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South Africa and the WorldMain ideas: The US and South African elections in 2024: The outcome of the elections in both countries will have long-term and pervasive impacts on the markets, especially if Biden wins in the US and Zuma runs again in South Africa.12 The US economy and the war in Gaza: The US economy is booming, but inflation and interest rates are higher than expected. The war in Gaza has hurt Biden's popularity and he is trying to negotiate a peace settlement with the help of the CIA.34 The Chinese economy and the Shanghai stock exchange: The Chinese economy has been struggling for the past three years, mainly due to the property sector bubble and the collapse of Evergrande. The Shanghai stock exchange has been in a downward trend, but the government has been intervening to support the market.56 The war in Ukraine and the role of NATO: The war in Ukraine is a proxy war between Russia and NATO, and it has resulted in a huge loss of lives and humanitarian crisis. NATO has been supplying weapons and aid to Ukraine, but has not yet committed troops on the ground. Putin is fighting for his survival and may resort to desperate measures.78 The South African economy and the coming election: The South African economy has been affected by load shedding, low savings rate, poor service delivery, and corruption. The coming election will be influenced by the ANC's performance, the rise of Mkhonto we Sizwe, and the return of Zuma to politics.910 Some commodities and companies to watch: The price of platinum group metals has declined by one-third this year, but may recover as the commodity cycle turns. The price of gold has also been falling, but may be at a cycle top. Bitcoin has been volatile and faces regulatory challenges. Some companies that are worth considering are Barloworld, Sibanye, and Purple Capital.1112
JSE:JSE
by PDSnetSA
AFT.JO Prints an IH&S Pattern 1 Year Study.Afrimat has printed an Inverse Head and Shoulders Pattern. I know the Shoulders are small & Cute! In this 1 Year Study Analysis I've Switched to a simple line Chart as to easily depict the Pattern. The Chart Depicts the possible Upsides. As always get a few Experts Advice before making any Investments or Trade decisions. Smash that Rocket Boost Button to show your Appreciation for my Analysis Studies. Prosperous Investing for 2024 to All. Regards Graham.
JSE:AFTLong
by hitchcoxg
Our opinion on the current state of SANLAM(SLM)Sanlam is a powerhouse in the insurance and financial services industry, not just in South Africa but on a global scale. Established in 1918, it has expanded its operations significantly over the years, now reaching into multiple continents including Africa, Europe, America, and Asia, with particularly strategic operations in the UK, America, Europe, India, Australia, and across several African nations. This extensive geographic footprint underscores its status as one of the most influential and comprehensive providers in the financial and insurance sectors worldwide. Operational Structure and Strategic Acquisitions: Sanlam’s business structure is divided into four primary segments: 1. Sanlam Investment Holdings (SIH): A significant portion (25%) of which is owned by African Rainbow Capital. 2. Sanlam Emerging Markets: This includes an 84.5% interest in Saham, a major player with operations in 33 French-speaking countries. 3. Sanlam Personal Finance: This is the biggest contributor to profits, largely focused within South Africa. 4. Santam: Sanlam owns a 61% stake in this South African insurer. Sanlam’s strategic acquisitions, such as the majority stake in Catalyst Fund Managers and the purchase of Alexander Forbes group risk and retail life business, further demonstrate its aggressive growth strategy and commitment to diversifying its portfolio. Financial Performance and Market Position: For the six-month period ending on 30th June 2023, Sanlam reported an impressive increase in net results from financial services by 26% and a dramatic rise in headline earnings per share (HEPS) by 118%. The company’s performance was bolstered across various lines including general insurance, life insurance, and credit structuring. Further, the nine-month operational update to 30th September 2023 showed new business volumes up by 13% and operational earnings up by 35%, with a robust solvency cover ratio of 170%, reflecting strong financial health and regulatory compliance. In its latest trading statement for the year ending 31st December 2023, Sanlam projected a significant increase in HEPS of between 43% and 53%, attributed mainly to higher investment returns on the shareholder capital portfolio. Investment Outlook: Sanlam has demonstrated a consistent ability to generate robust growth and maintain a solid financial base, making it a compelling choice for investors. With a current price-to-earnings (P/E) ratio of 10.43, the company is positioned as an attractive investment relative to its past performance and future growth potential. This valuation suggests that Sanlam offers good value, particularly considering its strong recovery post the coronavirus market downturn and its historical performance stability. Conclusion: As one of the JSE’s blue-chip stocks, Sanlam represents a substantial investment opportunity, especially for those looking to invest in a company with a broad international presence and a diversified service offering. Its proactive approach to growth through strategic partnerships and acquisitions, combined with a solid track record in financial performance, positions Sanlam as a strong contender for long-term investment.
