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Our opinion on the current state of BIDVEST(BVT)Bidvest (BVT) is a highly diversified South African company with dozens of subsidiaries. Its most notable investments include a 66% stake in Bidvest Namibia, which also owns a large property portfolio rented out to various Bidvest companies, and a 56.13% stake in Adcock Ingram. The company's subsidiaries are organized into six divisions: Services, Freight, Automotive, Office, Print & Commercial Products, Financial Services, and Electrical. The directors of each operating company are given considerable autonomy within this structure, provided they produce good returns. This decentralized management style contrasts with most listed companies, which aim to retain their focus on a single area of business and constantly sell off or close down "non-core" businesses. Diversification of this sort reduces risk as different divisions can balance each other out when one is performing poorly while others perform well. Additionally, Bidvest is constantly making new acquisitions. The acquisition of PHS, the UK's largest cleaning service, was well-timed, coming immediately before the huge increase in demand for cleaning that followed COVID-19. The company's investment in alternative energy sources is seen as a potential profit generator. In its results for the six months to 31st December 2023, the company reported revenue up 8.8% and headline earnings per share (HEPS) up 5.3%. The company stated, "Group NAV per share grew from R89.88 in the prior period to R100.08 as at 31 December 2023. Cash generated by operations almost doubled. We spent R3.2 billion on acquisitions, invested in maintaining and growing our asset base, as well as awarded our shareholders with a higher dividend." On 3rd July 2024, the company announced that it would be looking for a buyer for Bidvest Bank and FinGlobal. At the same time, it announced the acquisition of Citron Hygiene LP. Bidvest now trades on a P/E of 15.23, but we believe it still represents good value at these levels. Technically, it has just emerged from an island formation and is on a strong recovery path.
JSE:BVT
by PDSnetSA
MKR.JSE Montauk Renewables. Trend Cloud Study.Montauk Renewables - Bio-Gas Supplier as we all know. This Chart Depicts the Highly Cyclical nature of these Commodities. It's one to Trade, not a long Term Investment. The recent sell-off could soon offer an Entry Opportunity. But we need to wait for a decent reversal of the current Down Trend. My last Trade yielded +60%. However only had R5000 in. But I shouldn't complain about that. As always, please get a few outside Expert's Advice before taking Trade or Investment decisions. Should you appreciate my Chart Studies, Smash That Rocket Boost Button. It's Just a Click away. Regards Graham.
JSE:MKRLong
by hitchcoxg
Our opinion on the current state of SIBANYE-S(SSW)Sibanye (SSW) is a mining house that has been on a rapid acquisition trail, accumulating platinum and gold mines in South Africa and America. The company is now broadening its scope to include base metals and minerals, especially so-called "green" metals. The company is run by Neal Froneman, who is well-known in the mining industry for his toughness, expertise, and experience. Froneman has said that he intends to retire in about 2024/5 but plans to double the size of the company before he does. Sibanye is also considering moving into the base minerals used in motor vehicle batteries like vanadium, copper, nickel, and lithium. On 1st June 2021, the company announced a share buy-back program to repurchase up to 5% of its issued shares. On 30th June 2022, the company announced its intention to increase its stake in Keliber, a Finnish lithium producer, to 80% at a cost of about R7.7bn. On 9th November 2023, the company announced that it is to acquire Reldan, a US-based metals recycler, for $211.5m. We believe that in time Sibanye will continue to make new all-time record highs due to superb strategic management. Thus, the current drop in the share price could be viewed as a buying opportunity. Froneman believes that Sibanye shares are undervalued, and we tend to agree with him, but everything will depend on the prices of the metals which he sells. On 25th October 2023, the company announced that it had commenced section 189 consultations for the retrenchment of 4095 employees. On 6th November 2023, the company announced that it had made a five-year deal with AMCU at its Kroondal PGM operation for a minimum 6% per annum wage hike. On 21st November 2023, the company announced that it would raise $500m by issuing a convertible bond that will pay 4% to 4.5% until it can be converted in 2028. The news caused some shareholders to switch out of the shares, resulting in a 20% drop in the share price. In its results for the year to 31st December 2023, the company reported revenue down 18% and a loss of R37.4bn. The CEO said, "We are confident that the PGM price weakness during 2023 does not signal a structural change in PGM fundamentals like that of the nickel market, but is more temporary in nature and we are beginning to see increasing signs which support a better demand outlook." On 11th April 2024, the company announced that it was commencing section 189 inquiries for the retrenchment of 3107 employees and around 900 contractors in its gold mines. On 3rd July 2024, Business Day reported that Sibanye had retrenched 11000 workers over 18 months. Technically, the share has been in a downward trend since March 2022, mainly because of falling commodity prices. In an update on the three months to 31st March 2024, the company reported a 3% increase in 4E PGM production. The company said, "Sandouville nickel production increased by 42% and Nickel equivalent sustaining cost reduced by 36%. The Keliber lithium project is on budget and progressing according to schedule. The Reldan acquisition was successfully concluded with integration underway." We recommended waiting for it to break up through its downward trendline before investigating further. That upside break came on 2nd April 2024 at a price of 2230c. The share has subsequently moved up to 2290c and remains a volatile commodity producer.
