Get started
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) effectively mitigates the typical risks associated with commodity stocks through two main strategies: diverse mineral operations and a strong financial foundation. The company's diversification across different minerals helps buffer against downturns in any single commodity market, while its robust balance sheet provides substantial resilience in turbulent times. Anglo American positions itself as a global mining leader with a broad portfolio of high-quality mining operations and undeveloped resources. Notably, the general trend for commodity prices has been upward since 2016, except for a downturn triggered by the COVID-19 pandemic in March 2020. Since then, there has been a notable recovery, fueled by economic growth in the U.S., Europe, and Asia. This recovery is reflected in projects like the Quellaveco mine in Peru, a massive copper operation where Anglo owns a 60% stake. With a construction cost of $5.6 billion, the mine is expected to pay back its investment within four years, subsequently providing long-term returns over its 30-year operational life. The global economic climate, including factors like the Ukraine conflict, has driven commodity prices, particularly precious metals, due to heavy sanctions on Russia. Despite these positive global market trends, Anglo American faces challenges such as unreliable rail services from Transnet, particularly impacting its Kumba operations. Additionally, the company is moving towards sourcing 100% of its energy needs from renewables in South Africa by 2023, aligning with broader environmental objectives. Financially, Anglo American experienced a decline in its latest annual results, with a 13% drop in revenue and a significant 94% decrease in EPS, as stated in the December 2023 report. This financial pressure is compounded by a $10.6 billion debt load and a comprehensive review of all assets to potentially streamline operations and reduce costs. From a technical perspective, Anglo's stock had shown signs of a bearish head-and-shoulders pattern, breaking down through the neckline at R525, suggesting potential for further declines. However, the dynamic changed with BHP's acquisition offer, which has significantly influenced the stock's trajectory. Initially, Anglo's shares responded positively to the offer, surging from the breakout point in April 2024. Nevertheless, Anglo rejected BHP's initial proposal, where shareholders would receive 0.7097 BHP shares for each Anglo share post-unbundling of Kumba and Amplats. This decision indicates potential for an improved offer, especially if competitors like Rio Tinto or Glencore enter the fray. For investors, Anglo American presents a mix of opportunity and risk, characterized by its strategic asset base and current market dynamics. The company's future stock performance may hinge on further developments in the acquisition talks and its ability to manage operational challenges. Investors should closely monitor these aspects, considering both the strategic value of Anglo's diversified portfolio and the external economic factors influencing commodity markets.
JSE:AGL
by PDSnetSA
Our opinion on the current state of EFORA(EEL)Efora Energy (EEL) is an African oil and gas company that has been a part of the industry landscape since its incorporation in 1993. The company was listed on the Johannesburg Stock Exchange (JSE) in October 1994 and has engaged in various sectors of the oil and gas industry, ranging from production to distribution across several African countries. Efora operates in key regions including Egypt, Nigeria, the Democratic Republic of Congo (DRC), Zimbabwe, and its home base, South Africa. In Egypt, Efora owns the Mena International Petroleum Company, which is focused on developing the Lagia oil field in the Sinai Peninsula. In the DRC, the company holds a significant stake in Semliki, which in turn owns a portion of block III in the northeastern part of the country near the Ugandan border, currently in the exploratory phase. In Nigeria, Efora has a joint venture with Energy Equity Resources (EER) that is centered on lifting and trading Nigerian oil. Africoil, a subsidiary of Efora, plays a critical role in its operations by distributing approximately 45 million liters of oil products monthly through its two depots in Boland and Beitbridge, with the majority of its sales occurring in South Africa. However, Efora has faced significant challenges. The company’s financial performance has shown dramatic fluctuations, as evidenced in the results for the six months ending on 31st August 2021, which were reported on 27th November 2023. These results highlighted a staggering 95% drop in revenue and a headline loss of 0.32 cents per share, an improvement, however, from a loss of 25.08 cents in the previous period. The trading update for the six months to 31st August 2022 projected an earnings turnaround with HEPS expected to be between 0.68 cents and 0.74 cents, contrasting with the loss in the prior period. Despite these efforts at recovery, the company’s shares have been suspended since 9th October 2020 due to delays in publishing its financial statements, reflecting ongoing issues with governance and financial management. On 31st January, Efora announced its intention to produce both interim and final accounts for 2023 by 28th February 2024, signaling potential moves towards resolving its compliance issues. Investing in Efora Energy carries significant risk, largely due to its volatile financial performance, operational challenges, and the overarching regulatory issues demonstrated by the suspension of its shares. Potential investors should exercise caution, keeping an eye on the company’s ability to meet its financial reporting obligations and on any developments that might affect its operational stability and market standing.
JSE:EEL
by PDSnetSA
Our opinion on the current state of FINBOND(FGL)Finbond Group Ltd (FGL) is a company engaged in micro-lending and insurance operations, with a significant presence in both South Africa and the United States. The company has outlined ambitious plans to expand its operations in the US, aiming for 70% to 80% of its income to come from the American market within the next 3 to 5 years. As of the latest reports, Finbond already derives 66% of its income from the US, a market it views as having substantial growth potential. Across both its operational regions, Finbond manages a total of 694 branches. For the six-month period ending on 31st August 2023, the company reported a notable increase in loans advanced by 23.2% and a significant rise in headline earnings per share (HEPS) by 72.4%. However, its net asset value (NAV) saw a slight decline of 2.6%, totaling R1.13 billion. The company attributes the growth in sales volumes to strong performance in both the South African and North American markets, surpassing both the previous corresponding period and the levels seen before the COVID-19 pandemic and regulatory changes in Illinois. Looking ahead, in its trading statement for the fiscal year ending on 29th February 2024, Finbond projected that HEPS would increase by at least 20%, a turnaround from a loss of 15.1 cents in the previous period. This forecast indicates a positive trajectory for the company's earnings, despite previous financial setbacks. From a technical perspective, Finbond's stock has been in a long-term downward trend and has only been drifting sideways since March 2022. Additionally, the trading volume is relatively low, with an average of about R117,000 worth of shares being traded daily. This low liquidity can pose challenges for investors looking to buy or sell large quantities of shares without impacting the price. Given the company's ambitious expansion plans in the US and its significant income generation from that market, Finbond presents certain opportunities for investors interested in a financial services company with growing international exposure. However, the stock's historical performance, the ongoing downward trend, and its status as a penny stock suggest that it may carry higher risks compared to more stable investment options. Potential investors should consider these factors and possibly look for more robust opportunities, especially those seeking less volatility and higher liquidity in their investments.
JSE:FGL
by PDSnetSA
Our opinion on the current state of REINET(RNI)Reinet Investments S.C.A. (RNI) is an investment holding company, with its primary asset being a significant stake in British American Tobacco (BAT), constituting roughly 2.12% of BAT's shares. This stake is valued at approximately $1.8 billion and represents about 31% of Reinet's net asset value (NAV), a substantial decrease from 85% a decade ago. The reduction in the proportion of BAT's contribution to Reinet's NAV is primarily due to the declining share price of BAT, influenced by challenging regulatory environments for tobacco products, particularly in the United States where potential legislative changes regarding menthol cigarettes are being considered. Despite the falling price of BAT shares, Reinet has not shown a strong inclination to divest from BAT, which continues to deliver robust dividend returns, especially from markets in developing countries, even as cigarette sales in developed nations decline. As BAT's share price has dropped, other assets within Reinet's portfolio have grown in relative importance. Notably, Reinet holds a 46% stake in Pension Insurance Corporation (Penscorp), which now accounts for 36.8% of its portfolio. Besides Penscorp, Reinet also manages a diverse array of private equity investments, making up around 15% of its portfolio. As of the fiscal year ending on 30th September 2023, Reinet reported a NAV of 30.89 euros per share, a slight decrease from 31.46 euros in the previous year, reflecting a 1.8% decline. This decrease was attributed to reductions in the fair value of several investments, including its holdings in BAT, Pension Corporation, and the Prescient China funds. On 22nd January 2024, Reinet updated its NAV to 33.47 euros per share, reflecting a total value of 5.734 billion euros with 171.3 million shares outstanding. By 31st March 2024, the company's NAV further adjusted to 3611 euro cents per share. The company's stock performance has been somewhat volatile, especially in response to global events and announcements, such as the BAT's decision to write down the value of its U.S. operations by GBP 25 million (approximately R595 billion), which led to a 10% drop in BAT's share price. This impact on BAT also indirectly affected Reinet's share valuation. Reinet's shares serve as a hedge against the rand's weakness, benefitting from any depreciation in the South African currency. Investors considering Reinet should thus weigh the potential risks associated with its significant exposure to BAT and the broader tobacco industry's regulatory challenges, alongside evaluating the stability and growth potential of its other investments like Penscorp and its array of private equity assets. As always, the future prospects of the rand and its impact on Reinet's performance should be carefully considered.
