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Our opinion on the current state of ORIONMIN(ORN)Orion Minerals (ORN) is an Australian-based exploration company dual-listed on the Johannesburg Stock Exchange (JSE) since September 2017 and the Australian Stock Exchange in Sydney. The company focuses on revitalizing the Prieska copper and zinc mine, which was previously operated by Anglovaal and ceased operations in 1990 after two decades of active mining, yielding significant quantities of zinc and copper concentrate. Orion is exploring opportunities to reboot the Prieska mine using a mechanized approach that minimizes labor, aiming to address the main challenge of flooding that has plagued the mine. This ambitious project involves pumping out nearly 9 million cubic meters of water from the mine’s flooded infrastructure. Production is optimistically slated to begin in 2024. In addition to these efforts, Vedanta Resources, operating the adjacent Gamsberg mine, is considering the development of a smelter that would potentially service the entire regional mining sector, including potential resources from Namibia. This development could provide significant synergistic benefits to Orion's operations if realized. On the financial front, Orion has taken significant steps towards funding its initiatives. On 8th September 2022, the company secured R34.5 million from the Industrial Development Corporation (IDC) for a 43.75% stake in its new Okiep copper mining venture. Subsequently, on 21st October 2022, Orion secured a R250 million line of credit with the IDC. These moves demonstrate a robust partnership with the IDC, which has become a strategic funding ally for Orion’s flagship projects, including both the Okiep Copper Project and the Prieska Copper Zinc Mine. Despite these strategic advances, Orion remains a high-risk investment. For the six months ending 30th June 2023, the company reported a consistent loss of A$15.2 million. The headline loss per share slightly improved to 31c from 33c in the previous period. Furthermore, the company has recently updated its mineral resource estimates for the Prieska Copper Zinc Mine (PCZM), increasing the resource estimate to substantial new levels, which suggests potential for future development. As of 30th September 2023, Orion reported having $15.74 million in cash, indicating a solid liquidity position to support its immediate operational needs. However, the recent announcement on 17th April 2024 regarding the acquisition of the Okiep mineral rights and a subsequent halt on trading due to a material announcement about exploration results at the Okiep copper mine indicates significant ongoing developments and potential volatility. Investors considering Orion Minerals must weigh the high-risk nature of mining exploration against the potential for substantial returns if Orion successfully navigates the considerable operational and financial challenges ahead. Caution is advised, with the implementation of a strict stop-loss strategy to manage potential losses, given the volatile nature of the stock and the exploration sector it operates within.
JSE:ORN
by PDSnetSA
Our opinion on the current state of INSIMBI(ISB)Insimbi Group is engaged in the manufacturing and supply of specialist products within the industrial sector. Their operations encompass sourcing, buying, packaging, processing, and recycling of ferrous and non-ferrous alloys, refractory and foundry materials, as well as plastic blow-moulding and injection moulding. The group also offers technical support to users of their products, which adds a service dimension to their primary manufacturing and supply operations. In their financial update for the six months ending 31st August 2023, Insimbi reported a revenue decline of 4% and a decrease in headline earnings per share (HEPS) by 6%. The company attributed these results to challenging operating conditions, though it noted that price fluctuations in key commodities like copper, aluminium, nickel, and steel had somewhat balanced out. Despite these challenges, revenue was largely maintained at over R3 billion, a slight decline compared to the same interim period in 2022, with operating profit falling by 9%. Looking ahead, Insimbi issued a trading statement for the year ending 29th February 2024, forecasting a substantial reduction in HEPS, anticipated to be between 50% and 60% lower than the previous period. This significant expected drop in earnings highlights ongoing operational challenges and possibly continued volatility in commodity prices which directly impact their business model. From a technical analysis perspective, Insimbi’s share price has seen considerable fluctuations over the years. The stock was on an upward trend until June 2018, but it then fell to a low of 50c by December 2020. The share price saw a recovery, climbing to a high of 139c in June 2023, before entering another downward trend. These movements suggest a volatile stock, heavily influenced by external market conditions and internal operational factors. Given the company's exposure to the fluctuating prices of commodities, Insimbi’s performance is intrinsically linked to the broader economic conditions, particularly within South Africa. A recovery in the South African economy could potentially benefit Insimbi, yet the stock remains a high-risk investment due to its susceptibility to market cycles and commodity price changes. Additionally, with an average daily trading volume of around R29,000, the share is considered marginal for investment by private investors due to liquidity concerns, which could make entry and exit positions more challenging to manage. In conclusion, while Insimbi may stand to gain from an economic upturn, potential investors should carefully consider the risks associated with its commodity-dependent business model and relatively low liquidity in the market.