JSE:SSW
by PDSnetSA
Our opinion on the current state of ARCMITTAL(ACL)ArcelorMittal (ACL) is South Africa's largest steel-producing company. It has survived where companies like Highveld Steel have disappeared. Arguably, ArcelorMittal felt the impact of the sub-prime crisis more than any other South African company and has fallen from its high of R260 in June 2008 to as low as 25c in August 2020. Since then, it has rallied strongly and now trades at 1052c. The company has had to deal with the collapse of the construction industry locally, which was a major consumer of steel, and the massive imports of cheap Chinese steel which were dumped onto our market. Those imports have slowed down somewhat, and ArcelorMittal was successful in getting certain tariffs in place to discourage imports. We believe that this company came close to closure in July 2020 when the share price reached 25c. It has been rescued by the rising steel price combined with severe cost-cutting. In its results for the six months to 30th June 2023, the company reported revenue down 5.1% and a headline loss of R448m. The company said, "Falling international commodity demand affected most sectors. Understandably, steel demand remained muted, which put significant pressure on local prices. The company committed to adopt a flexible approach to operating plants in reaction to the available order book, adjusting fixed cost levels accordingly, and following an assertive cash management process." The share fell 43% after the trading statement. This share remains a commodity share subject to the international price of steel. In late April 2023, talks between ACL and NUMSA deadlocked, and the union said it was preparing for a major strike. On 17th July 2023, the company announced the resignation of its chief financial officer (CFO), Siphamandla Mthethwa, and he would be replaced by Gavin Griffiths in an acting capacity. On 28th November 2023, the company announced that it had decided to wind down its "Long Steel Products" business in Newcastle, which would probably result in the retrenchment of as many as 3500 workers. The decision was caused by logistics problems, the slow economy, and the advantage of scrap over iron ore. In an update on 3rd July 2024, the company said, "The Longs steel product operations ("Longs Business") have been operationally stable for H1 2024. The Flats steel product operations ("Flats Business") in Vanderbijlpark experienced notable levels of instability at its blast furnaces in April and May 2024. Due to the intensive cash management actions, the net borrowings position is anticipated to remain within tolerable levels." We recommend waiting for the share to break above its 200-day moving average before investigating further.
JSE:ACL
by PDSnetSA
Stock correction.Looking at the recent dividend results the company's dividend yield experienced a minor drop from 2.77% to 2.76 and while the company's P/E ratio increased ( from 18.89 - 20.60) which is not a good sign from an investment perspective and looking at the trend and Elliot wave count which completed at the beginning of the year and Bat harmonic pattern completion at beginning of 2024/2025 financial year, this could be sign of a minor correction waiting to happen.
