Our opinion on the current state of HCI(HCI)Hosken Consolidated Investments (HCI) is a BEE investment holding company owned by the South African Clothing and Textile Workers' Union. It has investments in gaming, hotels, media, transport, mining, and property. It owns 47% of a suite of gaming companies, including JSE-listed Tsogo Sun, which owns casinos and hotels, Galaxy Bingo, and Vukani Gaming (which operates gaming machines). They also own the JSE-listed E-Media group, which includes ENCA, Openview HD, and E-Sat TV.
In transport, they own 74% of Hosken Passenger and Logistics, which owns Golden Arrow Bus Services. They own 52% of Niveus Investments and 84% of Deneb. They have 100% of HCI Coal, which is a junior coal-mining operation with two operational mines. HCI Properties has a portfolio of conference and exhibition properties like the Gallagher Convention Centre. Finally, it owns 40% of a technology company called BSG.
On 26th April 2022, the company announced that a prospecting company that it has an effective 10% share of an investment in a company which has made a significant light oil discovery. This has caused the share to shoot up initially.
In its results for the year to 31st March 2024, the company reported revenue up 6% and headline earnings per share (HEPS) down 29%. The company's net asset value (NAV) increased 5% to 23504c per share. In our view, this is a diverse and somewhat unfocused group trading on a P:E of 9. We suggested that this share was cheap at R80 in February 2022, and it has since risen to R171.62 and may climb further.
HCI trade ideas
Our opinion on the current state of HCI(HCI)Hosken Consolidated Investments (HCI) is a BEE investment holding company owned by the South African Clothing and Textile Workers' Union. HCI has a diverse portfolio that spans across various sectors including gaming, hotels, media, transport, mining, and property. Notably, it owns 47% of a suite of gaming companies including JSE-listed Tsogo Sun, which operates casinos and hotels, as well as Galaxy Bingo and Vukani Gaming, which operates gaming machines. Additionally, HCI owns the JSE-listed E-Media group, which encompasses ENCA, Openview HD, and E-Sat TV.
In the transport sector, HCI holds a 74% stake in Hosken Passenger and Logistics, which owns Golden Arrow Bus Services. It also owns 52% of Niveus Investments and 84% of Deneb, alongside 100% of HCI Coal—a junior coal mining operation with two operational mines. In the property segment, HCI Properties manages a portfolio that includes conference and exhibition properties like the Gallagher Convention Centre. Moreover, HCI owns a 40% stake in a technology company called BSG.
On 26th April 2022, HCI announced that a prospecting company, in which it has an effective 10% share, made a significant light oil discovery, leading to an initial surge in its share price. For the six months ending on 30th September 2023, HCI reported a 6% increase in revenue but a 13% decline in headline earnings per share (HEPS). The company's net asset value (NAV) saw a substantial increase of 21%, reaching 23990c per share. HCI noted, "The Group’s television and radio advertising revenue increased by 1%, while its market share decreased slightly from 36% to 35% during the current period. Casino revenue and net gaming win combined increased by 9%, assisted by strong growth in food and beverage, and rooms revenue. Normalized revenue, adjusted for the prior comparative period receipt of the hotel management agreement cancellation fee of R399 million from Tsogo Sun (TSG), increased by 34% to R2 790 million, following significant increases in rooms (41%) and food and beverage (29%) revenue and rental income (38%)."
In a trading statement for the year ending on 31st March 2024, HCI estimated that HEPS would fall by between 24.1% and 34.1%. The company explained, "Headline earnings per share has been negatively impacted by equity losses of R528 million in respect of Impact Oil and Gas, which included an effective R483 million in equity losses in respect of its investment in Africa Energy Corp."
HCI's investment portfolio is diverse and somewhat unfocused, currently trading on a P/E of 9.34. We previously suggested that this share was cheap at R80 in February 2022, and it has since risen to R178 and may climb further.
$JSEHCI - Hosken Cons. Inv: Out Of Steam Or Taking A Breather?Hosken rallied 1187% from 1600 to an all time high of 20600
From May 2022 however, the rally has been fairly lethargic.
Price has continued to make new higher highs but these new highs have been at almost the same level creating a triple top structure.
The MACD however has failed to confirm these new tops creating a double divergence.
For a stock to rally 1187% in three years, one must look at and understand the fundamentals.
Technically, this could just be a consolidation period as divergences do not always lead to major trend changes.
HoskenJSE:HCI had a great year after trading above R84/share. The stock went on to gain 124% plus before trading sideways. It's not trading closer to a potential support level, but if JSE:HCI can trade below R145/share, it might easily give up the solid gains. Investors don't have to, they can always lock up their gains.
Still some upside...HCI is currently trading well above it's 40 week SMA.
The average is up, and the MACD doesn't indicate any divergence. (Momentum remains intact).
I feel prices could look to reclaim the R89.50 mark, which was previously a somewhat temporary support.
Overall the chart lacks any immediate "Bearish" indication of a reversal.
This is currently one good looking chart.