JSE:ISB
by PDSnetSA
$JSEABG - ABSA: Heavy Resistance + Head & Shoulders = BearishSee link below for previous analysis. A look at the bigger picture of ABSA shows that the stock has a very strong resistance zone between 20371 to 21100cps. The stock has tested this zone on three occasions giving what can be viewed as a Triple Top over 7 years. Interestingly, the bull market from March 2020 has culminated in a textbook Head & Shoulders pattern which has recently been validated by a break below the neckline. The traditional Head & Shoulder price target is around 9000cps. *Price tends to fail in reaching the traditional approximation. The trend is clearly bearish.
JSE:ABGShort
by Loyiso_BlaqueSoros_Mpeta
CPI - In The MoneyThe chart below highlights the performance of Capitec Bank, which has declined by over 10% since last week's research note where clients were to a pending sell/short. Included in my note was the following: 1. Weekly Chart highlighting the potential price path. 2. The TTG as of Friday's close. 3. The 7-day Technical Trend Rating shows the share as trading in overbought territory. 4. The 7-Week Technical Trend Rating shows the share as trading in 'high bullish momentum/approaching overbought' territory. 5. A common valuation metric for banks is Price-to-book. As of Friday's close, Capitec trades at 6.48x vs substantially lower levels for it's peer group.
JSE:CPI
by techpers
Biggest micro lender could be hurt by the dollar (short)South Africa's biggest micro lender could be hurt by the dollar and global uncertainty around the world since the banks make profit from people paying back loans and putting in deposits, people deposit less when everything in the economy becomes expensive because savings lags when compared to current state of the value of money and the purchasing power people have. This year financial stocks could also be hurt by the uncertainty that comes with elections also the policies that the new or current leadership of the country could choose to implement.
JSE:CPIShort
by KhoraCapital
Our opinion on the current state of AFRIMAT(AFT)Afrimat, an open-pit mining company based in Southern Africa, has developed a robust reputation for its diverse supply of composites, construction materials, and other commodities to various industries. Historically one of the best performing shares on the Johannesburg Stock Exchange (JSE) until the end of 2015, Afrimat has navigated through periods of economic turbulence, including the COVID-19 crisis, and demonstrated resilience in a fluctuating commodities market. The company reached a notable high of R76 on April 6, 2022, but since then, its share price has experienced a decline, coinciding with the downturn in the commodities cycle. Afrimat has, however, strategically insulated itself from the broader difficulties facing the construction industry through its acquisition of the Demaneng iron mine in the Northern Cape. This acquisition underscores Afrimat’s approach to mitigating sector-specific risks and stabilizing its earnings. Further diversification efforts have seen Afrimat expanding into other base minerals such as manganese, chrome, and coal. The CEO, Andries van Heerden, has emphasized the company's proactive strategy in acquisitions, which has been a significant component of its growth. Notable acquisitions include a non-binding interest in Unicorn Capital Partners for an anthracite mine, the purchase of Coza Mining, which is involved in mining for iron and manganese, and the acquisition of the Gravenhage manganese mine in the Kalahari Manganese Field for $45 million plus an additional R15 million. The company also acquired Glenover Phosphate for R550 million. On March 20, 2022, Afrimat transitioned its listing from the Basic Materials Construction and Materials sector to the General Mining sector on the JSE, reflecting a more accurate representation of its business operations. This was followed by the strategic acquisition of the construction materials company Lafarge for $6 million, demonstrating Afrimat's continued expansion and consolidation within the industry. Financially, Afrimat has shown strong performance, with a report for the six months to August 31, 2023, indicating a revenue increase of 9.6% and a rise in headline earnings per share (HEPS) by 4.4%. The company's net asset value (NAV) also increased by 10.8% to 2750c per share. Afrimat maintains a strong balance sheet with a significant net cash balance and a favorable debt-to-equity ratio, highlighting its financial health and operational efficiency. Looking forward, Afrimat provided a trading statement estimating that HEPS for the year ending February 29, 2024, would rise by between 21% and 26%. This forecast suggests continued financial improvement and operational success. Despite the general decline in commodity prices, which has impacted shares across the sector, Afrimat's well-diversified business model and low debt levels position it as a valuable investment. The recent approval from the Competition Commission for its acquisition of Lafarge further strengthens this position. With a price-to-earnings (P/E) ratio of 13.44, Afrimat presents as a reasonably priced investment, particularly for those looking to capitalize on opportunities within the mining and materials sector.