JSE:KST
by KhoraCapital
Our opinion on the current state of CONDUIT(CND)Conduit Capital (CND) is a small financial services company primarily operating in the insurance industry. It has two main divisions: Investments and Insurance & Risk. Through its subsidiary, Conduit Risk & Insurance Holdings, the company engages in underwriting, investments, and earning commissions. Conduit Capital offers a variety of niche insurance products, including medical malpractice, primary health, funeral, and life insurance, guarantee and indemnity solutions, medical evacuation, and motor and property insurance. The company operates through brokers and agents. The company is currently undergoing a turnaround initiated by new management. However, its listed investments remain under pressure. On 23rd May 2022, the company announced that Constantia’s gross exposure to claims resulting from the KZN floods was not expected to exceed R25 million. On 1st August 2022, Conduit Capital reported that the Prudential Authority of the Reserve Bank had placed its subsidiary, Constantia Insurance, under prudential curatorship. Constantia Insurance accounts for 94.4% of Conduit's revenue, making its liquidation catastrophic for the company. This event caused Conduit's share price to drop sharply from 35c to 18c. Subsequently, on 21st September 2022, the company announced that trading of its shares on the JSE had been suspended following the liquidation of its largest subsidiary, Constantia Insurance Company. On 14th December 2023, Conduit Capital mentioned that the audited results for the 2022 year-end, along with the Group's Integrated Annual Report, would likely be published in January 2024. A provisional liquidation order for Conduit's main subsidiary, Constantia Insurance Company, was confirmed in the high court on 14th September 2022. In an update on 28th March 2024, the company stated it was still working on the publication of its financials for the year ending 30th June 2022. In a trading statement for the year ending 30th June 2024, the company estimated it would make a headline loss of between 29.64c and 33.76c, compared to a loss of 20.6c in the previous period. In a quarterly update on 28th June 2024, Conduit Capital noted that a final draft of the 2022 AFS was submitted to the auditors on 27 May 2024. The auditors are currently finalizing their review, after which the 2022 AFS will be published. Work on the interim results for the six months ended 31 December 2022 and for the year ended 30 June 2023 has also commenced. Final timelines for the publication of these results will be determined upon the completion of the 2022 year-end results.
JSE:CND
by PDSnetSA
Our opinion on the current state of CROOKES(CKS)Crookes Brothers (CKS) is an agricultural and property company formed in 1913 and listed on the JSE in 1948. The company produces sugar cane, bananas, macadamia nuts, and deciduous fruit, and has a property division. It owns Renshaw Farm, which consists of 1800 hectares between Scottburgh and Umkomaas. Of this, 266 hectares have been re-zoned for development, with 52 hectares subject to a contested land claim. The company has decided to sell the 28 hectares being developed as Renshaw Hills, a 500-unit residential development. The deciduous fruit operation consists of five farms in the Western Cape with 43 hectares of deciduous orchards. The macadamias are grown on a farm in Mozambique on a 99-year lease. The sugarcane operation is on four leased farms in Mpumalanga, plus other farms in KwaZulu-Natal, Swaziland, and Zambia. In its results for the year ended 31st March 2024, the company reported revenue up 18% and headline earnings per share (HEPS) of 334.5c compared with a loss of 708.8c in the previous period. The company's net asset value (NAV) increased by 8% to 7124c per share. The company said, "The 2024 reporting period saw a marked improvement in prices in the group's sugar cane and banana operations and a reduction in fertilizer and other agricultural input costs. Additionally, the group sold its deciduous fruit business and used the proceeds to settle debt, reducing interest costs going forward." A problem with this share is that it is relatively tightly held. The average value of shares changing hands each day is about R121,000, but on many days it does not trade at all. This generally makes it riskier even for private investors.
JSE:CKS
by PDSnetSA
Our opinion on the current state of GRINDROD(GND)Grindrod (GND) is an international freight and financial services company operating in twenty-eight countries. In mid-June 2018, Grindrod unbundled and separately listed its loss-making shipping division, Grinship (GSH). This accounts for the "cliff" in the share price at that time. The company is now focused on its two remaining divisions: freight and financial services. Grindrod owns the North-South railway line from Beitbridge to Victoria Falls as well as port terminals at Richards Bay, Natal, Walvis Bay, Namibia, and Maputo. The company is positive about the growth of its financial services division, which constitutes about 30% of its business. It is particularly focused on getting its retail banking division involved with small and medium-sized businesses. However, the conflict in northern Mozambique poses a problem for this share, and the flooding in Natal caused five of their sites to be suspended for several weeks. In its results for the year to 31st December 2023, the company reported headline earnings per share (HEPS) up 18%, net asset value (NAV) up 13% at 1368c per share, and revenue down 23%. The company stated, "The Group segment results benefited from the interest earned on the proceeds from the disposal of Grindrod Bank in 2022. Current year results include R45.3 million (2022: R167.1 million) from initiatives." In a pre-close update for the 5 months to 31st May 2024, the company reported an average price drop in the commodities it deals with of 19%. The company noted, "Port of Maputo achieved record volumes of 5.8 million tonnes, up 17% on the prior period. Grindrod's dry bulk terminals in Mozambique handled 4.6 million tonnes, down 6% on the prior period." Technically, the share has completed a rising triple-bottom and has risen off this base into a new upward trend. We recommended waiting for an upward break through its long-term downward trendline before buying. That break came on 15th July 2020 at a price of 340c. The share has since moved up strongly to 1504c, a gain of 342% in just under four years. The company should benefit directly from the recovery in the world economy and the steady rise in international trade. We believe that this share still represents value.
