City Lodge showing strong upside from the breakout to R5.35W Formation formed on City Lodge, broke above the neckline and is showing strong upside to come.
The price has broken above both 20 and 200MA.
First bullish target R5.35
IMP low probability for IMP but still more likely to break downM Formation turning into Triple Top with IMP.
I am hesitant making this analysis as the JSE is showing strong upside to come along with international markets.
But the charts are still saying the price is likely to test demand to the upside and if it's weak this thing can drop big time down to R38.00.
We definitely need to wait for the breakout and a strong down candle. But that's what the analysis says.
Price<20
Price>200
Need to wait for breakout
Target R38.07
Johannesburg Stock Exchange Reasons for execution
1)PWL & PML LIQUIDATED
2)+BOS external
3)0.382 Fibonacci
4)Monthly+ OB
5)1.618 Fib Expansion
Expecting a recovery in JSE.Expecting a recovery in the JSE because since the beginning of last years financial year prices have been steadily declining but also exporting mining companies in the JSE have been exporting minerals at a premium which could be good for earnings numbers. The JSE is consists of a majority of mining companies. The retail sector could also positively impact the JSE.
Our opinion on the current state of NOVUS(NVS)Novus (NVS) is South Africa's largest printing company with 11 printing plants. Until recently, it had the monopoly contract to do all of Media24's printing. With effect from 1st April 2018, that contract was reduced to roughly 58% of Media24's printing and the price paid by Media24 for printing was also reduced. The company appointed a new CEO, Neil Birch, who has decided in the short term to abandon the company's acquisitions and focus on consolidating the business and improving its operating performance. The board may also look to sell the company's tissue business. The company has a level 4 BEE status but will need to improve that to become more competitive.
On 12th August 2022, the company announced that it would acquire 75% of Pearson South Africa. In its results for the year to 31st March 2024, the company reported revenue up 24% and headline earnings per share (HEPS) of 78.8c compared with a loss of 7.4c in the previous year. The company said, "The increase in operating profit to R393.5 million (2023: R6.9 million) and gross profit margin improvement of 9.9% to 28.7% (2023: 18.8%), is attributable to a R264 million operating profit generated by MML and improved profitability in both Print and Packaging. Overhead costs were well contained throughout the Group."
Technically, the share price fell steadily since listing in March 2015 until March 2021. Then it began to move up and it currently trades at 92% of its NAV. We suggested waiting for a convincing break up through a 65-day moving average before investigating further. That has happened on 8th October 2020 at 88c, and the share has since moved up to 550c. The share trades about R225,000 worth of shares a day, which makes it practical for private investors.
Our opinion on the current state of AYOAYO is a black-owned technology company that was spun out of AEEI and in which AEEI still holds 49.4%. There were suspicious circumstances with a massive R4.3bn investment by the Public Investment Corporation (PIC), which has been the subject of a court action by the PIC and finally settled on 31st March 2023, with AYO paying the PIC R619m. In effect, the PIC pensioners appear to have been fleeced out of billions of rands.
Ayo shares listed at R43, fell to as low as 105c, but are now at around 305c after their latest results. Volumes traded are very thin, with many days where it does not trade at all. The company has 1400 employees. What income it got appeared to be from interest on the remainder of the PIC loan.
We find this share difficult to assess and consider it potentially dangerous, especially after the testimony from the former financial director, Siphiwe Nodwele, before the Mpati Commission, that the company is probably only worth R700m and the testimony of Naahied Gamieldien, previously the CFO, who said she had to "...adjust margins to increase the company's profit." - which resulted in the profit doubling.
In October 2019, the Financial Sector Conduct Authority (FSCA) conducted a raid on Surve's offices as part of an ongoing investigation. FNB has closed Ayo's bank accounts at Ayo Technology Solutions citing reputational risk. Ayo is opposing this in a court action and, in an announcement on 30th April 2021, claims to have put in place "alternative third party solutions" to enable the company to continue trading.
We would advise investors to stay well clear of this share until the uncertainties surrounding the Mpati commission can be resolved. On 1st June 2021, British Telecom (BT) announced that it was severing ties with Sekunjalo due to "misrepresentation of facts" before the standing committee on finance in parliament. On 10th February 2022, the JSE announced that two Ayo directors had been barred from being a director of a listed company for five years because of failing to carry out their oversight duties, leading to incorrect, false, or misleading financial statements. On 22nd December 2022, the JSE published a censure of Ayo because of their involvement in related party transactions without complying with the JSE rules on such transactions.