JSE:AFT
by PDSnetSA
Our opinion on the current state of PURPLE(PPE)Purple Group (PPE) operates as a dynamic trading platform and asset management company focused predominantly on the private investor market in South Africa. The company stands out for offering the lowest trading fees on the Johannesburg Stock Exchange (JSE), making it a compelling choice for budget-conscious investors. Its operational model is divided into three primary segments: 1. **Easy Equities**: This division democratizes investing by allowing the purchase of fractional shares at exceptionally low costs. For example, purchasing R100 worth of shares costs just 64c, making it accessible even for those with minimal investment capital. This platform has proven especially popular among first-time investors, with 95% of its accounts belonging to newcomers and a robust active investor base of 150,000. 2. **Emperor Asset Management**: This segment manages funds on behalf of clients, providing tailored investment solutions and strategies to maximize returns. 3. **GT247**: Serving as a derivatives trading platform, GT247 caters to more sophisticated investors interested in leveraging derivatives to speculate on price movements or hedge existing investment positions. On the financial front, Purple Group successfully finalized a rights issue on 18th May 2023, raising R105 million with the backing of over 27% of its shareholders. The terms of the issue offered shareholders 10.20567 new shares for every 100 shares held at a price of 81c each, representing a 31.87% discount to the volume-weighted average price as of the week ending 16th May 2023. For the six-month period ending 29th February 2024, Purple Group reported a remarkable revenue increase of 29.3% and a shift in headline earnings per share (HEPS) from a loss of 0.84c to a gain of 0.78c. This positive turnaround underscores the company’s resilience and the growing trust among its client base, even amid challenging economic conditions. Purple Group’s shares are actively traded, with an average daily turnover of around R400,000. After experiencing a "double top" formation peaking around 340c in early 2022, the share price suffered a decline but has shown signs of recovery since early March 2024. Following our investment strategy advice, the stock broke through its 65-day exponentially smoothed moving average on 4th March 2024 at 66c and has since advanced to 90c. Given the recent performance improvements and strategic initiatives, we see significant upside potential for Purple Group. The company's innovative approach to investing, combined with its ability to adapt to market demands and maintain high service levels, positions it well for continued growth and makes it an attractive investment prospect in the South African financial services sector.
JSE:PPE
by PDSnetSA
$JSEPPE - Purple Group: Bullish On Fundamentals & TechnicalsSee link below for previous analysis Purple Group released its interim group results for the six months ended 29 February 2024 yesterday and the market loved it. Highlights: -Group revenue increased by 29.3% to R188.8 million -Group operating expenses decreased by 0.4% to R141.8 -Profit attributable to ordinary shareholders of R10.9 million, compared to a loss of R10.6 million in the prior comparative period, representing an increase of 202.3%. - Group basic and headline earnings per share increased 192.9% to 0.78 cents per share - The Group's net asset value per share increased by 7.4% to 41.60 cents Technically, we have all that I previously mentioned; mainly -the target of 46cps has been reached to the cent -a clear break and consolidation above the zero-line by the MACD -12/50EMA has given a buy signal and the EMAs are now providing support -strong volume over the last 14 trading sessions These are good reasons to be optimistic that a bottom is in at 46cps.
JSE:PPELong
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of AH-VEST(AHL)AH Vest, trading under the All-Joy brand, is a significant player in South Africa's condiment market, notably as the country's second-largest producer of tomato sauce. The company is actively expanding its product offerings into ready meals, soups, and canned vegetables, diversifying beyond its traditional sauce lines to capture a broader share of the food market. For the six-month period ending 31st December 2023, AH Vest reported a modest revenue increase of 1.9%, alongside a substantial rise in headline earnings per share (HEPS) by 37%. This growth in earnings is particularly notable, suggesting improved operational efficiency or cost management. The company's net asset value (NAV) stood at 48.24c per share, indicating a stable financial position. A significant development for AH Vest during this period was the installation of generators at its production facility. This investment was aimed at enhancing service levels, which increased from 80.8% in the previous year to 82.7%. Despite this improvement, the company noted that its service levels still lag behind the industry average. The need for increased working capital was highlighted as a pressing concern, impacting the business's overall performance as it seeks to maintain and expand its operational capabilities. However, one of the main challenges facing AH Vest is its market liquidity. The share is virtually untraded on the Johannesburg Stock Exchange (JSE), presenting a significant barrier for private investors interested in the company. This lack of trading activity can make it difficult for investors to enter or exit positions, potentially leading to higher risks associated with price volatility when trades do occur. Given the company's strategic expansion and the recent improvements in operational infrastructure, AH Vest appears to be positioning itself for future growth. However, the trading issues present a notable caveat for potential investors, emphasizing the need for careful consideration of market liquidity when evaluating investment opportunities in smaller or less actively traded companies.
