As a data-driven platform, we spend a lot of time analysing Google search terms and search trends. This allows us to identify where investors are seeking information related to specific company share prices.
This list may provide insights into interesting investment opportunities, particularly in the small and mid-cap space.
The technology group is down 51% since the start of the year and currently trades on a price to earnings ratio of 1.2 times earnings and trades at a steep discount to its Net Asset Value (NAV) – 18c vs R1.39 reported NAV.
African Media Entertainment (AME)
One of the smaller JSE-listed media groups with attractive assets including ClassicFM, AlgoaFM and OFM 2019 has been a tough year for AME. The share has lost 39% over the past 12 months, trades on a forward price to earnings multiple of 4.5 and offers a 7.5% dividend yield.
The company has approved the repurchase of 89275 shares at R34.90/share with these Treasury shares to be cancelled.
African Rainbow Capital Investments Limited
Currently trading at R4.10/share vs. a reported NAV of R9.28, there has been a significant amount of search traffic around the ARCInvest share price.
The most significant corporate action in August was the announcement of Tauriq Keraan as CEO of Tymebank.
One of our most popular posts has been our question around the cash-flow position at Balwin – “Balwin Facing a Cash Crunch”.
Balwin finished August strongly rising 16% over the last 7 trading days.
The company released a trading update at the end of August saying it expects the Earnings Per Share (EPS) and Headline Earnings Per Share (HEPS) to rise by between 1% and 6% or 38 – 40c/share for the 6 months ending 31 August 2019.
If Balwin is able to replicate this performance in the second half of the financial year, this puts it on a PE multiple of 3.5 times earnings.
Blue Label Telecoms
2019 has been a year to forget for shareholders in Blue Label Telecoms with the counter down 61% in the last 12 months.
The main development in August 2019 was the Cell C debt being downgraded to “Default” with Cell C failing to make interest payments. Shareholders in Blue Label have been alerted that earnings per share will be down by more than 20%.
The share price is R2.78 vs. an NAV of R9.77. If the Cell C debt can be managed and the losses stemmed, this will place Blue Label on an attractive single digit PE.
Since listing in October 2015 as a SPAC, Capital Appreciation has long been identified as one of the more attractive technology stocks. The company includes African Rainbow Capital Investments as a key shareholder.
ARCInvest holds 50 million shares which were purchased at R1.30/share (currently trading at 76c/share.
The share is down 25% over the past 12 months.
Down 23% year to date, Chrometco is involved in the acquisition and exploration of mineral resources in the chrome sector.
With the market currently in an over-supply situation and price outlook continues to be muted.
Another counter which has African Rainbow Capital Investments as a shareholder (8.2% effective interest purchased at R1.20) the company has had a torrid year as small and mid-cap shares have been sold off. Down 60% (currently 44c/share), CSG still offers an historic dividend yield of 11%.
Since touching a 52-week low of R16.50/share, the Curro share price has recovered slightly but is still down 40% in the last 12 months. The company restated earnings for the 6 months ended 30 June 2019, saying that headline earnings per share for the period would be 37.1c/share.
The company trades on a forward PE of between 22 and 25 times earnings based on the current earnings trajectory.
In contrast, investors could look at competitor AdvTech which trades around 11 times future earnings.
Chairperson Laurence Nestadt kicked off August by offloading 1 million Dis-Chem shares at R22.46/shares. The month ended with the company releasing a positive trading update for the five-month period from 1 March 2019 to 31 July 2019, the Group recorded revenue growth of 13.5% to R9.9bn over the corresponding period in the prior year.
To date, the group has added nine new stores and is on track to add another 13 stores before year-end.
Dis-Chem presently trades on a forward PE of 21 times earnings and 1.54%.
We also track the interest in the Getbucks / MyBucks keywords related to Ecsponent.
Investors are divided on the outlook for this JSE-listed financial services play which has an unusual preference share structure.
On one hand, the company has an interesting asset in the form of MyBucks, the Frankfurt listed Fintech company. On the other, it has a 68.2m share holding in Mauritius based (and JSE-listed) Go Life International Holdings, a healthcare group which is currently facing a petition for the winding up of its business by one of its major creditors.
Previously listed as Sacoil, Efora had a positive August rising 40% – however much of this was a 30% increase on the last trading day where 1.1m shares changed hands.
The company hosted an uneventful AGM in August with the only really interesting voting items being the 99% votes against issuing of shares for cash and the general authority to issue authorised but unissued shares.
One of the few JSE-listed shares trading at or near 52-week highs (excluding gold shares), Emedia was up 17% in the month of August on no apparent news-flow.
With a market capitalisation of R220m, Emedia remains one of the smaller listed media assets on the JSE and at price to earnings multiple of 21 times earnings and a 2% dividend yield, this appears to be a relatively rich valuation.
It should however be noted that 21% of the share price gain was recorded on the last trading day of August on 7560 shares at R3.45.
The developer of shopping centres in emerging parts of the South African economy, Exemplar offers investors a chance to access development assets.
The counter is fairly illiquid and trades on a PE of 8 times earnings with a 6.5% dividend yield.
We have regularly tracked the Gemfields share price and believe it to be one of the more interesting small caps on the JSE. A deep discount to its NAV has been a long-standing issue and investors will be aware of an extended track record of under-peformance.
Analyst consensus forecast on this industrial counter is a “Buy”, the share trades on a forward PE of 7 and offers a dividend yield around 5 times earnings.
