I closely monitor the progress of Hudaco, a counter Jean and I hold in both the Private Investor and High Yield portfolios about which I used to write in Business Day. About a year ago, after Hudaco published its results for the six months ended May 31 2012, I reckoned that its then share price of R82 was attractive.

I figure that the much smaller number of readers of our newsletter could be interested why I made that conclusion and, more importantly, what I feel about the share at its Friday’s closing price of R114,05.

A year ago, I wrote: ‘Half-year on half-year Hudaco’s sales improved by 26% to R1,41bn from R1,12bn, and operating profit rose by 24% to R149m from R120m. This performance translated into 11% growth in headline earnings per share to 377c from 341c, while bottom-line diluted headline earnings per share were 10,4% up to 371c from 336c.

‘In the whole previous financial year, diluted headline earnings per share were 784c. Second-half earnings per share were, therefore, 448c. I reckon that the company can grow its second-half earnings by at least 10% in the second half of this current year, to say, 493c. My guesstimate for the whole year, is, therefore, the sum of first-half earnings of 371c and second-half conjectural 493c, a total of 864c. Dividends over the year (an interim of 130c per share has just been declared) could be about 364c.

‘At the current share price of R82, the forward ratings on my guesstimate is a price-earnings ratio of 9,5, the earnings yield is 10,5% and the dividend yield is 4,4%.’

My forward view was over-conservative. In the financial year, diluted headline earnings per share were 1010c compared with my guesstimate of 864c and dividends for the year were 440c a share, compared with my guesstimate 364c.

In that latest half-year period, diluted headline earnings per share were 434c a share, 17% better half-year on half-year. As we know the economy is having a tough time, and its mining sector, platinum in particular, is having a bumpy ride. But despite this Hudaco’s directors are confident in growth in earnings. It has already made a promising investment.

My feeling is that year-on-year bottom-line earnings per share could improve by at least 10% to 1 111c. Dividends per share, after withholding tax of 15%, could be around 480c for the year.

At a share price of R114, the forward price-earnings ratio on earnings of 1 111c a share is 10,26, the earnings yield is 9,7% and the net dividend yield is 4,2%.

These ratings are much similar to those a year ago, and, to my mind they are attractive for long-term investors.

Incidentally, our High Yield portfolio invested just over three years ago and its annual compound internal rate of return was just over 30% until Friday’s market close.