JSE:SLM
by PDSnetSA
Our opinion on the current state of SSU(SSU)Southern Sun Hotels, previously known as Tsogo Sun Hotels, is a prominent player in the gaming, hotel, and entertainment industry in South Africa. The company strategically separated its gaming and hotel operations into distinct entities, aiming to unlock shareholder value and enhance focus within each business unit. Economic Context and Business Adaptation: The economic stabilization efforts by President Ramaphosa, particularly post-pandemic, are anticipated to bolster business and consumer confidence gradually. Southern Sun Hotels has capitalized on these improving conditions, especially with its investment in limited payout machines (LPM) and electronic bingo terminals (EBT), which are predominantly located in restaurants and bars. These smaller-scale gambling outlets have shown profitability, although they were affected by COVID-19 related disruptions. Financial Performance Overview: For the six-month period ending 30th September 2023, Southern Sun Hotels reported an occupancy rate of 56.3% and a 21% decline in headline earnings per share (HEPS). Despite this decline, the company's income rose by 34%, and it executed share buy-backs worth R389 million. The adjusted headline profit for the period was R255 million, a substantial improvement from R17 million in the previous year. This notable recovery in profits was largely driven by robust trading in the Western Cape, buoyed by major events like the Netball World Cup held at the Cape Town International Convention Centre. Future Outlook and Trading Statement: Looking ahead, Southern Sun Hotels provided a positive outlook in its trading statement for the year ending 31st March 2024, projecting an increase in HEPS of between 5% and 9%. The company attributes this optimistic forecast to the effective maintenance of cost efficiencies realized during the comprehensive restructuring throughout the COVID-19 period. Additionally, the significant exposure of its owned hotel portfolio to the Western Cape, particularly Cape Town, has been beneficial. The region has enjoyed a strong year marked by a resurgence in tourism, business travel, and events. Stock Performance and Investment Considerations: The stock performance of Southern Sun Hotels reflects a significant recovery since the onset of the COVID-19 pandemic. Described as "oversold" during the pandemic, the company's shares exhibited an "island formation" in trading patterns, suggesting a potential reversal in trends. Following a decisive upside break through the downward trendline on 21st March 2021 at 175c per share, the stock has risen sharply, reaching current levels around 555c. This rapid appreciation indicates robust investor confidence and a positive market reception to the company's recovery strategies and financial performance. Conclusion: Southern Sun Hotels appears well-positioned to benefit from the ongoing recovery in South Africa's economic landscape, particularly in the hospitality and gaming sectors. The company's strategic focus on operational efficiency and its strong foothold in a region experiencing significant travel and event-driven activities contribute to its positive outlook. Investors considering this stock should continue to monitor broader economic indicators, tourism trends, and the company’s execution of strategic initiatives, as these factors will play critical roles in sustaining its growth trajectory.
JSE:SSU
by PDSnetSA
Our opinion on the current state of CORONAT(CML)Coronation Fund Managers (CML) is a significant figure in South Africa’s asset management landscape, recognized as one of the largest managers in the country and the only one directly listed on the Johannesburg Stock Exchange (JSE). Established in 1993, the company experienced robust growth until a pivotal leadership change in 2015 when Adrian Pillay took over as CEO following the resignation of the founding CEO. Leadership and Investment Challenges: Despite Pillay’s strong qualifications, his tenure has been challenging. Notably, Coronation faced substantial losses due to investments in African Bank and Steinhoff, both of which significantly underperformed. These financial missteps have shaken investor confidence, leading to a re-evaluation of Coronation’s asset selection capabilities and resulting in substantial institutional outflows. The asset management sector heavily relies on maintaining trust and confidence, and these setbacks highlight the inherent risks in fund management where even experienced teams can face significant challenges. Regulatory and Financial Setbacks: Further complicating matters, in February 2023, Coronation lost an appeal with the South African Revenue Service (SARS), resulting in additional tax liabilities and a potential suspension of its dividend. This development adversely affected the company's share price. For the fiscal year ending 30th September 2023, Coronation reported a 2% decrease in revenue and a significant 50% drop in headline earnings per share (HEPS). The company managed R602 billion in assets, but noted net outflows amounting to 10% of average assets under management (AUM). This outflow was