Get started
Our opinion on the current state of AFRIMAT(AFT)Afrimat, a prominent open-pit mining company in Southern Africa, provides a broad range of products including composites and construction materials. Until the end of 2015, it stood out as one of the JSE's top-performing shares, showcasing resilience and growth even through the COVID-19 pandemic. This growth trajectory saw the share price reach a peak of R76 on 6th April 2022. However, the end of the commodities cycle has since led to a decline in its share value. A significant factor in Afrimat's sustained performance has been its strategic acquisition of the Demaneng iron mine in the Northern Cape. This move has not only buffered the company against the construction industry's volatility but also marked a pivot towards diversification into other base minerals like manganese, chrome, and coal. CEO Andries van Heerden highlighted Afrimat's reputation for successful acquisitions and indicated ongoing evaluations for potential growth opportunities. In a strategic move to deepen its mining portfolio, on 26th May 2020, Afrimat proposed a non-binding expression of interest for Unicorn Capital Partners, targeting an anthracite mine and offering 1 Afrimat share for every 280 Unicorn shares. The company's timely acquisitions, bolstered by the surge in iron ore prices due to supply constraints and rising demand from China, underscore its strategic market positioning. Further expansions include the purchase of Coza Mining in August 2020 for R300m, the acquisition of the Gravenhage manganese mine in May 2021 for a combined total of $45m and R15m, and the acquisition of Glenover Phosphate for R550m in December 2021. Reflecting its transition towards more diversified mining activities, Afrimat's listing was shifted to the General Mining sector in March 2022. The acquisition spree continued with the purchase of Lafarge for $6m, as announced in June 2023, enhancing Afrimat's footprint in the construction materials sector. For the six months ending on 31st August 2023, the company reported a 9.6% increase in revenue and a 4.4% rise in headline earnings per share (HEPS). The net asset value (NAV) also saw a significant increase, with the company maintaining a strong balance sheet and a favorable debt-to-equity ratio. Despite the downturn in commodity prices affecting the industry at large, Afrimat's diversified portfolio and low debt levels stand out as key factors underpinning its value proposition. The recent approval from the Competition Commission for the acquisition of Lafarge, announced on 10th April 2024, marks another milestone in Afrimat's expansion journey. With a price-to-earnings (P:E) ratio of 12.8, Afrimat presents itself as a reasonably priced investment in the mining sector, promising continued growth and stability.
JSE:AFT
by PDSnetSA
Our opinion on the current state of ELLIES(ELI)Ellies, once a promising electronics company known for importing and distributing electrical products and providing solar power solutions, has experienced a significant decline from its peak in 2013, when shares were nearly R10 each, to a current value of just 2 cents. This drastic downturn is reflected in its designation as a penny stock, with approximately R100,000 worth of shares traded daily, indicating limited market activity. The company has faced numerous challenges, including initiating Section 189 proceedings under the Labour Relations Act on 2nd March 2020, which led to the retrenchment of 183 staff members. These actions highlight the company's efforts to adapt to an evolving market and economic landscape, with a strategic pivot towards solar energy solutions and away from its previous reliance on MultiChoice and the installation of DSTV dishes. However, the shift in strategy has yet to yield positive financial outcomes. On 26th September 2022, Ellies announced another Section 189 procedure, signaling further retrenchments and contributing to a nearly 20% drop in its share price. The financial results for the six months ending 31st October 2023 revealed a substantial 30.6% decrease in revenue and a significant widening of the headline loss per share from 4.58 cents to 13.2 cents, alongside negative equity of 7.3 cents per share. The culmination of these challenges led to the share price plummeting to 1 cent. In a critical move, Ellies announced on 31st January 2024 its entry into business rescue, followed by the resignation of four non-executive directors on 7th April 2024, indicating severe governance and operational crises. The most recent announcement on 10th April revealed the company's decision to proceed with liquidation, as determined by the business rescue practitioners who saw no viable path to recovery. This decision marks the end of Ellies' efforts to restructure and revive its business, underscoring the harsh realities faced by companies struggling to adapt to rapidly changing market demands and economic conditions.