JSE:RNI
by PDSnetSA
Our opinion on the current state of RENERGEN(REN)Renergen Limited describes itself as an integrated alternative energy business with a focus on investing in renewable energy projects across Africa. Since its listing on the Johannesburg Stock Exchange (JSE) in June 2015, the company has consistently reported financial losses, reflected in a declining share price over the years. Despite these challenges, Renergen has pursued significant ventures, particularly in the liquified natural gas (LNG) and helium sectors. The company successfully secured funding through a R125 million rights issue, fully underwritten, which facilitated access to a R218 million loan facility. Renergen's appeal to investors was further evidenced by its initial public offering on the Australian Stock Exchange (ASX), which was more than two times oversubscribed. A key asset for Renergen is its significant helium reserves, reportedly exceeding 6 billion cubic feet, an element that the U.S. government in 2018 classified as critical to national security, significantly impacting its market value. Noteworthy developments for Renergen include the introduction of an innovative aluminum case designed to maintain vaccine temperatures for up to 30 days, announced on December 10, 2020. This innovation has the potential to be transformative in vaccine logistics, especially in regions with limited cold storage facilities. On June 21, 2021, the company also reported a notable helium discovery in Evander with a 1.1% concentration. Moreover, significant strides were made with a substantial gas find in the Karoo and subsequent sales agreements for helium, marked by a 620% increase in 1P helium reserves announced on November 3, 2021, which notably boosted the company's stock. Despite these advancements, Renergen's financial performance remains a concern. For instance, on June 7, 2023, Renergen secured an additional $750 million funding from Standard Bank and the International Development Finance Corporation for its Virginia Gas project. The project's progress was highlighted in the half-year results to August 31, 2023, where Renergen reported the production of 2,386 tons of LNG and confirmed the approval of substantial senior debt funding. The third quarter of 2023 saw further operational progress with eight wells spudded, including an early successful strike. However, Renergen's financial state continues to be precarious as evidenced by its trading statement for the year ending February 29, 2024, projecting a headline loss significantly wider than in the previous period. While Renergen's ventures in the renewable energy and helium sectors present speculative opportunities for investors, the inherent risks and ongoing financial volatility suggest caution. Potential investors should consider the company's long-term financial health and market conditions. Waiting for a positive shift in the share price trajectory—breaking through its long-term downward trendline—may be a prudent approach before committing to investment. This consideration is essential to mitigate risks associated with the speculative nature of Renergen's business model.
JSE:REN
by PDSnetSA
$JSENTC - Netcare: 1130 Gives Way, Bear Not Over; What Now?See link below for previous analysis. Netcare recently broke below 1130 invalidating the outlook I had that a bottom was in at that level. There's a minor adjustment in the wave count with wave 4 of (C) a flat pattern and wave 5, starting from 1738cps, looks to be taking the shape of an ending diagonal. As to how much lower wave 5 can go is anyone's guess but I will be bearish until i see signs of a reversal.
JSE:NTCShort
by Loyiso_BlaqueSoros_Mpeta
$JSEOCE - Oceana: Testing Double Bottom Neckline ResistanceSee link below for previous analysis. Oceana traded bullishly as previously forecasted. The stock has found resistance at the Double Bottom Neckline zone between 7450 to 7990 cps. Price has consolidated at this range which indicates that the bulls do not want to give the initiative. A clear break beyond 8000cps, preferably on high volume, will validate the Double Bottom and could take the stock towards 11800cps. This is more of a buy and hold stock so I will remain bullish as long as price is above 4148.
JSE:OCELong
by Loyiso_BlaqueSoros_Mpeta
CPR Copper 360 Might do a 180 ?Its early days but CPR Copper 360 might do a 180 ? Here's an except from JSX SENS :- DRILLING RESULTS CONFIRM HIGH GRADE COPPER INTERSECTIONS AT RIETBERG COPPER MINE AND INITIAL SAMPLING LEADS TO DISCOVERY OF NEW HIGH GRADE COPPER DEPOSIT ON SURFACE. All the world will need more copper for the Green Revolution with EV's and Solar, and South Africa especially to assist with our Energy shortages. Will observe but CPR is starting to show some possible strength. Regards Graham.