On 24th March 2023, the company announced that it had reached an undisclosed out-of-court settlement with the Public Investment Corporation (PIC), but it seems unlikely that the PIC will recover the R4.3bn which it advanced to Ayo. In its results for the six months to 29th February 2024, the company reported revenue up by 0.19% and a headline loss per share of 33.12c compared with a loss of 79.13c in the previous period.
We cannot recommend this share to private investors because we do not trust its reporting. On 6th September 2023, the JSE publicly censured a director of Ayo, Khalid Abdulla, for breaching the listing requirements and failing to exercise his fiduciary duties. He was fined R2m and Ayo was fined R6.5m. On 14th June 2024, the company announced that Dr. NA Ramatlhodi would become Chairperson of AYO with immediate effect.
Recovery in financial stocksPrice completed a reversal at the lowest price of the year (at 11.777 per share this year), with the low being established for year the debts collected from the past year with high interest rates could future push prices higher and the stability in the economy after the noise surrounding the country and it political uncertainty. With a Elliot Wave completion at the low of the year , a retest at the lower high could signal new trend and continuation into the upside after the earnings release next quarter in September, but if the estimated earnings does not beat expectation this could also result in the price continuing to trend downwards.
Short based on earningsSouth Africa's biggest micro lender could be hurt by the dollar and global uncertainty around the world since the banks make profit from people paying back loans and putting in deposits, people deposit less when everything in the economy becomes expensive because savings lags when compared to current state of the value of money and the purchasing power people have. This year financial stocks could also be hurt by the uncertainty that comes with elections also the policies that the new or current leadership of the country could choose to implement. to (Reuters,2024) the bank experienced an increase in credit impairment charges which rose by 38% and the tightening of credit granting criteria. The institution also experienced an increase in net transactions and commissions but the number of bad loans as percentage of total laons in retail banking increased to 101 basis points from 80 basis points in 2023.
Quilter Seeking a Weekly/Yearly LowQuilter is moving into a long weekly cycle, currently in week 42. Price is also seeking a yearly low, the last was the COVID low and we are well below that level. Ideally we want price to go below the previous weekly low (R16.61), this gives a good runway to the upside. The dashed pink line is where we will have confirmation of a weekly low by closing above this line on a weekly basis. The dashed green line is we will get a confirmation of a yearly low by closing above this line on a yearly chart.
The blue line is the daily cycle line, closing above this on a daily chart with a swing low means we have left behind a cycle low. Of interest is the intersection of support formed by previous weekly low horizontal blue and a median line of the Pitchfork, double support usually provide turning points. Higher risk entry would be a close above blue daily cycle line.
Goldfields (GFI): Attractive Pullback for Long EntryGold Fields has confirmed a weekly swing low, now needs to move above the green line to confirm trend change on a weekly time frame. R180-190 level will be strong resistance and a swing high on the daily time frame around this price is good for taking some profits.
AMS Seeking Long-term LowAngloplat chart shows that price is in long-term decline and we are getting close the COVID low price. Price action has respected the Pitchfork and we see an area where there will be expected to be strong support, the intersection of the Pitchfork support and the horizontal support line. Before we get there we might find a turning point where the lowest price of the COVID low closed.
The blue trendline is the line defining the weekly low, this we know when price close above this line and the 10 week moving average, whereas the green trendline represents the yearly low price.
$JSEMKR - Montauk Renewables: Bearish Engulfing Candle Is GloomySee link below for previous analysis.
Montauk is trading as forecasted. The bounce from 6120 to 10900 is for wave 4 but can still push higher. The bearish engulfing candle paints a gloomy picture though and could be the signal that the bear trend is resuming for wave 5.
I maintain my bearish stance even if price does push higher above 10900.
$JSESBK - Standard Bank: Trendline Works, At Least SometimesSee link below for previous analysis.
Standard Bank stock has a very strong and reliable support trendline.
The stock caught a strong bid on good volume again at the trendline.
Momentum has not been the story here, just steady grinding upwards towards the all time high of 23100.
I maintain a bullish stance as long as this trendline keeps supporting the stock.
$JSEAMS - Anglo Platinum: 58007 Invalidated, Now What?See link below for previous analysis.
Anglo Platinum bulls could not sustain their bid above 58007 cps and the stock recently broke below this key level thereby invalidating the view that five wave down from 178433 cps are done.
At this stage, i will give the market time to give more data before updating the wave count. Until then, I sit on my hands on Anglo Platinum.
$JSEPIK - Pick n Pay: Is There Life In This Stock?See link below for previous analysis.
Could a bear market that began in August 2016 be finally over?
There is not enough technical evidence yet but the rally from 1662, preceded by MACD convergence, could provide a bigger relief rally or it could just be a dead cat bounce.
I am still looking at the large Elliott Wave structure as a triple- zigzag (WXYXZ).
I am sitting on my hands on this one but I will monitor price above 1662 cps.
$JSENTC - Netcare: Speculative Buy IdeaSee link below for previous analysis and bigger Elliott Wave structure.
Is a bottom in at 1101 cps? Time will tell.
Netcare stock has broken above the 12/26/50 EMA and this turnaround was preceded by strong MACD convergence.
There is nothing much in terms of volume or any change in fundamentals so this is a purely speculative buy based on MACD and EMA indicators.
A tight stop-loss should be used below 1101 cps.
Mustek`s Cup & Handle pattern in play.After tumbling from its all time highs of R18.05 in April 2023, JSE's Mustek Limited went on a steep downtrend and reached lows around R8.00 beginning of April 2024.
The instrument has since formed a Cup & Handle pattern from this R8.00 zone on the 'Daily' line chart, giving bullish reversal sentiments up to at least R10.44 and a +13.4% run chance from current levels. An aggresive long position can be initiated at current market order, otherwise conservatively around R8.98 to target TP1 at R10.44, TP2 at R11.19 and TP3 at R12.25 and all with a Stop Loss at R8.40. A greed target can also be placed at around R13.27 while utilising the same stop loss.
Bearish sentiments will be in play once the intrument slips below R8.50.
Quality never fails the publicLooking at the financials of the Woolworths here in this South Africa the brand is staple to high middle income class groups, year on year the company's EPS has been steadily improving after Covid. Just waiting for price to fall to a suitable price before the earnings reports are out in September. Looking at price, I am also waiting for clear Elliot Wave count to complete (near the R5100 - R4900 per share) and clear price candle confirmation.
Our opinion on the current state of MC-GROUP(MCG)MultiChoice (MCG) is a leading entertainment company in Africa and one of the fastest-growing pay-TV broadcast providers in the world with 21.1 million subscribers in 50 countries. The company's 90-day subscriber base is split 42% (8.9 million) in South Africa and 58% (12.2 million) in the rest of Africa. The share was spun out of Naspers and separately listed on the JSE on 27th February 2019.
This company is probably close to an ideal company for the private investor because its income is mostly annuity income, in the form of debit orders, with a very diverse client group. It has virtually no working capital because it is essentially a service company and does not need to carry large stocks. It also does not have a large unskilled or semi-skilled workforce, although it has had union problems in the past.
The potential for pay-TV in Africa appears to be substantial but may be eroded by 5G internet access in the future and the existence of free online access through platforms. Icasa (Independent Communications Authority of SA), in its efforts to boost competition, is looking at changing the rules for dominance in the pay-TV market, which may impact on MultiChoice. This may include changing the rules for dominance in sports coverage which has been MultiChoice’s strongest appeal. This would impact on MultiChoice’s ability to negotiate exclusive sports contracts.
Obviously, this company is in the home entertainment business which received a boost from the COVID-19 lockdowns. On 2nd March 2023, the company announced that it had entered into an agreement with Sky News and NBC Universal to enhance the Showmax service and make it dominant in Africa.
In its results for the year to 31st March 2024, the company reported revenue down 5% and a headline loss per share of 715c compared with a loss of 301c in the previous year. Core headline earnings per share (HEPS) was down 38%. The company said, "The group's 9% decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline."
In our view, this is a solid blue-chip share which faces some problems with the alternative products available to its subscribers. On 5th February 2024, MCG reported that Canal+ had increased its stake in MCG to 35.01% triggering a mandatory offer at R105 per share to the remaining shareholders. The company rejected the offer as too low. On 28th February 2024, the company announced that the Takeover Regulation Panel (TRP) had ruled that since Canal+'s ownership of MCG had exceeded 35%, it was required to make a mandatory offer to buy out the remaining shareholders in terms of section 123 of the Companies Act (71 of 2008).
On 6th March 2024, the company announced that Canal+ had increased its offer to R125 per share. On 7th April 2024, the company announced that it had reached a cooperation agreement with Canal+ in terms of which it would work with Canal+ to implement the takeover. On 24th April 2024, the company announced that Canal+ had acquired 41.6% of its issued shares and it had filed the required notices with the Takeover Regulation Panel (TRP) and the Companies and Intellectual Property Commission (CIPC). On 16th May 2024, Business Day reported that Canal+ had increased its stake to 45.2%. On 4th June 2024, Canal+ made an offer of R125 per share for all the remaining shares in MC Group which it did not own.
Technically, the share had been falling since 6th March 2023 and we recommended waiting for a break up through the 65-day exponential moving average before buying. That happened on 19th December 2023 at a price of 7440c. After that, the share rose to just over R120 on 30th April 2024. Since then it has been drifting down and has broken down through its 65-day exponential moving average.
Our opinion on the current state of MOTUS(MTH)Motus (MTH) was unbundled from Imperial (IPL) and separately listed on the JSE on 22nd November 2018. It is a company that owns motor dealerships in South Africa, the UK, and Australia. The company has four divisions: import and distribution, retail and rental, motor-related and financial services, and aftermarket parts. It imports and sells more than 80,000 vehicles per annum and runs 356 dealerships and 134 rental outlets for Tempest and Europcar. It offers vehicle finance and fleet management in South Africa with 730,000 clients and retails parts and accessories for older vehicles through 720 franchised outlets. Altogether, it has a 20% share of the South African retail vehicle market, selling roughly 100,000 vehicles per annum. It is the importer of Hyundai, Kia, Mitsubishi, and Renault.
The CEO, Osman Arbee, said that the company plans to pay generous dividends because of its strong cash flows. The company generates 65% of its turnover in South Africa and 93% of its operating profit. On 1st October 2021, the company announced that it had acquired FAI Automotive in the UK for R550m.
In its results for the six months to 31st December 2023, the company reported revenue up 11% and headline earnings per share (HEPS) down 27%. The company said, "The South African operations contributed 55% to revenue and 66% to EBITDA for the period (2022: 65% and 77%, respectively), with the remainder being contributed by the UK, Australia, and Asia. The Group's passenger and commercial vehicle businesses, including the UK and Australia, retailed 64,076 new units (2022: 66,147), and 43,747 pre-owned units (2022: 43,422) during the period."
In a trading statement for the year to 30th June 2024, the company estimated that HEPS would decrease by between 25% and 35%. The company said, "...consumers are experiencing considerable strain on their disposable income. The higher-than-normal vehicle and parts price inflation, exacerbated by the impact of the weak Rand, has negatively impacted affordability."
Technically, the share has fallen from a high above R130 in September 2022 to current levels around R86. It is on a P:E of 4.78, which makes it reasonably priced in our estimation. We see this as a very well-established blue-chip share that is to some extent dependent on the state of the economy and the level of consumer spending. We think it will turn out to be a good investment, especially as the economy improves and provided the loadshedding problem can be contained.
Our opinion on the current state of PPCPPC is a leading manufacturer and supplier of cement, aggregates, ready-mix, lime, limestone, and fly-ash in Africa. It has eleven cement factories in South Africa, Botswana, the DRC, Zimbabwe, Rwanda, and Ethiopia with a total production capacity of 11.5 million tons. It produces aggregates at its Mooiplaas quarry in Gauteng, which is the largest aggregates producer in South Africa. It has twenty-six batching plants for ready-mix in South Africa and Mozambique.
Importantly, the company has managed to re-negotiate its lending so that it no longer requires a highly dilutive rights issue. No dividends have been paid for the last five years. The carbon tax which came into effect on 1st June 2019 costs PPC between R100m and R120m, which it intends to pass on to consumers. This will make its pricing less competitive against foreign imports unless tariffs can be increased. PPC is basing its hopes on growth from the rest of Africa.
In our view, PPC has been suffering together with the entire construction industry from the lack of new government and quasi-government projects in South Africa. It has been compensating by cutting costs and investing in the rest of Africa, but we regard the cement industry as over-supplied currently, and therefore difficult to manage. The company has also been benefiting from the government's new "localisation" policy in terms of which government operations have to buy locally produced cement.
In its results for the six months to 30th September 2023, the company reported revenue up 20.9% and headline earnings per share (HEPS) of 26c compared with a loss of 5c in the previous period. The company said, "Increased demand is required to enable us to more effectively utilise the capacity available in our primary market. PPC Zimbabwe saw a strong recovery across all key metrics when compared to the negative impact of the planned shutdown in the prior comparative period."
In an operational update for the 10 months to 31st January 2024, the company reported revenue up 27.6%. The company said, "Revenue growth in the South African and Botswana cement business continued to be driven by price increases, positively offsetting the declining sales volumes as experienced in the half year."
In a trading statement for the year to 31st March 2024, the company estimated that HEPS would be between 27c and 28.5c compared with a loss of 9c in the previous period. The company said, "...the current period EPS and HEPS numbers being impacted by a strong performance by PPC Zimbabwe in the current period compared to the prior period in which it had an extended kiln shutdown. In addition, in the current period, PPC Zimbabwe changed its functional currency from the Zimbabwean dollar to the United States dollar."
Technically, the share was in a downward trend since its high of 568c in October 2021, and we advised waiting for a clear break up through a 65-day moving average which happened on 2nd November 2022 at a price of 241c. Since then, the share has moved sideways and upwards but remains volatile. The company is conducting a R200m share buy-back and has reduced its debt by 20%.
On 26th January 2022, the company reported that the CEO and another director had sold about R240.5m worth of shares, which took the share price down sharply but is not necessarily thought to be negative.
In summary, PPC is making strides in improving its financial health and operational efficiency, particularly with the re-negotiation of its lending and the share buy-back program. The company's focus on cost-cutting and growth in Africa, coupled with the positive impact of the localisation policy, suggests a potential for recovery. However, the over-supply in the cement industry and the competitive pricing challenges due to carbon tax and foreign imports add a layer of risk. Investors should be cautious and monitor for sustained improvements in performance and stability in the share price.
Our opinion on the current state of SPAR(SPP)Spar (SPP) runs a chain of supermarkets across Southern Africa with 2402 stores. It also operates the Build-It chain in hardware and building materials and the Tops Liquor chain. The company has operations in Southern Ireland under the name "BWG," which operates through 1392 stores, and the Spar chain of 388 stores in Switzerland. Spar is expanding into Poland with the acquisition of 80% of Piotr i Pawel, which has 77 delicatessens, for 1 euro. This operation is expected to break even in about two years as its outlets are converted into Spar stores. Spar spent about 80 million euros to stabilize the Polish company.
As a group, Spar is a very serious competitor in the South African retail industry, making extensive use of franchising to expand its network. The development of the new Polish enterprise has been frustrated by COVID-19. Its diversification into Ireland and Switzerland gives it a solid rand-hedge component which does not appear to be reflected in its multiple.
In its results for the six months to 31st March 2024, the company reported turnover up 7.9% and headline earnings per share (HEPS) down 7.6%. The company said, "While the continuing Group delivered an operating profit of R1.6 billion with a marginal positive improvement on the prior comparative period, net finance costs negatively impacted profit before tax which declined by 11.2%. SPAR Southern Africa reported a total increase in wholesale turnover of 4.8% for all business units. BWG Group (Ireland and South West England) delivered a solid trading performance with turnover increasing by 5.7% for the period in EUR terms, and 16.0% in ZAR terms. Turnover for the Swiss business declined by 4.6% in CHF terms (increased by 8.7% in ZAR terms)."
In our view, the share is now underpriced at current levels and represents something of a bargain. We advised waiting for a break up through its long-term downward trendline, which now appears to have happened on these latest results.
Spar's diversified operations across different regions and sectors provide a degree of stability and a hedge against the rand. The company's performance in Southern Africa, despite the economic challenges, and its solid results in Ireland and Switzerland, suggest a robust underlying business. The Polish acquisition, though initially challenging, represents a long-term growth opportunity. Given these factors, Spar appears to be a good investment at its current price, especially after breaking its long-term downward trendline.
Our opinion on the current state of SPAR(SPP)Vunani (VUN) is a black-owned financial services group with interests in asset management, investment banking, property, and stockbroking. It also has an interest in coal mining, which has been performing well with the rise in coal prices.
In its results for the six months to 31st August 2023, the company reported revenue up 4% and headline earnings per share (HEPS) of 18.2c compared with 20.4c in the previous period. The company said, "The group generated total comprehensive income for the period of R35.9 million (2022: R39.3 million), while total profit attributable to equity holders of the company amounted to R28.9 million (2022: R32.3 million)."
In a trading statement for the year to 29th February 2024, the company estimated that HEPS would fall by between 63% and 83%.
From a private investor's perspective, the biggest problem with this share is that it is simply too thinly traded to be a practical investment. The low trading volume can result in difficulty buying or selling shares at favorable prices and may lead to increased volatility.
While Vunani has diverse interests and has shown growth in some areas, the significant drop in HEPS and the thin trading volume make it a less attractive option for private investors. Potential investors should consider these factors and may want to look for more liquid and stable investment opportunities.