attributed to broader industry trends, including global emerging markets' declining demand after a decade of underperformance and shrinking savings pools within South Africa. Recent Financial Performance: Looking ahead, a trading update for the six months ending 31st March 2024 suggested a potential recovery in HEPS, estimating it to be between 199.7c and 200.9c, compared to just 6.2c in the previous corresponding period. This forecast indicates some stabilization, although it’s early to determine a full turnaround. Stock Performance and Investment Outlook: From a technical analysis perspective, Coronation’s stock performance mirrored its operational challenges. The share price saw significant growth from 2008 until it peaked at R115 per share on 30th December 2014. Under new management, coupled with several external setbacks, the share price declined notably, reaching a low of 2541c during the COVID-19 outbreak. Since then, the trend has been mostly sideways to downward. Currently, with a price-to-earnings (PE) ratio of around 17.9, the shares might appear reasonably valued in comparison to historical averages and the broader market. However, the sustained downward trend and ongoing challenges suggest caution. Investors are advised to monitor the stock for a clear break above the long-term downward trendline before considering entry, as the current market conditions and company-specific factors do not yet indicate an imminent reversal of the downward trajectory. Conclusion: For potential investors, Coronation presents a mixed picture. While there are signs of potential stabilization, the historical performance, ongoing outflows, and recent financial results suggest that careful consideration and continued monitoring are advisable before making investment decisions in this stock.
JSE:CML
by PDSnetSA
Our opinion on the current state of ENXGROUP(ENX)The enX Group is a diversified industrial company operating primarily in Southern Africa, with a portfolio that spans across several key sectors, including petrochemicals, fleet management, logistics, and industrial equipment. The company has a strategic focus on distributing branded products and services, making it integral to industrial and commercial operations in the region. **Diverse Operations and Strategic Disposals:** enX’s operations are quite diverse, reflecting its involvement in various facets of the industrial sector. This includes Austro, which focuses on distributing woodworking equipment and tooling, and New Way Power, known for its manufacturing, installation, and maintenance services for diesel generators. The fleet division of enX is involved in fleet management and logistics as well as vehicle tracking, whereas ENX Petrochemicals engages in the production and marketing of oil lubricants, plastics, polymers, rubber, and specialty chemicals. The company has been actively managing its portfolio through strategic disposals, which have been key to its financial strategy and capital allocation. Notable transactions include the sale of Eqstra to Bidvest for R3.1 billion in July 2019, and the sale of its British forklift and container business for GBP 31 million in April 2021. These disposals have enabled the company to pay down debt significantly, demonstrating a proactive approach to improving its financial health. **Special Dividends and Financial Performance:** enX has also declared special dividends following these sales, highlighting its commitment to returning value to shareholders. This includes a special dividend of 200c per share in April 2022 following the sale of the EIE subsidiary and another special dividend of R1.50 per share in August 2022 after disposing of Impact Forktrucks and the EIE Group. For the six months ending on 29th February 2024, enX reported a 5% increase in revenue and a substantial 110% rise in headline earnings per share (HEPS). However, the net asset value (NAV) experienced a slight decline to 1386c per share. The growth in revenue was primarily driven by increased sales volumes across its product lines—particularly polyethylene, specialty chemicals, and generators, which have been in high demand by large data-center customers. Despite an increase in toll-blending volumes, the average selling prices dipped, influenced by lower base oil pricing. **Market Position and Investment Outlook:** enX trades an average of R320,000 worth of shares daily, making it accessible and practical for private investors. The company's recent financial results and proactive management of its asset portfolio underscore its resilience and strategic positioning within the industrial sector. Currently, the share is on an upward trend, likely reflecting positive investor sentiment towards its operational success and strategic disposals. Given the breadth of enX's operations and its strategic focus on core industrial services and products, the company is well-positioned to benefit from any improvements in the South African economy. Its ability to make strategic acquisitions both locally and in the UK further supports its growth trajectory, making it an attractive prospect for investors looking for exposure in the industrial sector.
