Argent Industrial

The serial acquirer that forgot to list in Sweden

I have added Argent Industrial (ART) to the FrontierViking portfolio. This idea comes from Gustav over at aktieblogg.substack.com, and previously deep-dive-argent-industrial. Been thinking about this one for a long time, and finally ran out of reasons not to buy it. Gustav has written extensively about it, so I don’t have that much to add.

It’s a South African industrial serial acquirer (or conglomerate) of high quality, showing long term growth, paying dividends (4.3%), having about a third of the market cap in net cash (according to Smalltalkdaily Research), and trading at P/E 6.2, EV/EBITDA 3.

The main reason it’s so cheap is because of South Africa, basically. Argent is a microcap (101M USD market cap), only listed in South Africa, so it gets the full frontier/emerging markets discount. However, 70% of earnings come from outside South Africa as Argent has acquired businesses in the US, UK and elsewhere, and is progressively expanding outside South Africa.

And actually, while South Africa has deservedly had a reputation for a country going in the wrong direction, 2025 was South Africa’s best year in a long time. Inflation and interest rates fell, government bond yields narrowed, and both the stock market and the rand strengthened. S&P raised the country's credit rating, electricity supply stabilised through private sector participation, and freight rail is opening to 11 private operators across 41 routes. And the DA is in government, albeit as a junior partner to the ANC.

Comparing Argent with Swedish industrial serial acquirers:

Enough said.

Where is my dip?

I notice the FrontierViking portfolio was pretty much unaffected by the Iran war, didn’t drop when it started and didn’t rally today on the ceasefire news - just as it should be! One stock that did rally today (+10%) however was Malaysian stock Critical Holdings. Guess that’s what happens when one is very close to buying something, but doesn’t. Yesterday I wrote “Definitely a candidate for the FrontierViking portfolio, especially if it dips further.”

And finally a little appetizer, looking at a company with forward P/E 6.4, EV/EBITDA 3, practically same as Argent, but this company is listed in the US, not in South Africa. The breakdown of revenue and earnings (in USD) by country helps to explain the valuation: