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HUDACO INDUSTRIES LTD

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HDC trade ideas

Our opinion on the current state of HUDACO(HDC)Hudaco (HDC) is an importer and supplier of "...automotive, industrial and consumer products" mostly in Southern Africa. Its business has two sides: (1) Supplying automotive security, power tools, communications, and business supply products to the consumer market. (2) Supplying mainly the mining and manufacturing industries with mechanical and electrical power transmissions, diesel engines, hydraulics and pneumatics, steel and thermoplastics, and fittings and bearings. The company has a very well-established business with 26 warehouses, 800 international suppliers, and 140 branches. Through this network, they supply about 230,000 products. The company has been battling to export goods because of inefficiencies at South African ports, especially Durban. The group constantly makes bolt-on acquisitions to build and enhance its business. In its results for the year to 30th November 2024, the company reported revenue down 5.8% and headline earnings per share (HEPS) down 6.3%. The company said, "For the five months from the formation of the GNU to the end of the financial year, through strong management of gross profit margin, tight control of expenses and the reduction of inventory, operating profit increased by 0.2%, and headline and comparable earnings per share were up by 3.5% on the equivalent period in the prior year." Hudaco is an extremely well-managed company operating in a difficult economy. As the economy improves, Hudaco's results will benefit directly. The share trades on a P:E of 9.99 and a dividend yield (DY) of 4.08%, which looks cheap to us. In our view, this share should be bought on weakness and offers solid, long-term investment potential as the South African economy improves.
JSE:HDC
by PDSnetSA
Our opinion on the current state of HDCHudaco (HDC) is a prominent importer and supplier of a wide range of automotive, industrial, and consumer products, primarily serving the Southern African market. Its business operations encompass two main areas: (1) the distribution of automotive security, power tools, communication devices, and business supplies to the consumer market, and (2) the supply of mechanical and electrical power transmissions, diesel engines, hydraulics, pneumatics, steel, thermoplastics, fittings, and bearings to the mining and manufacturing sectors. With a well-established presence, the company boasts 26 warehouses, partnerships with 800 international suppliers, and operates through 140 branches, offering an extensive portfolio of approximately 230,000 products. Hudaco has faced challenges in exporting goods due to inefficiencies at South African ports, particularly in Durban. To strengthen and expand its business, the company consistently pursues bolt-on acquisitions. In its financial results for the year ending on November 30, 2024, Hudaco reported a 9.1% increase in revenue and a 7% growth in headline earnings per share (HEPS). The company's net asset value (NAV) also experienced an 8.7% rise, reaching 11571c per share. Hudaco highlighted the adverse impact of load-shedding, logistical problems at ports, and Transnet's ongoing challenges on South Africa's economy and foreign investor confidence. Throughout the year, Hudaco allocated funds for acquisitions, investing R171 million, in addition to R33 million in property and R112 million in share buy-backs. On August 28, 2023, the company announced its acquisition of Brigit for R315 million, followed by the acquisition of Plasti-Weld for R56 million on November 30, 2023. Hudaco is known for its excellent management and operates effectively within a challenging economic environment. As the South African economy improves, Hudaco's financial performance is expected to benefit directly. The company's shares are trading at a P:E ratio of 7.66 and offer a dividend yield (DY) of 4.78%, which represents an attractive valuation. Hudaco is considered a solid, long-term investment opportunity, particularly as South Africa's economic conditions enhance.
JSE:HDC
by PDSnetSA
Our opinion on the current state of HDCHudaco (HDC) is an importer and supplier of "...automotive, industrial and consumer products" mostly in Southern Africa. Its business has two sides (1) supplying automotive security, power tools, communications, and business supply products to the consumer market and (2) supplying mainly the mining and manufacturing industries with mechanical and electrical power transmissions, diesel engines, hydraulics and pneumatics, steel and thermoplastics, and fittings and bearings". The company has a very well-established business with 26 warehouses, 800 international suppliers and 140 branches. Through this network they supply about 230 000 products. The company has been battling to export goods because of inefficiencies at South African ports, especially Durban. The group constantly makes bolt-on acquisitions to build and enhance its business. In its results for the year to 31st May 2023 the company reported revenue up 12,4% and headline earnings per share (HEPS) up 8,1%. The company's net asset value (NAV) increased 9,7% to 10809c per share. The company said, "Group sales at R4.3 billion for H1 are up 12.4% on H1 2022, however operating profit increased only 2.8% to R464.5 million on the back of a decrease in operating margin from 12.0% to 10.9%, still a respectable number considering the difficult trading conditions for the first six months, which were impacted by severe load-shedding and include the December, January and April holidays". On 28th August 2023 the company announced the acquisition of Brigit for R315m. Hudaco is an extremely well-managed company operating in a difficult economy. As the economy improves, Hudaco's results will benefit directly. The share trades on a P:E of 7,86 and a dividend yield (DY) of 4,66%. In our view, this share should be bought on weakness and offers solid, long-term investment potential as the South African economy improves. On 30th November 2023 the company announced the acquisition of Plasti-Weld for R56m.