JSE:ENX
by PDSnetSA
Our opinion on the current state of NEPIROCK(NRP)Nepi-Rockcastle (NRP) is a prominent real estate investment trust (REIT) that plays a significant role in the European commercial property market. As a member of the Resilient group, it experienced significant market fluctuations due to external factors, including a scandalous report in 2018 and the global COVID-19 pandemic. Despite these challenges, the REIT has shown resilience and a commendable recovery trajectory. Nepi-Rockcastle operates an extensive portfolio of over 56 shopping malls across nine Central and Eastern European countries, with significant presences in Poland, Romania, Slovakia, Bulgaria, Croatia, and Hungary. Its portfolio was valued at €6.3 billion (approximately R124 billion), making it the largest property share on the Johannesburg Stock Exchange (JSE) in terms of portfolio value. The company's share price journey reflects the volatility inherent in the real estate sector and broader market sentiments. From a high of R217 in December 2017, it dropped significantly to R99 in November 2018 due to negative press and further plummeted to below R55 in March 2020 amid the pandemic. However, as of the latest updates, the share has recovered to around R103.06, indicating a stabilizing trend and investor confidence. Financially, Nepi-Rockcastle reported a robust year in 2023, with net rental income increasing by 21% and a modest 2.3% rise in headline earnings per share (HEPS). The management highlighted an impressive collection rate of 98% of the reported revenues for 2023 as of December 31, which increased to over 99% by mid-February 2024. The company's investment property was valued at €6.8 billion as of the end of 2023, showing growth from €6.6 billion at the end of 2022. Nepi-Rockcastle also maintains a strong liquidity position, with €909 million available, including €339 million in cash and €570 million in undrawn committed credit facilities. Its loan-to-value (LTV) ratio was at 32.2% as of the end of December 2023, which is below the strategic upper threshold of 35%. In the first quarter of 2024, the company continued its positive performance with a 12.7% increase in net operating income and a 10.5% rise in tenant sales. This growth is attributed to strong tenant performance and proactive asset management across its high-quality portfolio. Technically, the stock has shown a strong upward trend since November 2023 and has been moving sideways since March 2024. Considering its recent performance and strategic position in the European market, Nepi-Rockcastle appears to be a valuable investment at its current levels. The company's strategic management, robust financial health, and significant market presence in a region with growing economic prospects support a positive outlook for continued growth and potentially higher investor returns.
N
by PDSnetSA
1
Our opinion on the current state of SANTOVA(SNV)Santova is a sophisticated international logistics firm, with operations extending across 19 offices in 7 countries, including key markets in Asia (Thailand, Vietnam, Malaysia), Europe (Germany, the Netherlands, the UK), and other locations like South Africa, Mauritius, and Sydney, Australia. The company specializes in designing, implementing, coordinating, controlling, and monitoring international supply chain activities. Santova's approach is distinguished by its use of a virtual client-centric information system that enhances inventory management capabilities beyond the conventional tracking and tracing services, providing a comprehensive logistics solution. In its latest financial report for the year ending 29th February 2024, Santova experienced a downturn in performance. Both revenue and net interest income declined by 4.5%, and headline earnings per share (HEPS) fell by 20.1%. However, it's important to note that despite these challenges, the company's net asset value (NAV) showed a significant increase, rising 27.3% to 611c per share. The reduction in profits was primarily attributed to a rapid decline in shipping rates, which decreased revenue by R30.2 million. Additionally, Santova faced increased overhead costs due to a high inflationary environment and significantly higher corporate taxes for the group. Technically, the share price of Santova had been following a steady upward trajectory since May 2020, which came to an end in August 2023. Since then, the share price has receded to 752c per share. However, there are indications that it may be poised to begin a new upward trend. The stock is relatively well-traded, making it accessible for private investors, and it stands to gain from any economic improvements in South Africa and the UK. Given the strategic presence Santova maintains in key global markets and its comprehensive logistics capabilities, the company is well-positioned to leverage any positive shifts in the global logistics and transportation sector. For investors, the stock presents a potentially attractive opportunity, particularly if global shipping rates stabilize or begin to climb, and if inflationary pressures on operational costs can be managed effectively. The company's ability to adapt to changing market conditions and its proven track record of maintaining a solid NAV growth amidst revenue challenges further underscore its resilience and strategic management acumen.
JSE:SNV
by PDSnetSA
Our opinion on the current state of SEAHARVST(SHG)Sea Harvest Group (SHG) stands out as South Africa’s leading frozen fish brand, commanding approximately 38% of the market. The company, which is majority-owned by Brimstone with a 54.92% stake, specializes in catching, processing, and freezing fish primarily for local and export markets. Sea Harvest has recently expanded its operations through strategic acquisitions, including the purchase of Viking’s business operations. Viking, with a 40-year history, employs about 1,600 people and operates a fleet of 30 vessels across various South African and Mozambican ports. This acquisition included 50% of Viking’s aquaculture business, making Sea Harvest a significant player in South Africa’s aquaculture industry. The total acquisition cost was R565 million, funded partly by cash (R315 million) and partly through the issuance of 19.2 million Sea Harvest shares. Further diversifying its portfolio, Sea Harvest ventured beyond its traditional fishing business with the acquisition of Ladismith Cheese Company for R527 million. This move into the dairy sector, based on Ladismith’s after-tax profit of R58 million for the year to January 2018, indicates Sea Harvest’s strategic intent to mitigate the risks associated with the fishing industry. Additionally, in March 2023, Sea Harvest increased its stake in Viking Aquaculture to 82% for R210 million, reinforcing its commitment to growing its aquaculture division. For the fiscal year ending 31st December 2023, Sea Harvest reported a revenue increase of 6%, although headline earnings per share (HEPS) declined by 5%. The company’s net asset value (NAV) improved by 7% to 1216c per share. The company attributed its performance to strong demand and improved pricing in its markets, coupled with a 43% hard currency exposure which provided a buffer against the weakening rand. However, challenges such as difficult fishing conditions, above-inflation cost increases, load shedding, and global pressure on prawn prices constrained its performance. The Sea Harvest share has demonstrated volatility with reasonable trading volumes since its listing in March 2017. The stock has largely moved sideways with a recent downward trend, influenced significantly by the acquisition of Viking which has substantially altered the company's business dynamics. Factors such as weather conditions affecting catch volumes and potential changes in regulatory environments regarding fishing quotas continue to pose risks. Most recently, on 15th May 2024, Sea Harvest announced that its acquisition of 100% of Terrasan, another step in its expansion strategy, received approval from the Competition Tribunal. This approval likely provides a further diversification of its business portfolio, which could influence its market dynamics and investment attractiveness. Overall, while Sea Harvest is navigating through several challenges and leveraging acquisitions to diversify its business model, the share price, after a recent uptick, remains fairly valued. Investors should consider both the opportunities presented by the company’s strategic acquisitions and the inherent risks of the fishing and aquaculture industries when evaluating its shares.
JSE:SHG
by PDSnetSA
Our opinion on the current state of STEFSTOCK(SSK)Stefanutti Stocks (SSK) is a South African construction company that has long been a player in both the local and international markets, including sub-Saharan Africa and the United Arab Emirates (UAE). The company offers a broad range of services, including roads and earthworks, marine construction, concrete structures, and more. Despite its diverse service offerings, Stefanutti faces significant challenges that cast a shadow over its investment potential. The construction industry in South Africa is notoriously volatile, heavily dependent on economic conditions and government projects. Stefanutti's share price reflects this instability, having plummeted from a high of 2650c in November 2007 to about 56c currently, without any dividends being paid to shareholders. This decline is indicative of the broader struggles within the sector and the company's specific operational challenges. Stefanutti has been implicated in controversies, such as the accusation by Eskom in July 2020 of being overpaid R1 billion for work on the Kusile power plant, a claim the company denies. These issues further complicate its public and financial profile. Amidst falling order books, the company is undergoing a significant downsizing effort, which includes retrenchments and a restructuring plan aimed at financial recovery. This plan involves selling non-core assets and plant equipment and attempting to secure an additional R430 million in funding to mitigate the impacts of COVID-19. The company's efforts to divest from non-essential operations and assets are crucial for its survival but signal deep-seated financial troubles. For the six months ending on 31st August 2023, Stefanutti reported a 16% increase in contract revenue but still recorded a headline loss of 22.4c per share, showing some improvement from a 25.0c loss in the previous period. These results highlight ongoing struggles despite some gains in revenue. Looking forward, the company provided a trading statement for the year ending 29th February 2024, predicting a further deepening of losses to between 52.29c and 60.03c per share. This forecast underscores the dire financial straits in which the company finds itself. The management's disposal program aims to offload certain operations, classifying them as discontinued in anticipation of their sale within the next 12 months. Recent share price movements suggest a mild resurgence in investor interest, possibly linked to advancements in the negotiation to sell its 49% stake in Al Tayer Stocks (ATS). However, Stefanutti remains a high-risk investment, teetering on the brink of insolvency. Potential investors should be wary, as the company could follow the unfortunate path of many peers towards consolidation or business rescue if current restructuring efforts fail to stabilize its financial position. This background positions Stefanutti Stocks as a less favorable investment, particularly for those averse to high risk.
JSE:SSK
by PDSnetSA
Our opinion on the current state of UPARTNERS(UPL)Universal Partners (UPL) is an investment holding company with a robust portfolio, primarily listed in Mauritius and secondarily on the Alt-X of the Johannesburg Stock Exchange (JSE). Since its inception in 2013, Universal Partners has strategically invested in diverse businesses across various sectors, demonstrating a keen eye for value and growth opportunities. The company's investments include: 1. Dentex Healthcare Group - An entity that owns 56 dental practices in the UK, reflecting UPL's focus on the healthcare sector. 2. Yasa - Originally a distributor of controllers for high power density electric motors. Yasa was notably sold to Mercedes Benz for GBP 42.8 million, marking a significant exit for UPL. 3. SC Lowy - A firm specializing in market-making for distressed and high-yield debt, primarily in Asia, indicating UPL's inclination towards financial services with high-risk, high-reward potentials. 4. Propelair - A company that supplies water-efficient toilets in the UK, aligning with global trends towards sustainability and resource conservation. 5. JSA Services - A provider of personal service companies, payroll, and umbrella services to temporary workers in the UK, suggesting UPL's investment in essential business services. In the financial results for the six months ending 31st December 2023, Universal Partners reported a net asset value (NAV) of GBP 1,267 and headline earnings per share (HEPS) of 0.09 pence, a significant improvement from a loss of 2.25 pence in the previous corresponding period. The company highlighted its successful track record with six investments made since listing and two successful exits, demonstrating its effective investment strategy and execution. However, by the end of the three months to 31st March 2024, UPL reported a headline loss of 0.37 pence per share with an NAV of 1293 pence per share, indicating some fluctuations in performance. Such volatility is not uncommon in investment holding companies, especially those dealing in varied markets and sectors. Despite its strategic diversification and active management, Universal Partners is described as too thinly traded to capture the interest of private investors, primarily due to the limited liquidity which might hinder buying and selling shares at desired times or prices. For investors who do not require high liquidity and are interested in a diversified investment holding company with exposure to international markets and sectors, UPL might still present a noteworthy opportunity. However, for those requiring more liquid investments, it may be less appealing.
JSE:UPL
by PDSnetSA
CPR.JSE Copper 360 Trend Cloud and Fibonacci Study.Copper 360's sudden Trend change is very interesting, after comments by the CEO of possible Price manipulation. I have plotted the FIB's to see where the price action might show targets or resistance. As will most of these risky Trades or Investments, getting in early is the secret to giving you a decent Buffer and Headroom for future management. Congratulations if you did. Unfortunately the Trend Cloud Indicator is not Free. Should you wish to Purchase this, message me and I will put you in contact with the Author. 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.
CLong
by hitchcoxg
2
Our opinion on the current state of VODACOM(VOD)Vodacom, as South Africa's largest provider of airtime and data for cell phones, plays a crucial role in the telecom sector. It operates as a subsidiary of the international conglomerate Vodafone, facing competition from MTN, Cell-C, and Telkom. The industry has seen a significant shift with a decline in voice revenue, although this has been somewhat offset by a dramatic increase in data usage. One of the challenges Vodacom faces is its ownership structure, with a foreign parent company, which has shown to impact its market valuation negatively. For instance, concerns about Vodafone potentially being pressured to divest its non-European subsidiaries led to a 7% drop in Vodacom's share price over two days. Vodacom's operations span several countries including Mozambique, Tanzania, the DRC, and Lesotho, and it is also exploring opportunities in Ethiopia, which is Africa's fastest-growing economy with a population of over 105 million. Regulatory challenges have also affected Vodacom. On 2nd December 2019, the Competition Commission mandated a reduction in interconnect fees by 30% to 50%, significantly impacting Vodacom's revenue, as a substantial portion comes from these fees, causing a 5% drop in its share price. Innovations such as the launch of a "super-app" in collaboration with Jack Ma's Alipay aim to boost Vodacom's non-voice revenue. Additionally, a strategic partnership announced on 10th November 2021 with Remgro to create "Infraco" sees Vodacom holding an initial 30% stake, potentially increasing to 40%. This venture, integrating Remgro’s Dark Fiber Africa (DFA) and Vumatel, represents Vodacom's ambitious plan to dominate the fibre market in South Africa. The company has also invested R4 billion to mitigate the effects of load shedding, highlighting its proactive approach to dealing with operational challenges. For the fiscal year ending 31st March 2024, Vodacom reported a significant 26.4% increase in revenue, although headline earnings per share (HEPS) decreased by 10.8%. The acquisition of operations in Egypt significantly contributed to a 29.1% rise in group service revenue, supported by strong performance in South Africa. Despite global economic pressures, a 6.4% increase in net profit reflects the effectiveness of Vodacom's strategic and operational adaptability. From a technical standpoint, the share price has been on a downward trend since reaching a high of 16214c on 1st April 2022. Given the current trend, it may be prudent for investors to wait for a clear upward break through the downward trendline before considering an investment. Despite its attractive dividend yield of around 5.13%, Vodacom operates in a dynamic and often unpredictable environment characterized by rapid technological changes and regulatory shifts, presenting a considerable risk.