JSE:AHL
by PDSnetSA
Our opinion on the current state of SHOPRITE(SHP)Shoprite, Africa's largest grocery retailer and consumer goods company, has navigated intense competitive pressures in the market, which has historically prevented supermarkets from significantly marking up prices due to price competition. The company's share price experienced a significant dip, falling from a high of R275 in March 2018 to around R100 in July 2020, primarily due to market conditions and internal challenges. However, it has since shown a robust recovery, indicating resilience and a potential for future growth, especially with any improvement in the South African economy. The influence of Shoprite’s chair, Christo Wiese, remains notable despite his reduced stake in ordinary shares to just over 10%. He retains significant control through 265 million deferred shares, amounting to 42% control of the company. This dynamic suggests a continued strong influence in the company's strategic direction. Shoprite has strategically streamlined its operations by exiting markets in Uganda, Madagascar, Nigeria, and Kenya, focusing on regions where it can leverage its strengths more effectively. This is complemented by its agreement to acquire 56 Cambridge and Rhino food stores from Massmart, enhancing its retail footprint and market penetration. The global downturn due to the COVID-19 pandemic has set a challenging economic backdrop, but recovery in global economies, particularly the American market, is expected to spur economic improvement across Africa. This prospect bodes well for consumer spending, which is crucial for Shoprite's business model focused on volume-driven sales. Recent unrest and looting had a significant impact, with 119 of its stores severely affected. Despite these setbacks, the company reported a 13.9% increase in merchandise sales and a 7.6% rise in headline earnings per share (HEPS) for the six months ending 31st December 2023. The company also expanded its physical presence, opening a net of 369 stores over the past 12 months, reflecting aggressive growth and confidence in its business model. Shoprite's management highlighted that despite the high base from the previous year, the growth in sales from its core business segment was significant, with an additional R12.4 billion in customer spending compared to the same period last year. This performance notably outpaces the rest of the market growth in South Africa, underscoring Shoprite's competitive edge and operational efficiency. Given the stock's current valuation, which remains more than 13% below its record high of 27632c set on 8th January 2024, Shoprite appears undervalued. The technical analysis further supports this optimism; the share broke above its 200-day moving average on 2nd September 2020, when it traded at 11696c. Over the subsequent 3.5 years, the share has appreciated by 136%, reflecting substantial growth and investment potential. Overall, Shoprite continues to demonstrate its capacity to navigate market challenges, adapt to changing economic conditions, and capitalize on growth opportunities. This positions the retailer as an attractive investment, particularly for those betting on a recovery in the African retail sector and broader economic improvement post-pandemic.
