed on them by European colonizers that disregard tribal/ethnic boundaries (think Bosnia x100). Nial Ferguson’s new book Civilization has some thought-provoking discussion on Africa and I recommend this book to anyone interested in how we (the world) got to where we are and what the future may hold. In his talk at Mauldin’s Strategic Investors Conference this year, Prof. Ferguson laid out six questions for the “Post-Western World”, one of which was “Can Africa overcome Malthus?” (I didn’t attend, but saw the video presentation). Getting back to Lonrho, my expectation (and hope) is that this will be a VERY long hold in my portfolio.
Is Lornho listed lnaff on marketwatch the same company it is currently listed for 12 cents?
Yes, those are the pink sheets shares — the “fair” price is set in London and that’s where most shares are traded, so check London pricing (in pence) before setting limit bid orders if you ever decide to try to buy it on the pink sheets. It is hard to both buy and sell on the pinks due to very low volume.
Travis how come the stock is listed as $7 in London and 12 cents here? Also I am thinking about purchasing some shares on the pink sheets as I do not have access to the London markets, is the current 12 cent price a good value?
London shares are quoted in pence (1/100 of a pound), so 7 pence is in the neighborhood of 11 cents. It’s hard to get a good deal on the pink sheets for illiquid names like this, you often have to overpay by a bit to buy a stock and accept a bad price to sell it if you’re in any kind of a hurry.
The price changes frequently, so the best shot at getting a reasonable price is to check the London price, convert the currency (I use XE.com for current rates), and place limit orders while both NY and London are open (depending on daylight savings time, that’s the first hour or two of morning trading in NY).
I don’t know whether the current price will end up being a good price in the end, and certainly don’t know if the stock is right for your portfolio, but I paid a little bit more than the current price for my shares.
Thanks for the advice, I am willing to overpay a bit as I really like their long term growth prospects. I was just a little confused on coverting the price.
Any thoughts on Horizon 21/Rainer-Marc Frey’s growing position in Lonrho?
Don’t know anything about them, but they do sound a bit familiar — were they one of the buyers of the convertible debt a couple years ago? There have been a few hedge funds that have gone in and out of Lonrho as an emerging story over the years that I’ve been following them, but I don’t know anything specific about this one.
H21 is pretty much all Frey and a few close associates’ money now, but he’s been running hedge funds off and on for 20 years. The first mention that I see of them in the holdings disclosure statements is 7/12/2012.
Here’s a little piece on him – Google Translate makes it a little more fun:
http://translate.google.com/translate?hl=en&sl=de&u=http://www.bilanz.ch/unternehmen/rainer-marc-frey-eindrueckliches-comeback&prev=/search%3Fq%3Drainer-marc%2Bfrey%2Bhorizon%2B21%26start%3D30%26hl%3Den%26sa%3DN%26biw%3D999%26bih%3D410%26prmd%3Dimvnso&sa=X&ei=wr5QULvbCofq0gGewICADw&ved=0CF8Q7gEwBzge