JSE:VOD
by PDSnetSA
Our opinion on the current state of RAUBEX(RBX)Raubex is a well-established construction company that started operations in 1974 and went public on the Johannesburg Stock Exchange in 2007. The company operates across three main divisions: construction, materials, and infrastructure. Recently, Raubex has diversified its portfolio in response to the reduction in road-building work, particularly from Sanral, which has significantly cut the value of the tenders it issues. This diversification includes venturing into renewable energy sectors, securing R500 million in contracts for projects such as the Droogfontein photovoltaic farm and the Copperton wind farm in the Northern Cape. Raubex has also expanded its geographical footprint beyond South Africa, with operations in Cameroon, Namibia, Botswana, and Zambia, and owns Westforce Construction in Western Australia. The company’s expansion and diversification strategy have positioned it well to capitalize on a broader range of opportunities across Africa. In addition to renewable energy projects, Raubex has seen a resurgence in contract work from the South African government and Sanral, from which it has secured R6 billion in orders. This is a testament to its robust management practices and its ability to closely control costs while maintaining a strong balance sheet. For the fiscal year ending 29th February 2024, Raubex reported a 13.8% increase in revenue and a 21.3% rise in headline earnings per share (HEPS). More impressively, the company’s order book grew by 27.5% to R25.55 billion. Detailed financial results showed significant increases in operating profit, profit before tax, and profit after tax, with group earnings attributable to owners of the parent reaching R847.6 million, up from R704.3 million in the previous year. Given its current performance and strategic initiatives, Raubex appears to be undervalued with a price-to-earnings (PE) ratio of 7.24, making it an attractive buy in periods of economic optimism or when market conditions show signs of improvement. Technically, the stock has been on an upward trend since March 2023 and recently broke through resistance at around R30 per share. It was added to the Winning Shares List (WSL) on 21st March 2024 at a price of 3031c. Overall, Raubex is positioned to benefit from any significant upswing in the South African economy, making it a compelling option for investors looking for exposure in the construction and infrastructure sectors, particularly those geared towards renewable energy and African markets.
JSE:RBX
by PDSnetSA
Our opinion on the current state of CALGRO-M3(CGR)Calgro M3 Holdings (CGR) is a South African developer known for creating large-scale integrated residential properties, rental units, and memorial parks. Since its inception in 1995 and subsequent listing on the Johannesburg Stock Exchange in November 2007, Calgro has specialized in acquiring land, planning developments, and either selling or renting the resultant residential or memorial park units. A significant challenge for Calgro has been dealing with illegal land invasions, which notably impacted its operations, costing the company about 25% of its turnover in the half-year period ending in August 2019. Despite these hurdles, Calgro has continued to expand and secure additional financing, most recently obtaining $25 million to fund new development projects. In its most recent financial report for the year ending 29th February 2024, Calgro showed positive developments. The company managed to hand over 1,794 units, with an additional 1,748 units under construction. There was a notable increase in headline earnings per share (HEPS), which rose to 189.87c from 153.18c in the previous period. This improvement reflects the company's ability to manage costs and enhance profitability efficiently. Moreover, Calgro reported its highest ever net asset value (NAV) per share, which increased by 40.60% to R13.37, up from R9.51 the previous year. This growth in NAV per share is significant, particularly as it indicates the company's successful enhancement of asset value while maintaining conservative valuation principles, valuing assets at the lower of cost or net realisable value. From a technical perspective, Calgro's shares have been in a strong upward trend since March 2023, suggesting growing investor confidence. However, like many companies in the property sector, Calgro’s shares are still trading well below their net asset value, which could represent a compelling value proposition for investors looking for opportunities in the real estate development sector. This undervaluation, combined with the company's recent financial improvements and strategic funding to support new projects, positions Calgro as an attractive option for investors seeking exposure to property development with potential for growth.