JSE:ELI
by PDSnetSA
Our opinion on the current state of THARISA(THA)Tharisa (THA) stands out in the mining sector, focusing on the extraction and beneficiation of platinum group metals (PGMs) and chrome. The company's primary operations are anchored in the Tharisa mine, strategically located on the Bushveld Igneous Complex's south-west limb. This open pit mine boasts an impressive life expectancy of 17 years, highlighting the company's sustainable resource management. Tharisa's commitment to innovation and efficiency is further demonstrated through its subsidiary, Arxo Metals, which specializes in producing high-grade chrome concentrates. Looking beyond its established operations, Tharisa is eyeing expansion into Zimbabwe's Great Dyke area, presenting promising growth avenues. This ambition underscores the company's position as one of the JSE's premier mining investments, boasting production costs significantly lower than current metal prices, alongside notable expansion potential. The company's investment in the Vulcan Plant marks a pivotal development in enhancing chrome recovery rates from 65% to 82%, at a cost of $54.2 million. This initiative is aimed at boosting production to 200,000 ounces of PGMs and 2 million tons of chrome ore annually through proprietary technology. The operational efficiency of Tharisa's open pit mining operation, free from the challenges of underground mining, positions it advantageously in the industry. In a strategic move to add value to its product range, Tharisa plans to construct a 5MW furnace to produce platinum-rich iron alloys, targeting higher market prices. Recent milestones include the cold commissioning of the Vulcan chrome beneficiation plant on 5th October 2021, expected to enhance chrome recovery by 20%, and the signing of an agreement on 4th February 2022 for the implementation of a solar farm exceeding 40 megawatts. Furthermore, on 27th March 2023, Tharisa secured $130 million in financing, bolstering its financial position and project implementation capabilities. However, the year to 30th September 2023 presented challenges, with a decrease in PGM production by 19.3% and a 5.3% dip in revenue. Factors such as mining restrictions near community areas, adverse weather conditions, and the processing of lower-grade ore adversely affected performance. Despite these hurdles, operational improvements in the following quarters led to record chrome production, demonstrating the company's resilience and adaptive strategies. As of the second quarter ending 31st March 2024, PGM output remained stable, with a slight dip in the basket price received. The company's robust cash position and manageable debt level reflect its solid financial health and operational efficiency. From a trading perspective, Tharisa is highly active, with daily share transactions exceeding R1.1 million, making it accessible to private investors. Although the share experienced a downward trend in line with commodity prices until April 2022, recent improvements in PGM prospects have led to a price recovery. The share price broke through the downward trendline on 26th March 2024 at 1405c, climbing to 1575c, indicating positive momentum. Despite its potential, Tharisa's performance remains closely tied to international commodity prices, presenting inherent risks associated with the volatile nature of commodity markets.
JSE:THA
by PDSnetSA
Our opinion on the current state of BELL(BEL)Bell, a key player in the manufacture and distribution of heavy equipment for industries like mining, construction, agriculture, and waste management, has faced challenges stemming from the construction slowdown since 2008 and the collapse of the mining industry. Despite these setbacks, Bell's articulated dump trucks enjoy a global export market from its production bases in South Africa and Germany. The company’s extensive dealership network for various global manufacturers expands its product range to over 120 items. Notably, a significant portion of its business, approximately 60%, is derived from international markets. Bell employs around 3,200 individuals, with a substantial 88.6% based in South Africa. In a strategic move, Gary Bell, the CEO of Bell, expressed to Business Day the company's openness to delisting, with 1A Bell proposing to make an offer to minority shareholders, though the potential offer price was not disclosed. This suggestion has sparked discussions among minority shareholders about the board’s fiduciary responsibilities, especially concerning the possibility of selling the company to the highest bidder. On 18th February 2021, Bell announced a significant transaction where 1A Bell agreed to acquire an additional 31.4% stake in the company, resulting in a 70% ownership at R10 per share. This acquisition price represented a 13% discount to the share price at the time. For the fiscal year ending 31st December 2023, Bell reported a robust financial performance with a 32% increase in revenue and a 69% rise in headline earnings per share (HEPS). Additionally, the company’s net asset value (NAV) saw a 21% increase to 5527c per share. Bell's shares are actively traded, with over R1 million worth of shares changing hands daily, positioning it as a viable option for private investors. A notable on-balance-volume (OBV) buy signal was recorded on 7th September 2023 when the share price was at 1752c. Following this signal, the share price experienced a significant increase, climbing to 2480c.