JSE:SHP
by PDSnetSA
Our opinion on the current state of PURPLE(PPE)Purple Group (PPE) is a distinctive entity in the financial sector, specifically tailored for private investors and known for providing some of the lowest trading costs on the Johannesburg Stock Exchange (JSE). The company is segmented into three divisions: Easy Equities, Emperor Asset Management, and GT247. **1. Easy Equities:** This platform is particularly innovative as it allows investors to purchase fractional shares with minimal transaction costs. For example, buying R100 worth of a share costs only 64c. This feature has attracted a significant number of first-time investors, with 95% of the accounts opened under this category, resulting in about 150,000 active investors. **2. Emperor Asset Management:** This division manages funds on behalf of clients, leveraging expertise to deliver competitive investment returns. **3. GT247:** This platform caters to more sophisticated investors interested in derivatives trading, rounding out Purple Group’s offerings to cover a broad spectrum of investment needs. In May 2023, Purple Group undertook a rights issue to raise R105 million, supported by over 27% of its shareholders. This funding strategy offered shareholders an opportunity to buy additional shares at a substantial discount, specifically 81c per share, which was 31.87% below the volume-weighted average price as of mid-May 2023. Financial performance for the fiscal year ending 31st August 2023 showed a marginal revenue increase of 0.8%, though the company reported a headline loss of 2.05c per share, a downturn from the previous year's profit of 1.12c. Despite this loss, the net asset value (NAV) saw a growth of 6.3% to 40.8c per share. Notably, the client base expanded by 17.5%, with institutional client inflows up by an impressive 169.9%, pushing the assets managed across Purple Group’s platforms to R14.5 billion. For the six-month period ending on 29th February 2024, the company's trading statement projected an improvement in headline earnings per share (HEPS), estimating a range between 0.74c to 0.82c, which contrasts with a loss of 0.84c in the prior comparable period. This anticipated turnaround suggests a positive trajectory in operational performance. The shares of Purple Group are actively traded, with an average daily trading volume of around R400,000. The stock experienced a “double top” formation around 340c in early 2022, followed by a decline until early March 2024. Since then, the shares have been on an upward trend. Following our analysis, we recommended monitoring the 65-day exponentially smoothed moving average, which indicated a buying signal on 4th March 2024 at 66c. The share price has since increased to 70c, indicating a potential recovery and offering a possible entry point for investors considering the stock's recent performance and growth prospects.
JSE:PPE
by PDSnetSA
Our opinion on the current state of MC-GROUP(MCG)MultiChoice Group (MCG) is a major player in the African entertainment landscape and ranks among the world’s fastest-growing pay-TV providers, boasting 21.1 million subscribers across 50 countries. The subscriber demographics split with 42% (8.9 million) located in South Africa and the remaining 58% (12.2 million) spread across the rest of Africa. Since its spin-off from Naspers and subsequent listing on the Johannesburg Stock Exchange on 27th February 2019, MultiChoice has positioned itself as an attractive investment, particularly due to its reliable annuity income derived from debit orders across a diverse customer base. The company operates with minimal working capital, typical of service companies, which negates the need for large stock inventories. Despite its streamlined operations, MultiChoice has faced union challenges historically, although it does not employ a large unskilled or semi-skilled workforce. The potential for pay-TV growth in Africa is significant, though future challenges may arise from advancements in 5G internet technology and the availability of free online content, which could erode traditional pay-TV’s market share. Additionally, regulatory changes by the Independent Communications Authority of South Africa (Icasa) aimed at increasing competition could impact MultiChoice’s dominance, particularly in sports coverage, which is a major draw for the service. The COVID-19 pandemic initially boosted the home entertainment sector, aiding MultiChoice’s business. On 2nd March 2023, the company enhanced its competitive edge by partnering with Sky News and NBC Universal to bolster its Showmax service, aiming to dominate the African market. However, the first half of the financial year up to 30th September 2023 saw a slight decline in revenue by 1% and headline earnings per share (HEPS) by 5%. The overall 90-day active subscriber base saw a contraction of 2%, although the Rest of Africa base experienced a modest growth of 1%. The South African operations were notably affected by extensive power outages, impacting nearly half of the days in the reporting period. On the corporate front, significant developments include Canal+'s increased stake in MultiChoice, which as of early 2024 triggered a series of mandatory takeover bids, initially deemed too low by MultiChoice but subsequently raised to a more acceptable R125 per share. By April 2024, Canal+ had acquired a 40.01% share, leading to necessary regulatory filings with the Takeover Regulation Panel and the Companies and Intellectual Property Commission. From a technical standpoint, MultiChoice’s share price has been on a downward trend since March 2023 but experienced a rebound after breaking through the 65-day exponential moving average on 19th December 2023 at a price of 7440c. The share price has since climbed to 11750c, illustrating a significant recovery. MultiChoice remains a solid blue-chip stock, albeit with some exposure to the volatile dynamics of competitive products and regulatory changes. This investment scenario suggests that while risks exist, the company's strategic initiatives and market adaptations could continue to provide substantial value to investors.
JSE:MCG
by PDSnetSA
Our opinion on the current state of AH-VEST(AHL)AH Vest (AHL) produces a range of sauces under the All-Joy brand and seeks to diversify into ready meals, soups and canned vegetables. It is the second largest producer of tomato sauce in South Africa. In its financials for the year to 30th June 2023 the company reported revenue up 2,5% and headline earnings per share (HEPS) down 33,2%. The company said, "The gross profit margin decreased by 3.1% from 37.9% to 34.9% in the current year. This was mainly attributable to higher raw material input costs, higher production costs caused by load shedding and higher shipping costs." In a trading statement for the six months to 31st December 2023 the company estimated that HEPS would increase by 37%. The problem with this share is that it is virtually untraded on the JSE, making it impossible for private investors.