JSE:CGR
by PDSnetSA
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) is a globally diversified mining company that has effectively mitigated the typical risks associated with commodity stocks through strategic diversity in its mineral portfolio and maintaining a robust balance sheet. This diversification helps cushion the impact should any single mineral enter a bear trend, while a strong balance sheet provides the resilience needed to withstand economic downturns. Historically, commodity prices have shown a tendency to follow distinct trends. Starting from 2016, there was a steady upward trajectory until the COVID-19 pandemic triggered a downturn in March 2020. However, a recovery is evident, and the upward trend has resumed, fueled partly by economic expansions starting in America and spreading to Europe and Asia. Additionally, the conflict in Ukraine has driven up prices, particularly for precious metals, due to heavy sanctions on Russia. A key project for Anglo American is the Quellaveco mine in Peru, a massive copper venture where Anglo owns a 60% stake. With a construction cost of $5.6 billion, the mine is expected to achieve a rapid payback within approximately four years, thanks to its production potential and a projected 30-year operational lifespan. Despite these positive aspects, Anglo American has faced challenges, such as unreliable rail services from Transnet, particularly impacting its Kumba operations. The company has ambitious plans to meet 100% of its energy needs from renewable sources in South Africa by 2023. However, the share price has experienced significant volatility; it surged six-fold in under three years pre-pandemic, fell during the pandemic, and has since recovered impressively, although recent commodity price drops have affected it. For the year ending 31st December 2023, Anglo reported a 13% decrease in revenue and a dramatic 94% drop in earnings per share (EPS) in US dollars. Operational highlights included the full ramp-up of Quellaveco, producing 319,000 tonnes of copper at a cost of 111 cents per pound, and a strategic reduction plan aiming to cut annual costs by approximately $1 billion and capital expenditures by about $1.6 billion over the next three years. Despite these measures, a significant revenue impact from cyclical lows in PGMs and diamonds contributed to a 31% decline in underlying EBITDA. Recently, Anglo's stock has shown technical signs of further declines after completing a head-and-shoulders pattern and breaking down through the neckline at R525. However, following an acquisition offer from BHP on 13th May 2024, which proposed exchanging 0.8132 BHP shares for each Anglo share, the stock price rallied from 47926c to 63480c. Anglo rejected this second offer from BHP, signaling potential for an even more favorable proposal, possibly from competitors like Rio Tinto or Glencore. Given these dynamics, Anglo American presents a potentially exciting but volatile investment opportunity, directly benefiting from global economic growth and the strategic management of its diverse mineral portfolio. The future could see significant developments, especially with the ongoing interest from major players in the mining sector.
JSE:AGL
by PDSnetSA
Our opinion on the current state of TREMATON(TMT)Trematon (TMT) is an investment holding company based primarily in the Western Cape, with a diverse portfolio that includes subsidiaries, joint ventures, and associate companies. The firm initially focused largely on property investments but has since broadened its scope to include various sectors, including both listed and unlisted shares. Among its notable assets is Club Mykonos, a well-known leisure destination. In its financial results for the year ending 31st August 2023, Trematon reported a 13% increase in revenue. However, the company saw a significant drop in headline earnings per share (HEPS), which fell by 59%. Additionally, the net asset value (NAV) of the company slightly decreased by 1% to 366c per share. The company highlighted that Generation Education and Aria Property Group constituted 63% of the group’s investment net asset value (INAV). Over the past 11 years, Trematon has returned approximately R240 million to its shareholders through distributions and share buy-backs, underscoring its commitment to shareholder value. Looking ahead, Trematon issued a trading statement for the six months to 29th February 2024, estimating that HEPS would decline further by between 66.1% and 68.8%. Despite these challenges, the company's daily trading volume is relatively low, with only about R41,000 worth of shares changing hands each day, making it a less practical choice for private investors due to liquidity concerns. Nevertheless, Trematon's expanding involvement in the education sector, particularly through Generation Education, presents potential growth opportunities post-pandemic. This shift towards education could prove to be a strategic move, aligning with broader societal needs and potentially creating a more robust business model in the longer term. This makes Trematon an interesting consideration for investors looking at niche markets and education sector growth in a post-pandemic environment.
JSE:TMT
by PDSnetSA