JSE:BEL
by PDSnetSA
Our opinion on the current state of GRINDROD(GND)Grindrod (GND) is an international freight and financial services company operating in twenty-eight countries. The significant change in the company's structure came in mid-June 2018, when it unbundled and separately listed its shipping division, Grinship (GSH), leading to a notable drop in its share price. Post-divestiture, Grindrod's focus sharpened on its freight and financial services divisions. Among its key assets are the North-South railway line stretching from Beitbridge to Victoria Falls and port terminals located in Richards Bay, Natal, Walvis Bay in Namibia, and Maputo. The financial services division, which constitutes about 30% of the business, is seen as a growth area. Grindrod is particularly keen on integrating its retail banking division with small and medium-sized enterprises. However, challenges persist, notably the conflict in northern Mozambique and flooding in Natal, which temporarily halted operations at five sites. For the fiscal year ending 31st December 2023, Grindrod reported an 18% increase in headline earnings per share (HEPS), a 13% rise in net asset value (NAV) to 1368c per share, despite a 23% drop in revenue. This financial performance was bolstered by interest earned on the proceeds from the sale of Grindrod Bank in 2022, alongside earnings from various initiatives totaling R45.3 million in the current year, compared to R167.1 million in 2022. Technically, Grindrod's share price has shown signs of recovery, forming a rising triple-bottom pattern and entering a new upward trend. The recommendation was to wait for a break through the long-term downward trendline before purchasing shares. This break occurred on 15th July 2020 at a price of 340c, and the shares have since appreciated significantly to 1275c, marking a 275% gain in over three years. The global economic recovery and a steady increase in international trade are expected to benefit the company. Given these factors, Grindrod's shares are still considered to offer value to investors.
JSE:GND
by PDSnetSA
Our opinion on the current state of ELLIES(ELI)Ellies, an emerging electronics firm known for importing and distributing electrical products and offering solar power solutions, has experienced significant shifts in its market standing since its peak in 2013. At that time, shares traded close to R10 each, but have since plummeted to a mere 2 cents, reflecting a stark downturn. The company, now a penny stock, sees roughly R100,000 in shares traded daily, indicating a relatively low level of liquidity. The company's trajectory took a notable turn on 2nd March 2020 with the announcement of Section 189 proceedings under the Labour Relations Act, leading to the retrenchment of 183 staff members. Such moves hint at Ellies' strategic adjustments to align with broader economic shifts and potentially position itself to benefit from any future uplift in South Africa's economic landscape. The current share price suggests a low valuation that might appeal to some investors looking for speculative opportunities. Ellies has been actively working to diversify its business model, particularly by reducing its dependence on MultiChoice and the installation of DSTV dishes, pivoting towards the burgeoning solar energy sector. However, the initiation of a Section 189 procedure on 26th September 2022, signaling impending retrenchments, had a detrimental impact on the share price, leading to a nearly 20% drop. The half-year results up to 31st October 2023 further highlighted the challenges faced by Ellies, reporting a 30.6% decrease in revenue and a headline loss per share of 13.2 cents, a significant deterioration from a loss of 4.58 cents in the previous period. The company's negative equity position of 7.3 cents per share underscores the severe financial distress it is undergoing. The share price was further battered by the latest financial results and news, driving it down to just 1 cent. In a move reflecting the company's dire straits, Ellies announced on 31st January 2024 that it had entered into business rescue, a last-ditch effort to salvage the business. The situation seemed to exacerbate when, on 7th April 2024, four of its non-executive directors resigned, perhaps signaling a lack of confidence in the company's ability to navigate its way back to profitability. Ellies' journey from a once thriving electronics company to its current precarious position illustrates the volatile nature of the tech and electronics market, especially within the challenging economic context of South Africa. The company's shift towards solar energy reflects a strategic pivot aimed at capturing new growth areas, yet its immediate future remains highly uncertain, evidenced by its recent entry into business rescue and the resignation of key board members. Investors and stakeholders will be keenly watching for any signs of recovery or further decline in the coming months.
JSE:ELI
by PDSnetSA
Our opinion on the current state of MCGMultiChoice Group (MCG) is a premier entertainment enterprise in Africa, standing out as one of the world's most rapidly expanding pay-TV broadcast providers. With a subscriber base reaching 21.1 million across 50 countries, MultiChoice boasts a significant footprint. The distribution of its 90-day subscriber base is notably divided, with 42% (8.9 million) in South Africa and the remaining 58% (12.2 million) across the rest of Africa. The company's journey to becoming an independent entity, following its spin-off from Naspers, was marked by its listing on the Johannesburg Stock Exchange (JSE) on 27th February 2019. MultiChoice represents an almost ideal investment for private investors, primarily due to its annuity-based income model, facilitated through debit orders among a highly diversified client base. As a service-centric company, it operates with minimal working capital requirements, negating the need for substantial inventory holdings. Additionally, the company's workforce is largely skilled, mitigating some of the labor-related challenges, despite previous union issues. The pay-TV market in Africa, where MultiChoice is a dominant player, shows significant potential. However, future growth may face headwinds from advancements in 5G internet technology and the availability of free online content platforms. Regulatory changes are also on the horizon, with the Independent Communications Authority of South Africa (Icasa) considering revisions to pay-TV market dominance rules. Such changes could particularly affect MultiChoice's stronghold on exclusive sports broadcasting rights, which has been a major draw for its service. The COVID-19 pandemic had a temporary positive impact on the home entertainment sector, benefiting companies like MultiChoice. In an effort to enhance its offerings, MultiChoice entered into agreements with Sky News and NBC Universal on 2nd March 2023 to bolster its Showmax service, aiming to cement its leadership in Africa's entertainment space. Despite these strategic moves, the company reported a slight dip in revenue by 1% and a 5% decrease in headline earnings per share (HEPS) for the six months ending 30th September 2023. The decline in the overall 90-day active subscriber base by 2% to 21.7 million was reported, alongside a growth in the Rest of Africa subscriber base. The South African segment of the business was particularly challenged by extensive power outages during the reporting period. Recently, the French media conglomerate Canal+ increased its stake in MultiChoice to 35.01%, triggering a mandatory takeover offer at R105 per share, which was deemed insufficient by MultiChoice. Following a ruling by the Takeover Regulation Panel (TRP) on 28th February 2024, Canal+ revised its offer to R125 per share on 6th March 2024. Subsequently, on 7th April 2024, a cooperation agreement was announced between MultiChoice and Canal+, outlining a collaborative approach to the takeover process. From a technical analysis perspective, MultiChoice's shares experienced a decline leading up to 6th March 2023. However, a notable turnaround occurred on 19th December 2023 when the share price crossed the 65-day exponential moving average at 7440c, leading to a significant increase to 11793c. This suggests a potential bullish outlook for investors, considering the recent developments and strategic partnerships, although the company continues to navigate challenges within the highly competitive and rapidly evolving pay-TV market.