JSE:CPR
by hitchcoxg
1
Our opinion on the current state of ANGLO(AGL)Anglo American (AGL) is well-regarded for its strategic approach to mitigating the typical risks associated with commodity stocks. The company achieves this through two primary means: a diversified portfolio and a robust balance sheet. **Diversity of Minerals:** Anglo American's portfolio includes a variety of minerals, which spreads the risk and lessens the impact of any single mineral's price fluctuations. This diversification is crucial in stabilizing earnings as different commodities may experience cycles at different times. **Strong Financial Position:** The second strategy Anglo employs is maintaining a strong balance sheet with significant liquidity, which enables the company to withstand negative market trends. This financial resilience is essential for riding out periods of economic downturn. Anglo American markets itself as a globally diversified mining company with an impressive array of world-class operations and undeveloped resources. Since the start of 2016, commodity prices generally trended upward until the COVID-19 pandemic triggered a downturn in March 2020. However, the sector has seen a robust recovery post-pandemic, driven by economic expansion in major economies like the United States, Europe, and parts of Asia. A notable project under Anglo American's belt is the Quellaveco mine in Peru, a significant copper venture where Anglo owns a 60% stake. The project, which cost $5.6 billion to develop, is expected to pay back its investment within approximately four years, with a projected operational lifespan of 30 years thereafter. This mine exemplifies the company's capacity for executing large-scale and profitable projects. The global economic landscape, including the COVID-19 recovery and geopolitical tensions such as the conflict in Ukraine, continues to influence commodity prices. Precious metals, in particular, have seen price increases due to heavy sanctions on Russia. These factors collectively contribute to a favorable outlook for companies like Anglo American, which are poised to benefit from the ongoing commodity boom. However, challenges persist. Issues such as unreliable rail service from Transnet, especially impacting operations like Kumba, and increased load shedding have posed significant operational challenges. Despite these hurdles, Anglo American plans to fully transition to renewable energy sources in South Africa by 2023, reflecting its commitment to sustainability. Financially, Anglo American faced a tough year in 2023, with revenue down 13% and earnings per share (EPS) dropping dramatically by 94% in US dollars. The full ramp-up of Quellaveco was a high point, but it couldn't offset the significant revenue impacts from cyclically low prices in PGMs and diamonds. The company is undergoing a comprehensive review of all its assets to improve financial health further. Despite these pressures, Anglo American's share price has shown resilience. After declining significantly, it began to recover following an acquisition offer from BHP, which proposes to exchange 0.7097 BHP shares for each Anglo share, post the unbundling of Kumba and Amplats. This offer could potentially increase, especially if competitors like Rio Tinto or Glencore enter the fray. In conclusion, Anglo American's strategic management of commodity risks, coupled with its robust project pipeline and operational challenges, paints a complex but potentially rewarding picture for investors. As always, potential investors should monitor these developments closely, considering both the opportunities and the risks inherent in the commodity sector.
JSE:AGL
by PDSnetSA
Our opinion on the current state of BHP(BHG)BHP is a global commodities company based in Melbourne, Australia, with a workforce of 62,000 employees predominantly in the Americas and Australia. It is engaged in the extraction and processing of minerals, oil, and gas. BHP's extensive operations include ownership stakes in some of the world's leading mineral resources. BHP owns a significant 57.5% of the Escondida mine in Chile, one of the largest copper producers globally, which also yields gold and silver. It has a 33.75% stake in Antamina in Peru, known for its copper and zinc production. It fully owns Pampa Norte, which produces copper cathode in Chile's Atacama Desert. In Brazil, BHP holds a 50% share in Samarco, an iron ore producer, and a one-third interest in the Cerrejon coal mine in Colombia. In Canada, BHP holds mineral rights in Saskatchewan, home to one of the largest unexploited potash deposits globally. In Australia, it owns the Olympic Dam, one of the largest bodies of copper, uranium, and gold ore in the world, and Western Australia Iron Ore, a system of five mines connected by over 1000km of railway lines. Additionally, BHP owns Queensland Coal, which includes the Mitsubishi Alliance and Mitsui Coal, and the Mt. Arthur coal mine in New South Wales. Its Nickel West operation in Australia includes a nickel mine with smelters, concentrators, and a refinery. In the petroleum sector, BHP possesses high-quality resources in the Gulf of Mexico, Australia, Trinidad, and Tobago. For the six months ending on 31st December 2023, BHP reported a revenue increase of 6% but saw a significant drop in headline earnings per share (HEPS) by 48%. The company's tangible net asset value (NAV) decreased slightly from $8.91 to $8.68 per share. BHP highlighted strong performances at its iron ore operations in Western Australia and record copper production in South Australia and Chile. The company is also expanding its potash production capacity in Canada, illustrating its strategic growth initiatives. Despite global commodity price volatility and varied demand across different markets, BHP noted healthy demand from China and a strong market in India. As of the nine-month report to 31st March 2024, BHP remains on track to meet its annual production targets for copper, iron ore, and energy coal, with copper volumes increasing by 10%. The share price trajectory of BHP has been influenced by broader economic factors, including the commodity cycle. Since a sharp decline at the onset of the coronavirus pandemic, the share price had been on an upward trend until early 2024 when it faced challenges from falling commodity prices. On 25th April 2024, BHP announced a significant move in making a share offer for the entire issued share capital of Anglo American, contingent on the unbundling of Amplats and Kumba. This strategic attempt could potentially initiate a bidding war with major industry players such as Rio Tinto and Glencore, highlighting BHP’s active role in industry consolidation. BHP's portfolio, marked by its diversity and scale, positions it uniquely in the mining sector, though it remains susceptible to the inherent volatilities of the commodity markets. This backdrop frames BHP as a potentially lucrative yet fluctuating investment option, reflective of the dynamic nature of the global commodities industry.
