Hudaco

Extract from Portfolio Manager Commentaries – Sept 2022

Hudaco is a distributor of engineering consumables and consumer products. It has been a very good business for decades, generating a lot of cash and decent returns on equity. It is one of the best managed small caps in South Africa, and has done an outstanding job of allocating capital between share buybacks, dividends and small value accretive acquisitions. It is currently trading on about a 7.2 times forward multiple, which is too low for a business of this quality.