JSE:MCG
by PDSnetSA
Our opinion on the current state of SOLSasol, a behemoth in the international chemicals and energy sector, traces its origins to the oil-from-coal technology developed during South Africa's apartheid era. With approximately 50% of its profits tied directly to oil prices, Sasol's performance is closely linked to the volatile energy market. The company has strategically positioned itself for growth through two primary initiatives: its 50% investment in the ethane cracker plant in Louisiana, known as the "Lake Charles Chemical Project" (LCCP), and the expansion of its gas projects in Mozambique. The awarding of two new licenses for gas exploration in an onshore area of about three thousand square kilometers in Mozambique highlights its potential to significantly boost its existing operations in the Rovuma province. However, Sasol faces significant environmental scrutiny. It is the largest producer of greenhouse gases in South Africa and is listed among the top 100 fossil-fuel companies globally contributing to over 70% of greenhouse gas emissions. This has placed Sasol under considerable international pressure to effectively manage its carbon footprint. The COVID-19 pandemic initially led to a dramatic recovery in Sasol's share price, but the resurgence was short-lived due to declining commodity prices, particularly oil. For the six months ending on 31st December 2023, Sasol reported a decrease in revenue to R136.3bn from R149.8bn in the previous period, attributing the downturn to lower chemical prices and weak oil prices. The company's headline earnings per share (HEPS) and net asset value (NAV) also saw declines of 34% and 2%, respectively. Sasol's first half of 2024 continued to be marred by a challenging macroeconomic environment, characterized by weaker oil and petrochemical prices, fluctuating product demand, and rising inflation. Operational improvements in South Africa were overshadowed by the persistent underperformance of state-owned enterprises involved in Sasol's value chain, compounded by a weaker global growth outlook, adversely affecting business performance. On a positive note, on 7th April 2024, Sasol announced that the Minister of the Environment, Barbara Creecy, had upheld its appeal against a decision by the national air quality officer, a ruling that could have jeopardized the operation of its Secunda oil-from-coal plant. This decision comes as a relief for Sasol's operations, albeit temporarily alleviating some regulatory pressures. Sasol's stock initially benefited from a spike in Brent oil prices to around $127 per barrel, although prices have since receded to about $90, reflecting the inherent volatility and risk associated with commodity shares. In its pursuit of environmental stewardship, Sasol has made a notable stride by securing 550mw of renewable energy, marking progress toward achieving its carbon emission reduction goals. This move signifies Sasol's commitment to transitioning towards more sustainable energy sources amidst the evolving energy landscape and regulatory pressures.
JSE:SOL
by PDSnetSA
Our opinion on the current state of MCZMC Mining, formerly known as "Coal of Africa," is a modestly sized company focused on metallurgical coal mining, with Uitkomst as its only producing mine. Besides Uitkomst, the company is actively developing several projects, including the Makhado project, the Vele colliery, and MbeuYashu, showcasing its commitment to growth within the sector. The Makhado project, located in the Limpopo province, stands out as the company's flagship operation. It is an open-cast mine with a significant lifespan of 16 years, which may be extended further, emphasizing the project's long-term potential. In January 2019, a pivotal moment for MC Mining occurred with the acquisition of surface rights, making the Makhado project feasible. With production anticipated to start by the end of 2020, the mine is expected to yield 800,000 tons of hard coking coal and 1 million tons of export thermal coal annually, marking a significant milestone for the company. The viability and reduced risks associated with the Makhado project have significantly enhanced its investment appeal. Financial backing for the Makhado project is partly secured, with the Industrial Development Corporation (IDC) contributing R245m, although an additional R530m is still required. Ownership stakes are strategically structured, with MC Mining holding a 69% interest in Baobab Mining and Exploration, the entity that owns the Makhado project. For the six-month period ending on 31st December 2023, MC Mining reported an 80% increase in revenue alongside a headline loss of 145c (US) per share, an escalation from a 50c loss in the prior period. This financial performance reflects the volatility and challenges in the coal market, with international thermal coal prices experiencing significant pressure. Despite these challenges, the Uitkomst Colliery managed to generate satisfactory results, with revenue of $16.3 million and a gross profit of $1.5 million, alongside operating cash flows of $5.1 million. These figures demonstrate the colliery's resilience amid fluctuating coal prices. A significant development for MC Mining was reported on 8th April 2024 by Business Day, revealing that Goldway Capital had received acceptances from shareholders for 83.67% of the issued shares, surpassing the 82.15% threshold needed for the takeover to proceed. This move marks a crucial phase in MC Mining's corporate journey. From a technical perspective, the company's shares have exhibited volatility, with notable spikes between July and September 2022 before retracting to lower levels. This volatility underscores the inherent risks associated with commodity shares, coupled with MC Mining's high debt levels and the challenges of mining exploration and development. With approximately R280,000 worth of shares traded daily, the company's stock remains a high-risk but potentially high-reward investment option in the mining sector.
JSE:MCZ
by PDSnetSA
Real yield in uptrendThe weekly real yield is in uptrend, which should act as support for the USDOLLAR and as a headwind for the risk markets. This video is intended for the users of Stratos Markets Limited, Stratos Trading Pty. Limited and Stratos Global LLC, (collectively “FXCM Group”). Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
JSE:GFI
by FXCM