JSE:AHL
by PDSnetSA
$JSEBAW - Barloworld: Is The Bottom Finally In? 5883 Hold KeySee link below for previous analysis Barlo stock has caught a strong bid at 5883 and the rally looks strong. This give me confidence that wave C is probably complete at 5883. Not one to chase momentum, though the stock can continue higher with little pullbacks, i would like to see consolidation or a three wave pullback that holds above 5883 to join the bulls. The invalidation level of this bullish outlook is a break below 5883.
JSE:BAWLong
by Loyiso_BlaqueSoros_Mpeta
Our opinion on the current state of SIBANYE-S(SSW)Sibanye is a prominent mining house that has been aggressively expanding its portfolio, acquiring platinum and gold mines in South Africa and the United States, and is now diversifying into base metals and minerals, particularly those essential for green technologies. The company, under the leadership of Neal Froneman, known for his robust expertise and experience in the mining industry, is on a mission to double its size before his planned retirement around 2024/5. Sibanye has shown interest in crucial minerals for electric vehicle batteries, such as vanadium, copper, nickel, and lithium, aligning its operations with future market demands. Notably, on 1st June 2021, Sibanye announced a share buy-back program to repurchase up to 5% of its issued shares. Further solidifying its position in the lithium market, it increased its stake in Keliber, a Finnish lithium producer, to 80% on 30th June 2022, for about R7.7 billion. Additionally, the acquisition of Reldan, a US-based metals recycler, for $211.5 million on 9th November 2023, underscores its strategic expansion into recycling essential metals. Despite these strategic moves, Sibanye has faced challenges, including a significant share price drop, which has been viewed by the company’s leadership as a buying opportunity. Froneman has expressed that the shares are undervalued, a sentiment supported by their aggressive expansion and diversification strategy. However, the volatile prices of the metals they extract remain a pivotal factor in the company's financial health. In the latter part of 2023, Sibanye initiated Section 189 consultations to retrench 4095 employees, reflecting ongoing restructuring efforts within the company. Moreover, it secured a five-year deal with AMCU at its Kroondal PGM operation on 6th November 2023, ensuring a minimum 6% annual wage increase. In a move to bolster its finances, Sibanye announced on 21st November 2023 the issuance of a $500 million convertible bond, although this led to a 20% drop in the share price as some investors exited their positions. For the year ending 31st December 2023, Sibanye reported an 18% decrease in revenue and a significant loss of R37.4 billion. Despite these figures, Froneman remains optimistic about the non-structural nature of the PGM price weakness and anticipates a recovery based on favorable demand indicators. As of 11th April 2024, further restructuring was announced with Section 189 inquiries for the retrenchment of 3107 employees and around 900 contractors in its gold mines, indicating continued challenges in maintaining operational efficiency. Technically, Sibanye’s shares have been in a downward trend since March 2022, primarily due to falling commodity prices. However, an upward trend break on 2nd April 2024 at 2230c suggested a potential turnaround, with the share price subsequently rising to 2495c. Despite this recent uplift, the stock remains a volatile investment tied closely to the fluctuations of commodity markets.
JSE:SSW
by PDSnetSA
Our opinion on the current state of NUWORLD(NWL)NuWorld, a company established on the JSE since 1987, operates as an importer and exporter of consumer goods, focusing primarily on consumer electronics, appliances, and durables. The company's product lineup includes well-known brands like Telefunken and JVC, alongside a variety of items such as vacuum cleaners, fans, large and small appliances, cell phones, heaters, and liquor. Over the years, NuWorld has maintained a consistent track record of generating profits and distributing dividends, illustrating its stability in the industry. Despite its long-standing presence and profitability, the share is relatively thinly traded, with several days often passing without any trading activity. This characteristic renders the stock less suitable for private investors who might seek more liquidity. In the latest financial results for the six-month period ending on 29th February 2024, NuWorld reported a slight decline in revenue by 2.8% and a decrease in headline earnings per share (HEPS) by 5%. However, it's not all downward trends for the company; the net asset value (NAV) saw a positive increase of 4.8% to 7258.3c per share. The company highlighted several challenges affecting its local sales, including high interest rates, increased shipping costs, the devaluation of the South African Rand, load shedding, and rising fuel costs. However, it also noted a silver lining with its international sales, which demonstrated a 6.6% growth in turnover during the same period. This indicates that while NuWorld faces significant headwinds domestically, its international operations are contributing positively to the overall business. Technically, the trading pattern of NuWorld shares reflects the company's low liquidity, with the share price having declined since March 2022. Nonetheless, there are indications of a potential recovery, suggesting that despite the current challenges, there may be opportunities for the stock to regain some ground. Investors interested in NuWorld would need to consider the low trading volume and potential for sporadic price movements, balanced against the company's long-standing history of profitability and resilience in a fluctuating market.
