I have a proposition for you. I always take my bets seriously, and therefore I am only taking the first 1 bets. Email me futurewealth mercato. I am looking forward to hearing from you.

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My case for Rolfes is briefly presented below. Rolfes is still small, with lots of room for growth. Their future growth prospects are supported by the fact that they have chosen to operate in industries where I believe demand will be strong for many decades to come. This good for the revenue side of the profit equation. But costs can theoretically only go to zero while revenue may increase by many factors of its current value. For this reason I love businesses that can increase their revenues sustainably and like businesses that are very cost conscious.

And if a business can do both, I am in a state of mind that is best described with words not fit for publication. Rolfes may very well turn out to be such a business. The markets that Rolfes plays in will be with us for many centuries to come.

We need to eat, which requires food and agricultural chemicals, and we need to drink and manufacture, which requires water and industrial chemicals and services. The revenue side is covered.

New management is very much on the ball with regards to being motivated to manage Rolfes well, and we will have to wait and see if this fervor translates into sustainable cost discipline.

If you were the sole proprietor of Rolfes, you would own a company that sells R1. At the moment as of July 15 the price tag of the entire business is R million.

Does the price seem like a good deal to you? Consider the following; Imagine that this business needs to spend another R20 million per year to maintain its current profitability into the future, which means that the R90 million net profit would actually be R70 million. What does that mean?

It means that you, as the sole owner of Rolfes, would be able to put R70 million in your pocket every year for as long as the business is sustainable.

I am assuming all amounts grow at the rate of the economy so that the R70 million you receive will keep up with inflation. The stock market is not a casino, but neither is it your mattress or the local bank.

It needs to be a place where you could potentially make a lot of money to make up for the fact that it is a place where you could definitely lose a lot of it. I believe that I have been conservative in estimating what the future of Rolfes holds.

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I am confident that Rolfes can grow the R70 million income stream at a pace higher than inflation for a number of years before it hits industry demand constraints. I think anybody who invests in Rolfes at this price R3. Don't have an account?

What if they have a contingent liability of say R50 million e. Then the whole R70 million flies out of the window? Secondly these sort of articles are quite unethical since it will potentially mislead others to put their savings onto this share and you might be wrong entirely. Thanks Charl, Price still under pressure for about three years now. I would like to see a proper recovery first, might get interesting upside of R4.

For now my bokkies stay in the wallet.. You might have left one of the fields blank, or be posting too quickly. Thank you for commenting. Please refresh this page to see your comment. If your comment is missing, it might be held for moderation. Please wait a while before posting your next comment. Sign up for a FREE account. Login here or sign up here. Rolfes paints a pretty picture.

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