JSE:HDC
by PDSnetSA
Our opinion on the current state of HDCHudaco (HDC) is an importer and supplier of "automotive, industrial and consumer products" mostly in Southern Africa. Its business has two sides (1) supplying automotive security, power tools, communications, and business supply products to the consumer market and (2) supplying mainly the mining and manufacturing industries with mechanical and electrical power transmissions, diesel engines, hydraulics and pneumatics, steel and thermoplastics, and fittings and bearings. The company has a very well-established business with 26 warehouses, 800 international suppliers and 140 branches. Through this network they supply about 230 000 products. The company has been battling to export goods because of inefficiencies at South African ports, especially Durban. The group constantly makes bolt-on acquisitions to build and enhance its business. In its results for the year to 31st May 2023 the company reported revenue up 12,4% and headline earnings per share (HEPS) up 8,1%. The company's net asset value (NAV) increased 9,7% to 10809c per share. The company said, "Group sales at R4.3 billion for H1 are up 12.4% on H1 2022, however operating profit increased only 2.8% to R464.5 million on the back of a decrease in operating margin from 12.0% to 10.9%, still a respectable number considering the difficult trading conditions for the first six months, which were impacted by severe load-shedding and include the December, January and April holidays". On 28th August 2023 the company announced the acquisition of Bright Fire for R315m. Hudaco is an extremely well-managed company operating in a difficult economy. As the economy improves, Hudaco's results will benefit directly. The share trades on a P:E of 7,77 and a dividend yield (DY) of 4,74%. In our view, this share should be bought on weakness and offers solid, long-term investment potential as the South African economy improves.
JSE:HDC
by PDSnetSA
Hudaco ALMOST ready to Go!Hudaco still remains one of my favourite small/ midcap share on the JSE. For our full summary on the company currently, click on the following link to read the full report (free): oldoak.co.za From a technical point of view, HDC recently broke its recent long-term bearish trend and found resistance at the top of the short-term channel. It also found itself in an EXTREME OVERBOUGHT environment according to its 14-day RSI and now experience some profit-taking. Should we see a break a close below the 21-day Moving Average (EMA), could bring the 50-day levels (R89.60) back into play. If I were a short-term trader (which I am not), I would set my stop loss at the 200-day EMA (R83.50) as a break and close below these levels would place HDC back into its longer-term bearish channel. A break and close above R100 could not only bring our fundamental target of R120 (read our report with link above) into play but also our technical target. A short-term trader could wait for R89.50 - R90 to buy, while long-term investors can hold the line if already invested. All and all – a good buy.
JSE:HDCLong
by SchalkLouw
Hudaco ready to Go!Hudaco still remains one of my favourite small/midcap share on the JSE. For our full summary on the company currently, click on the following link to read the full report (free): oldoak.co.za From a technical point of view, HDC finds itself back into its longer-term channel, currently flirting with the 200-day Moving Average (EMA). Should we see a break a close above R79.10, my next target becomes the top resistance line of the channel (R95), with a break and close above this, bringing our target price of R100 into play. HDC does find itself at EXTREME OVERBOUGHT environment according to the 14-day RSI, which could see an interim breather on the share price. Should we see a pullback, support level to watch is the 50-day EMA at R72.10, which will be a strong buy level.