JSE:GND
by PDSnetSA
Our opinion on the current state of LIGHTHCAP(LTE)Lighthouse Capital (LTE) (previously Greenbay) was one of the Resilient group of REITs (real estate investment trusts) along with Resilient itself, Rockcastle, and Fortress. These companies were the subject of a damning report by 36One Asset Management, which stated that their share prices were too high due to their cross-shareholdings. Consequently, Lighthouse's share price (after a 20-for-1 consolidation in November 2018) fell from 5420c in December 2017 to as low as 688c in February 2019. The CEO, Stephen Delport, indicated that going forward, the company will focus about 80% of its capital on owning market-beating investments in Europe. Clearly, by changing its name, Lighthouse is attempting to distance itself from the Resilient group of companies and establish itself as an independent property company. The Financial Sector Conduct Authority (FSCA) found that Lighthouse had not been involved in any price manipulation in the Resilient group. Later in September 2019, the FSCA found that there had been no wrongdoing by any of the members of the group at all. Lighthouse held 882m shares in Hammerson worth about 405m euros on 3rd May 2021. On 14th May 2021, Resilient announced that its shareholding of Lighthouse had passed 35%, prompting a mandatory offer for the balance of Lighthouse's issued shares at 713c per share. On 12th August 2021, the company announced that it had raised R2,6bn in an oversubscribed bookbuild. The funds were to be used to purchase four shopping malls in France. In its results for the year to 31st December 2023, the company reported a distribution of 2.7 euro cents compared with 3.25c in the previous period. The company's net asset value (NAV) was 42 euro cents compared with 40.5c in the previous period. The loan-to-value (LTV) was 14%. The company stated, "Lighthouse forecasts a distribution of 2.40 to 2.50 EUR cents per share for FY2024. The macroeconomic landscape continues to improve with inflation abating and short-term interest rates anticipated to decline during 2024." In a pre-close update for the six months to 30th June 2024, the company said, "During 1H2024, Lighthouse concluded the acquisition of two malls, Salera (50% share) and H2O. Lighthouse's 50% share of Salera was acquired for EUR 87.25 million (inclusive of transaction costs), which represented a net initial yield of 7.7%. These acquisitions were funded by the disposal of Hammerson shares and have resulted in Lighthouse's loan-to-value ratio increasing from 14.0% at FY2023 to 20.3% at 25 April 2024." Technically, the share has been in an extended sideways market and had begun to rise until the advent of the Ukraine crisis. Since October 2023, the share has been in an upward trend. We see this rand-hedge company as relatively cheap at current levels.
JSE:LTE
by PDSnetSA
Our opinion on the current state of MARSHALL(MMP)Marshall (MMP) describes their business as follows: "Based in the UK, with strategically located offices globally, Marshall Monteagle PLC is a diversified investment holding company. The company provides procurement, logistics, and trading in various hard and soft commodities, industrial raw materials, consumer food and non-food products. Other non-operational investments include Commercial & Industrial Properties and listed equities.” In its results for the year to 31st March 2024, the company reported revenue down 13% and headline earnings per share (HEPS) of 5.8c compared with a loss of 4.4c in the previous period. The company said, "Net assets per share attributable to shareholders are US$2.46 (2023 – US$2.38). The increase is primarily as a result of the sale of US investment property. At 31 March 2024, cash balances were US$41,794,000 (2023 - US$23,225,000)." This share is relatively thinly traded with only R95,000 worth of shares changing hands each day on average, which makes it more risky for private investors.
JSE:MMP
by PDSnetSA
Our opinion on the current state of NICTUS(NCS)Nictus (NCS) is a furniture and electrical appliance retailer with three stores in South Africa. It also sells short-term insurance through Corporate Guarantee. In its financials for the year to 31st March 2024, the company reported revenue down 5.1% and headline earnings per share (HEPS) up 67.43%. The company said, "The debtors’ book continues to decline as customers prefer to pay immediately on a cash basis. Bad debts are well below the industry norm and are well managed and supported by our strong credit evaluation policy. Stock levels were consistent and remain within an acceptable range so as to be sufficient to satisfy customer demand and not be a financial drag." The enduring problem with this company is that its shares are far too thinly traded to be practical for private investors.