JSE:BHG
by PDSnetSA
Our opinion on the current state of CORONAT(CML)Coronation Fund Managers (CML) is a prominent asset management firm in South Africa, notable for being the only one of its kind listed on the Johannesburg Stock Exchange (JSE). Established in 1993, the company experienced significant growth until 2015, at which point the founding CEO resigned and Adrian Pillay took the helm. Despite Pillay's qualifications, his tenure has seen challenging times for Coronation, particularly due to investment missteps. The firm faced substantial losses from investments in African Bank and Steinhoff, which significantly impacted its reputation and led to a reevaluation of its asset selection capabilities by the investment community. This scrutiny has resulted in a noticeable outflow of institutional funds, which is critical in a business heavily reliant on confidence and trust in judgment and expertise. The asset management industry depends on maintaining a high level of trust with institutional fund managers, who must believe in the asset manager's decision-making abilities. This typically requires a team of highly qualified individuals with proven track records. However, even the most skilled teams can make errors that result in financial losses, as seen in Coronation's case. Further complicating matters, on February 8, 2023, Coronation announced a lost appeal with the South African Revenue Service (SARS) regarding additional taxes, which may lead to the suspension of its dividend payments. This news sharply drove down the share price. For the fiscal year ending on September 30, 2023, the company reported a 2% decrease in revenue and a dramatic 50% decline in headline earnings per share (HEPS). With R602 billion under management, the firm also noted net outflows amounting to 10% of average assets under management (AUM). These outflows were attributed to a combination of industry-wide withdrawals from global emerging markets due to a decade of lackluster performance and the shrinking South African savings pool. Looking ahead, in a trading statement for the six months ending March 31, 2024, Coronation estimated that HEPS would rebound to at least 190c compared to just 6.2c in the previous period, suggesting a possible recovery or stabilization. Technically, Coronation's shares saw a significant rise from 2008 until peaking at R115 per share on December 30, 2014. Under new leadership, the share price has faced declines, particularly with the onset of COVID-19, and has continued on a downward trajectory, now moving sideways and downwards. The current price-to-earnings (P/E) ratio stands at around 16.31%, which might seem attractive, but the potential for further declines cannot be dismissed. Given this backdrop, a cautious approach would be advisable for potential investors. It is recommended to monitor the stock for a clear upward break from its long-term downward trend before considering investment, though such a shift does not appear imminent.