JSE:HDCLong
by SchalkLouw
Top5 oversold/overbought according to RSI & HudacoFTSE/JSE All Share Top5 oversold/overbought according to 14day RSI indicator as follow: Oversold: Intu Properties 16 Nampak 26 Ascendis Health 26 Hudaco 28 Datatec 29 Overbought: Royal Bafokeng Platinum 81 Prosus 78 African Rainbow Mineral 77 BATS 77 Northam Platinum 77 Spending some time on Hudaco (HDC). With HDC’s results for period ended 30 November 2019 expected to be released 3 February 2020, it is interesting to note the recent pressure HDC’s price experience lately. Either the market’s expecting worse than expected results or the liquidity had just dried up. When you look at HDC’s average daily trade turnover over the past 2 years, interest clearly has come down a lot. During the 2018 year, HDC traded about R400m in value per day. Over the past 2 years, it averaged R350m/day. The big pullback over the past month was however done with an average daily trade value of only R230m/day, which clearly can take some of the blame for the magnitude of the pullback. It’s for this reason why I do think that HDC might just be unlucky to find itself in an EXTREME OVERSOLD environment according to its 14-day RSI. As mentioned, results are due in 2 weeks, which might be prudent to wait for before taking any short-term, long positions . With their latest set of results, they did mention that “Hudaco’s prospects depend largely on how the economy performs and that in turn depends largely on government policy and its implementation. Tough decisions together with action plans, time frames and measurables have to be made by government. We had hoped that these would be in place by now. Unless they are soon, we believe that the outlook for the economy for the rest of the year and 2020 will be no different from what we have experienced in the past 18 months.” We know now that the SA Economy is still extremely under pressure, with no big short-term turn expected in the near future. What should be noted is that 14% of HDC’s turnover is generate from the mining sector , which has seen some improvement lately. HDC still finds itself in big value territory, with any surprises in the results, that could have a substantial affect on the share price. Fundamentally the company is sound, trading at a historic PE of 8 times and a dividend yield of close to 6%. For the past 5 years, we’ve seen HDC’s share price find support at R100 on numerous occasions, something I’ll be monitoring very closely. Should we see a break and close below R100, could see the share price test the bottom of the parallel channel at R90, with this being my firm stop-loss if I was a short-term trader. Should the current support hold and we see a bounce, could see the 50-day moving average (MA) at R107 being next resistance level. Next resistance level after this is R114 (which is also my short-term target), with the very downward sloping 200-day at R116, being next resistance. A break and close above these levels, could very much see the share price test the top of the parallel channel, which one could only expect was achieved by positive results in two weeks’ time. This will be a VERY strong resistance level, with a break and close above R120 most probably taking us back to our current target levels. For more information on the company, read our July 2019 report on HDC here: oldoak.co.za
JSE:HDCLong
by SchalkLouw
Get to know, HudacoHudaco Industries Limited is a South African-based company, which is engaged in the importation and distribution of branded automotive, industrial and electrical consumable products, operating in the Southern-African region. On Friday, the 28th of June, Hudaco released its interim results for the six months ending May 2019. Under challenging trading conditions, the group managed to increase turnover by 7.5% to R3.2 billion. The company’s financial performance is dependent on growth in the South African economy, and its earnings have a significant bias towards consumer spending. Hudaco is currently trading at a significant parallel (channel) support line, with a break and close below R112, most probably only seeking support at around R100. Should we see the support hold and recovery from current levels, we could price aim for the 50-day moving average levels (at around R128), with a breakthrough those levels, most probably testing the 200-day moving average at about R137. Read our FULL report on the company by following this link: oldoak.co.za
JSE:HDCLong
by SchalkLouw
3
WHATDOYOUKNOW about HUDACO?I’m either missing something or this could be quite a nice entry point into a company which I feel could be in serious value territory. They’ve recently been named winner (in Industrial: Basic Industry) by Investment Analysts Society for their reporting awards, which in my view is a big plus if you look at the recent accounting and reporting practice scandals in some well-known companies. HDC is trading at a historic PE of below 10 and a historic dividend yield of close to 5%. The share price is currently trading at a major parallel (channel) support line, with a break and close below R113, most probably only seeking support at around R100 (this will also act as my stop-loss). Should we see the support hold and recovery from current levels, we could price aim for the 50-day moving average levels (at around R131), with a breakthrough those levels, most probably testing the 200-day moving average at around R138. Thomson Reuters consensus target price for the company, sees a break above the top of the channel resistance line towards the R158 levels.
JSE:HDCLong
by SchalkLouw