ConvergeNet Holdings Limited provides best-in-class infrastructure products and solutions in the ICT technology and networking arenas. It’s also involved in cabling products, servers and storage solutions, amongst others. The focus of the company’s on emerging markets where, as you can imagine, the growth prospects are a lot higher than mature markets. This holding company consists of Sizwe, SCS, Navix and TC Telesto. It has an impressive management team with ages of experience between them.

This company has a remarkable vision to say the least, which it’s in the process of implementing. It intends becoming one of the leading ICT Service and Solutions companies in the global emerging markets arena. The promotional material of most companies doesn’t usually impress me, but something that stood out here did:

“ConvergeNet draws on experience of the past, reality of the present and roadmap of the future.”

There’s a lot in that indeed!

On the financial front, things look much better than before. But things will look even better going forward as many of the acquisitions haven’t shown results for the full year, and were made at different times. However, all of the subsidiaries reported a profit, with the group generating R50 million in cash for the year. And there’s virtually no external financing on the books – impressive. The company produced earnings per share of -5.37c for 2006 and 2.37c for 2007 (without full year participation from some divisions). Net asset value has risen from 0.94c to 19.66c for the same period, a huge improvement.

Part of the reason for this selection relates to the share price graph itself. Converge has increased while the JSE Overall Index (and most sectors) have fallen hard. This resilience is very rare indeed and shows there are no weak hands or keen sellers.

The share is on a price earnings ratio of 37.45, which some might say is too high. No sir, the high PE only means high expectations are being priced into the share.