JSE:CML
by PDSnetSA
Our opinion on the current state of KUMBA-IO(KIO)Kumba Iron Ore (KIO), a subsidiary mainly controlled by Anglo American with a 79% stake, is one of the top iron mining operations, renowned for its substantial success in the industry. The company’s share price experienced significant volatility, dropping to R223 in March 2020 due to the COVID-19 pandemic, but it managed a strong recovery to R668 before facing another decline after the March 2022 quarterly results. Kumba's business model heavily relies on exports, which constitute 94% of its total sales. This large percentage indicates that while the company is less dependent on the local South African market, it remains susceptible to fluctuations in the rand's value and logistical challenges related to rail transport to ports. In response to operational challenges and to lessen its dependence on Eskom, Kumba plans to construct a 100mw solar park over the next three years. In October 2022, the company faced significant disruptions due to a force majeure declared by Transnet, leading to substantial production losses—estimated at about 50,000 tons per day initially, escalating to 90,000 tons after seven days. This incident severely impacted the company’s ability to meet its export commitments, resulting in considerable financial losses estimated at around $8.5 million per day in production and $11.7 million in lost export revenue. Despite these challenges, Kumba reported a strong financial performance for the year ending 31st December 2023, with a 16% increase in revenue and a 26% rise in headline earnings per share (HEPS). The company achieved an average realized FOB export price of US$117 per tonne, which was 15% above the benchmark, and managed to reduce its C1 unit costs to US$41 per tonne, thanks to cost savings of R1.0 billion. These factors contributed to a resilient EBITDA margin of 53%, up from 50%, and a robust closing net cash position of R13.2 billion. However, Kumba is considering reducing its workforce by 490 employees, indicating ongoing efforts to streamline operations and manage costs. For the first quarter ending 31st March 2024, Kumba reported a 2% decrease in total production and a 10% reduction in sales, primarily driven by a 12% decrease in production at the Kolomela mine. In contrast, production at the Sishen mine increased by 4%, supported by healthy buffer stocks. The company's shares are currently trading at a price-to-earnings (P/E) multiple of 6.43 and offer a dividend yield of 8.23%. These figures suggest that while the investment presents risks associated with commodity price fluctuations and operational challenges, it also offers potential high returns through dividends. Additionally, the ongoing offer by BHP to purchase Anglo American includes plans for the unbundling of Kumba. This proposal adds another layer of uncertainty regarding Kumba’s future, making it a potentially volatile but rewarding investment for those willing to navigate the complexities of the commodity market and corporate restructuring.
JSE:KIO
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice Group (MCG) is a prominent player in the African entertainment industry and stands out as one of the world's fastest-growing pay-TV broadcast providers. With a subscriber base of 21.1 million across 50 countries, the company's operations are split between South Africa, where it holds 42% of its subscribers, and the rest of Africa, accounting for the remaining 58%. Originally spun out of Naspers, MultiChoice was listed on the Johannesburg Stock Exchange (JSE) on 27th February 2019. The structure of MultiChoice’s business is particularly attractive to private investors. The company’s revenue primarily comes from annuity income generated through debit orders from a diverse clientele, which provides a stable financial inflow. Furthermore, as a service company, MultiChoice does not require significant working capital nor does it need to maintain large inventory stocks, enhancing its operational efficiency. However, MultiChoice faces potential challenges from regulatory changes and technological advancements. The Independent Communications Authority of South Africa (Icasa) is contemplating regulatory changes that could affect MultiChoice's dominance in the pay-TV market, particularly concerning its ability to secure exclusive sports broadcasting rights. Additionally, the widespread adoption of 5G and the availability of free online content could dilute the market share of traditional pay-TV services. Despite these challenges, MultiChoice has shown resilience and adaptability. The COVID-19 pandemic, for instance, temporarily boosted demand for home entertainment, benefiting MultiChoice. Moreover, the company's strategic partnerships, such as those with Sky News and NBC Universal to enhance its Showmax service, demonstrate its commitment to staying competitive in a rapidly evolving media landscape. For the six months ending on 30th September 2023, MultiChoice reported a slight decline in revenue and headline earnings per share (HEPS), which the company attributed to a contraction in its subscriber base and operational disruptions caused by load shedding in South Africa. Despite these setbacks, the company's robust base in the Rest of Africa continues to grow. The corporate dynamics at MultiChoice have been further complicated by Canal+'s increased stake in the company, leading to a mandatory takeover bid. After initially rejecting Canal+'s offer as too low, MultiChoice eventually entered into a cooperation agreement to facilitate the takeover, reflecting the evolving corporate governance landscape within which the company operates. In conclusion, while MultiChoice faces certain challenges from regulatory pressures and market competition, its strong subscriber base, strategic initiatives, and recent corporate developments suggest it remains a valuable investment. However, investors should remain cautious and consider the potential impacts of regulatory changes and market competition on the company’s future performance.
