Reinet (RNI) is an investment holding company whose main asset is a holding of roughly 2,12% of British American Tobacco (BAT) worth about $1,8bn, which now accounts for 31% of its net asset value (NAV)—down from 85% ten years ago. This decline from a year ago is because the price of BAT shares has fallen. Most of this reflects the more difficult legal environment for tobacco, especially in the US, where the Food and Drug Administration is considering changing the laws on menthol cigarettes.
In our view, Reinet shows no great urgency to divest itself of the BAT stake, which continues to contribute good dividends from growth in third-world countries, while cigarette sales in first-world countries fall. As the price of BAT has fallen, the other assets in the Reinet portfolio have become more significant. The largest of these is its 46% stake in Pension Insurance Corporation (Penscorp), which now represents 36,8% of its portfolio.
Aside from Penscorp, the company also owns a spread of private equity investments, which account for around 15% of the portfolio. The company has a compound growth rate of 8,8% per annum since March 2009. In its results for the six months to 30th September 2024, the company reported a net asset value (NAV) of 3625 euro cents per share—up from 3089c a year earlier. The company said, "Reinet has no direct exposure to Russia, Ukraine, or the Middle East through its underlying investments or banking relationships and has not experienced any significant direct impacts in respect of interest rate fluctuations or inflation."
The share is obviously a rand-hedge and, although it fell from its high of R343 in February 2020 to lows in January 2021, we advised waiting for a break up through its long-term downward trendline. That break came on 16th September 2019 at R270 per share. It is now trading for R480.31. It obviously took a hit as a result of the BATS announcement that it was writing the value of its US operation down by GBP25m (R595bn), resulting in a 10% fall in the BATS share price.
This share benefits from any weakness in the rand, and investors should consider the rand's future prospects before buying. On 13th January 2025, Reinet announced that it had sold its entire holding of BATS, which was 24% of the value of its total portfolio, for GBP 1,221bn.
In our view, Reinet shows no great urgency to divest itself of the BAT stake, which continues to contribute good dividends from growth in third-world countries, while cigarette sales in first-world countries fall. As the price of BAT has fallen, the other assets in the Reinet portfolio have become more significant. The largest of these is its 46% stake in Pension Insurance Corporation (Penscorp), which now represents 36,8% of its portfolio.
Aside from Penscorp, the company also owns a spread of private equity investments, which account for around 15% of the portfolio. The company has a compound growth rate of 8,8% per annum since March 2009. In its results for the six months to 30th September 2024, the company reported a net asset value (NAV) of 3625 euro cents per share—up from 3089c a year earlier. The company said, "Reinet has no direct exposure to Russia, Ukraine, or the Middle East through its underlying investments or banking relationships and has not experienced any significant direct impacts in respect of interest rate fluctuations or inflation."
The share is obviously a rand-hedge and, although it fell from its high of R343 in February 2020 to lows in January 2021, we advised waiting for a break up through its long-term downward trendline. That break came on 16th September 2019 at R270 per share. It is now trading for R480.31. It obviously took a hit as a result of the BATS announcement that it was writing the value of its US operation down by GBP25m (R595bn), resulting in a 10% fall in the BATS share price.
This share benefits from any weakness in the rand, and investors should consider the rand's future prospects before buying. On 13th January 2025, Reinet announced that it had sold its entire holding of BATS, which was 24% of the value of its total portfolio, for GBP 1,221bn.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.