JSE:NWL
by PDSnetSA
Our opinion on the current state of TRANSCAP(TCP)Transaction Capital (TCP) is a diversified company that operates three divisions: minibus taxis, risk services, and holds a 75% stake in WeBuyCars (WBC). Its subsidiary, SA Taxi, dominates the value chain of the minibus taxi industry in South Africa, handling financing, repairs, insurance, and sales. Since its listing in June 2012, TCP experienced a significant compound annual growth in earnings per share of 21% from 2014 until an abrupt halt in 2023 due to a R1.8 billion provision for bad debts in the minibus taxi division. The minibus taxi industry is crucial in South Africa, with 69% of households relying on taxis for more than 15 million trips daily. These trips are mostly non-discretionary, which typically shields the industry from economic downturns. However, recent challenges such as rising interest rates, increased fuel costs, and decreased consumer spending have led to a perfect storm, significantly impacting TCP’s finances. The average taxi owner struggled with repayments around R6000 per month amidst these rising costs, leading to SA Taxi reducing its new vehicle financing and focusing on selling refurbished taxis. In 2018, the South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1.7 billion, which has been mutually beneficial. Yet, the company’s broader financial health has been shaken, as evidenced by the considerable bad debt provisions and a reported headline loss of R3.7 billion for the year to 30th September 2023. This loss included a R1.1 billion write-down of repossessed taxis. The future of SA Taxi hinges on renegotiating terms with its debt funders, expected by March 2024. On the corporate front, significant shareholder changes occurred with Coronation increasing its stake to 16.57% in March 2023, and the Hurwitz family trust selling 1.6 million shares in December 2022, which preceded a sharp decline in share price. Additionally, CEO David Hurwitz announced his resignation effective 31st December 2023, further impacting the company's share price. In response to the ongoing challenges in the taxi division, TCP announced a strategic shift in January 2024 to unbundle and separately list WeBuyCars. This decision followed the poor performance in the taxi business throughout 2023. Following the unbundling, WeBuyCars demonstrated a positive trajectory with a 16% increase in revenue and a 20% rise in core earnings over four months, indicating potential as a solid standalone entity on the JSE. Further reshaping its portfolio, TCP sold its holding in Nutun Australia for A$58.3 million in March 2023. As of April 2024, following the separate listing of WeBuyCars, the TCP share price adjusted to 361c, reflecting the market’s reaction to the restructuring. This array of strategic moves and market challenges paints a complex picture for TCP. While the company faces significant hurdles, the strategic divestiture and focus on potentially more profitable segments like WeBuyCars could provide a foundation for recovery and future growth, presenting what could be an appealing investment opportunity at current valuations.
JSE:NTU
by PDSnetSA
Our opinion on the current state of WEBBUYCARS(WBC)WeBuyCars was separately listed on the JSE on 11th April 2024. It was unbundled from Transaction Capital (TCP) in order to raise capital and to protect it from that company's difficulties in its taxi division. The company has 417,2m shares in issue which began trading on the JSE at around R20 per share giving it a market capitalisation of just over R8,5bn. The company's free float is about 57,5% of its issued shares with significant institutional participation. Read this article for more information.
JSE:WBC
by PDSnetSA
SOL.JSE Sasol Trend Cloud & Fibonacci Study.Sasol has shown a decent recovery from the last selloff. Also winning the recent Emissions court case seems to have Boosted the Stock Price. The Chart is self Explanatory. 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. 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. Regards Graham. PV=FV/(1+r)^t Present Value = Future Value / (1 + R Rate of Return ) ^ Time.
JSE:SOLLong
by hitchcoxg
1