JSE:MCG
by PDSnetSA
Our opinion on the current state of CLICKS(CLS)Clicks Group describes itself as a retail-led healthcare group, comprising its flagship brand Clicks, as well as GNC and The Body Shop. It operates 782 stores, 585 of which include pharmacies, making it the largest pharmacy chain in Southern Africa. Despite the increasing trend of retail outlets incorporating pharmacies, Clicks' main competitor remains the listed company, Dischem. A previous challenge for the group was its association with the fifty-nine Musica stores, which have now been closed. On 10th May 2021, Clicks made a significant expansion by acquiring the pharmacy business of Pick n Pay, which included twenty-five pharmacies located within Pick 'n Pay stores. These pharmacies are being rebranded to Clicks, further solidifying its market presence. Historically, Clicks has shown remarkable stability and growth; the share price has surged by more than 2500% since its listing, significantly outperforming the JSE's average over the same period. This performance underscores Clicks as one of the top blue-chip shares on the JSE. The company has demonstrated resilience, proving to be relatively recession-proof and continuing to deliver impressive results. For the six months ending on 29th February 2024, Clicks reported a 9% increase in turnover and a 13% rise in headline earnings per share (HEPS). The company highlighted a 14.1% growth in total income to R6.6 billion, driven by strong sales in higher-margin private label products and the beauty category, along with revenue from Sorbet franchise fees. Despite its high price-to-earnings (P/E) ratio of 27.37, Clicks is viewed as an excellent medium-term investment, suitable for every private investor's portfolio. The share's consistent upward trajectory over the past 15 years resembles a line moving from the bottom left-hand corner of the screen to the top right-hand corner, illustrating its steady growth. Although the share price has experienced a slight decline since the beginning of 2024, this could present a favorable buying opportunity for investors.
JSE:CLS
by PDSnetSA
$JSEWHL - Woolworths: Double Top Neckline Breached!See link below for previous analysis. Price has breached the 5824 neckline. Now, there are two ways to interpret this pattern: 1- the tradition way; in this case this is a Double Top and the price target is 3600cps. 2- the Elliot Wave way; this is a flat and price can resume the uptrend. The only certainty is uncertainty; this is the why it is key to think in probabilities. I will sit on my hands and allow price to guide me.
JSE:WHL
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of OANDO(OAO)Oando PLC (OAO) is an oil and gas company with significant operations in Nigeria and listings on both the Johannesburg Stock Exchange (JSE) and the Nigerian Stock Exchange. The company's shares present a high-risk investment profile for several reasons that are intrinsic to its operational context and the nature of its industry. **1. Commodity Price Volatility:** As an oil and gas company, Oando's financial performance is heavily dependent on the fluctuating international prices of oil. This exposes the company to global market trends and economic cycles over which it has little control. **2. Political and Economic Instability:** Operating primarily in Nigeria adds another layer of risk due to the country's political instability and economic fluctuations. This environment can affect operations and profitability through changes in regulation, fiscal policies, and other governmental actions that could impact the business. **3. Thinly Traded Shares:** Oando’s shares are thinly traded, which can result in liquidity issues for investors. This means buying or selling shares without affecting the price can be difficult, potentially complicating entry and exit strategies for private investors. **Recent Financial Performance:** - **For the year ending 31st December 2020:** Oando reported a substantial after-tax loss of 141 billion naira, indicating a downturn in business performance with a 17% drop in turnover. - **For the year ending 1st December 2021:** The company saw a reversal in fortunes, albeit on a much smaller scale, reporting a profit of 34.7 million naira. - **For the year ending 31st December 2022:** The company returned to a loss, posting an 81.2 million naira deficit. **Regulatory and Trading Issues:** - On 3rd April 2024, Oando’s share trading was suspended on the JSE, pending the publication of its year-end results for 2022 and interim results for 2023, reflecting regulatory concerns and potentially significant issues in financial reporting or operational performance. - Trading remains suspended as of the latest updates, with the share price last recorded at 9 cents. Given these circumstances, Oando represents a highly speculative investment. The combination of high operational risks, political and economic instability in its primary region of operations, commodity price dependence, and recent financial performance makes it a precarious choice for private investors seeking stable returns. Investors should exercise extreme caution, considering both the macroeconomic factors affecting the oil and gas sector and the specific challenges facing Oando. It is advisable to closely monitor developments related to the company’s regulatory issues, financial health, and the broader Nigerian political and economic environment before considering an investment in such a volatile entity.