JSE:NCS
by PDSnetSA
Our opinion on the current state of PBT-GROUP(PBG)PBT Group (PBG) is a fledgling IT company in the general finance sector. It has operations in South Africa and Europe, having recently exited operations in the Middle East and the rest of Africa. The company operates in data analytics, data visualisation, application development, strategic consulting, the cloud, and data platforms. The company did a 10-for-1 consolidation earlier. The group has established agreements with a number of European companies to expand its operations into Europe. Agreements have been concluded in the Netherlands and Ireland and are imminent in the UK. This is a company that will probably benefit from COVID-19 because it is involved in digitalisation and the facilitation of remote work sites. In its results for the year to 31st March 2024, the company reported revenue up 3% and headline earnings per share (HEPS) down 23,8%. The company said, "The decrease in our gross margin is a function of higher-than-usual non-billability in our consultant base due to client budget constraints, as well as not entirely passing through the increase in the cost of consulting to our clients." We suggest that since this company has been radically re-invented, you may need to allow some time for the direction of the trend to be established and for the effect of its new European operations to become apparent. The share has been drifting down for most of 2023 and 2024 so far. You should wait for a new upward trend to emerge.
JSE:PBG
by PDSnetSA
Our opinion on the current state of SEAM(SXM)This is a very thinly traded mining exploration company. It bought two gold projects in the DRC in 2020. In its results for the year to 28th February 2023, the company reported a headline loss per share of 143,34c compared with a loss of 141,76c in the previous period. The company has a negative net asset value (NAV) of 741,36c per share. In its financials for the six months to 31st August 2023, the company reported zero revenue and a headline loss per share of 70,65c compared with a loss of 55,58c in the previous period. In a trading statement for the year to 29th February 2024, the company estimated that it would make a headline loss of between 45c and 55c compared with a loss of 171,88c in the previous year. The share is virtually untraded on the JSE. We would strongly advise that you leave this share alone.
JSE:SXM
by PDSnetSA
Our opinion on the current state of NAMPAK(NPK)Nampak (NPK) is Africa's largest packaging company with interests in South Africa and ten other African countries. About 60% of its turnover comes from South Africa, but only 36% of its trading profit. The rest of Africa accounts for 59% of trading profit and only 31% of turnover. The company also has small interests in the UK and Ireland. It produces four kinds of packaging products - plastics, metals, paper, and glass. The great preponderance of its trading profits come from metals - which consists mainly of beverage cans. Nampak has been able to remove R3,5bn (US$265m) of surplus cash from Zimbabwe, Nigeria, and Angola. Importantly, management appears to have the ability to repatriate profits from the various African countries where it operates. It has halted its strategy of expanding into Africa after writing down its businesses in Angola and Nigeria by R3bn. COVID-19 and the fall in the oil price have impacted its results in Nigeria and South Africa. It is also benefiting from the news that it will not need to sell assets or do a rights issue to pay back debt of just under R6bn. The announcement that it would raise R1,35bn through a rights issue to reduce debt caused the share to fall 30%. The rights offer was reduced from R2bn to R1,5bn, and shareholders finally gave permission to raise up to R1bn on 30th June 2023. On 20th April 2023, the CEO, Eric Smuts, resigned with immediate effect and was replaced by Phil Roux. In its results for the six months to 31st March 2024, the company reported revenue up 7% and headline earnings per share (HEPS) of 5 393.9c per share compared to a headline loss of 11 027.3c in the previous period. The company said, "Despite declines in revenue in DivFood and Bevcan Angola, Metals recorded a 6% increase in revenue boosted by growth achieved with Bevcan South Africa, while Plastics and Paper posted 9% and 10% increases in revenue respectively." On 16th May 2024, the company announced that it had sold its entire Nigerian operation for $68,5m. This resulted in the share giving a clear on-balance-volume (OBV) buy signal. A second OBV buy signal came on 20th June 2024 at R228 per share. Since then, it has moved up to R285.50. We believe that it will continue to perform.
JSE:NPK
by PDSnetSA