JSE:OAO
by PDSnetSA
Our opinion on the current state of GTCSA(GTC)GTC, or Globe Trade Centre, is a significant player in the real estate market of Central and Eastern Europe, managing a substantial portfolio of properties across several key cities including Warsaw, Bucharest, Budapest, Belgrade, Sofia, and Zagreb. The company's operations encompass forty-seven office buildings and six retail properties, combining for a gross lettable area (GLA) of approximately 829,000 square meters. With assets valued around 2.35 billion euros, GTC plays a crucial role in the region’s property market. The company is dual-listed, with shares available on both the Warsaw Stock Exchange (WSE) and the Johannesburg Stock Exchange (JSE). For the year ending 31st December 2023, GTC reported a 10% increase in rental revenue, reflecting a strong operational performance despite various market challenges. The loan-to-value (LTV) ratio stood at 49.3%, indicating a moderate level of debt used in financing the company's assets. This level of LTV shows that the company is leveraging its capital structure efficiently, balancing risk and growth effectively. Occupancy rates were robust at 87%, a healthy indicator of the demand for GTC’s property offerings and management effectiveness in a competitive market. Additionally, the company concluded the year with a strong liquidity position, holding 60 million euros in cash. This financial health is crucial for sustaining operations and pursuing further growth opportunities. Despite its operational successes and strategic market positioning, GTC faces a significant challenge regarding its stock's liquidity on the Johannesburg Stock Exchange. The shares are noted as being extremely thinly traded, which poses difficulties for private investors looking to buy or sell the stock without affecting its price significantly. This lack of liquidity can deter investment, as it may complicate entry and exit strategies for investors. For those considering investing in GTC, it's important to weigh the solid operational performance and strategic asset portfolio against the potential trading challenges on the JSE. The company’s strong presence in a diverse range of key Eastern European markets, combined with its sound financial management, positions it well for future growth. However, the trading liquidity issue is a significant consideration that needs careful evaluation, particularly for those looking to engage in more flexible or short-term trading strategies. Overall, GTC appears well-managed and positioned to capitalize on the growth opportunities in Central and Eastern European real estate markets. Prospective investors should keep an eye on developments that might increase JSE trading volumes or consider alternative ways to invest, such as directly on the Warsaw Stock Exchange where liquidity issues may be less pronounced.
JSE:GTC
by PDSnetSA
Our opinion on the current state of COPPER360(CPR)Copper 360 is a company primarily focused on two aspects: processing historical mined copper rock dumps and mining surface and shallow copper resources. This dual focus not only targets copper production but also aims at environmental cleanup, which is increasingly significant in today’s mining industry. The company has leveraged an extensive database acquired from major mining entities like Newmont and Gold Fields, who previously operated in the district. This strategic move has provided Copper 360 with valuable historical data that could enhance its exploration and production capabilities. Financially, Copper 360 showed signs of improvement in its fiscal year ending 31st August 2023. Although still operating at a loss—R4.9 million—it marked a significant reduction from the R31.6 million loss reported in the previous period. This improvement was attributed to increased production and the end of major capital expenditures. Furthermore, the acquisition of Nama Copper Resources has poised the company to boost production while reducing execution build and delivery risks. The company has set an ambitious target for FY 2025 with an expected EBITDA of over R650 million and plans for major resource upgrades to enhance mining flexibility and growth. In terms of funding, the company successfully raised R274 million on 21st December 2023 to support the acquisition of Nama Copper and to foster production growth at the Rietberg mine. Earlier, in February 2023, the company had also raised just under R100 million through a share sale, underscoring ongoing efforts to secure the capital necessary for expansion. A notable strategic development was the memorandum of understanding signed with Far West Gold Recoveries in March 2024, indicating potential collaborations to leverage existing mining infrastructure and technology. This agreement aligns with the company’s disclosure that the dumps could contain up to 450,000 tonnes of copper metal, illustrating the significant untapped potential of its resources. The recent production report from 24th April 2024 indicated that Copper 360 had produced 136 tons of high-grade copper concentrate (over 30%) from the Northern Cape, which showcases the quality of the extracted copper and the efficacy of their processing methods. However, the company’s share price trajectory has shown volatility since its listing on 12th April 2023, with a noticeable drift downwards from the initial 500c to 371c. This performance may raise concerns about the company’s valuation and market confidence, especially given the inherent risks of the commodity market and the specific challenges of operational ramp-up in mining. For investors, Copper 360 presents a high-risk, high-reward opportunity. While the company is making strides in increasing production and improving financial health, the fluctuating nature of commodity prices, the necessity of further capital, and the operational risks associated with mining startups make it a volatile investment. Prospective investors should approach with caution, closely monitor the company’s operational progress and market conditions, and consider waiting for more stability in the share price before committing capital.
JSE:CPR
by PDSnetSA