The company has delivered a Return on Equity of 13.4% and Return on Assets of around 14.5%.
One of the ways for investors to access alternative energy options on the JSE, Hulisani is a relatively young counter, having initially been listed as a SPAC.
Down 31% over the past 12 months (but up 8% year to date), investors will be waiting for October to see how Hulisani is delivering on execution of its strategy.
The UK listed property group has tumbled 75% in the past 12 months as debt ways on the share. The company added 24% in the last 7 trading days of August 2019 and currently trades on a forward PE of 3 and offers an historical dividend yield of 12% (likely to be cut as the company tries to settle debt).
Directors have tried to send a sign to the market that they are buyers but the debt burden continues to worry investors.
Down 20% year to date, Insimbi offers investors a 4.4% dividend yield and a 6 times price to earnings multiple.
The company has entered into a share re-purchase process for 3 million shares at a price not exceeding R3.15m.
The bourse operator is rated as a “Hold” according to analyst consensus forecast data and trades on a forward PE multiple of 10.8 times earnings with a 5% dividend yield.
The JSE announced in August that it had agreed to acquire a 74.85% stake in Link Market Services SA for R224m which should add around 6% of revenue to the JSE financials.
KAP Industrial Holdings
KAP is a diversified industrial group, operating in southern Africa, with leading industry positions in the wood-based panel, automotive components, bedding, polymers, logistics and passenger transport sectors.
The counter was one of the few shares which delivered a positive investment return in August with the share price rising 4.38%.
Trading on a forward PE of 7 times earnings and offering a 4.39% dividend yield, the company released full year results in August.
KAP is highly cash generative with cash from operations up 22% to R4bn and management have indicated: “Acquisition opportunities that meet the group’s strategic requirements and create shareholder value remain a key element of the growth objectives of management. It is anticipated that the current distressed economic environment will yield increased opportunities in this regard.”
Trading on a PE of 5.9 times earnings and offering a juicy 9.2% historical dividend yield, Metrofile has been dragged down by the general malaise in small and mid-cap shares on the JSE.
Metrofile did however release a trading update at the end of August (for the 12 months ended June 2019) and have indicated that Headline Earnings Per Share will drop by between 22% and 34%.
In a previous post, we did touch on the logistics and transport providers appearing to offer attractive investment opportunities. Onelogix presently trades on a forward price to earnings multiple of 5 times earnings and offers a dividend yield of 3.6%.
The company released full year results for the year ended May 2019 saying: “The stronger first half of the year was followed by a much tougher second half. The majority of the group’s businesses delivered bottom line growth, almost exclusively organic in nature. This once again affirms the strength of the group’s business strategy and the resilient business models of the underlying businesses, guided by skilled management teams.”
Pan African Resources
Boosted by the rising gold price and weaker Rand, Pan African resources is up 67% this year.
Much of the focus will be where the Rand Gold price goes in the next few months and whether Pan African can capitalise on these gains.
This alternative energy player rose 6.25% on the last trading day of August on the back of 1300 shares changing hands at R8.50, bringing it’s six month gains to… 6.25%.
The company announced a new funding source in mid-August saying it had secured $40m from the US: “Emerging Liquefied Natural Gas (‘LNG’) and helium producer, Renergen, is pleased to announce a loan agreement with the Overseas Private Investment Corporation (‘OPIC’) was signed on Wednesday, the 21st of August 2019. The agreement with OPIC marks a significant milestone for Renergen as it provides access to the capital required to construct the first phase of the Virginia Gas Project (‘The Project’) in South Africa. Importantly, the loan is also a major endorsement of the Virginia Gas Project by the US Government, and the increasing importance of securing helium, with significant supply shortages forecasted.”
Up 22% and trading near a 52-week high, RH Bophelo offers investors an alternative entry point into the hospital operator market in South Africa.
Lack of liquidity remains a major challenge for this counter.
A forward PE multiple of 3.15 and a dividend yield of 3.8%.
Non-executive director Tony Dixon purchased 100 000 shares at R2.15/share in early August. The company also announced that all of the condition’s precedent have been satisfied and that the acquisition of MLG Maritime Cargo Logistics GmbH which is expected to contribute EUR350 000 to the bottom line.
Another education player which has failed to sparkle in 2019, Stadio gave up 15% over August.
In commentary accompanying the financial results for the 6 months ended 30 June 2019, the company said: “The Group continues on its journey to establish and migrate all brands to one STADIO Multiversity, which will reap efficiencies in the long-term, but could result in additional costs in the short-to-medium term. Notwithstanding the challenging South African environment, the Board has considered the prospects of the Group and believes that the Group is well positioned to deliver on its organic and acquisitive growth objectives for the 2019 financial year.”
Stellar Capital Partners
A bit of a surprise package with the share up 16% over the past 12 months, the company trades on an historical PE of 4.6 times earnings but no dividend is offered. In commentary accompanying results for the year ended 30 June 2019, the company advised: “Stellar is nearing the end of its period of restructure and has concluded the disposals of its 2 material industrial assets and is progressing with the disposal process of the remaining industrial asset. This has resulted in the redemption of all its preference shares and a strong cash position which provides much needed flexibility in the current uncertain business environment. Stellar has retained and expanded its exposure to the traditional financial services sector through Prescient and now Sithega, and in working closely with its partners in both these businesses, is optimistic about the growth strategies currently underway.”
Another transport / logistics group which has spent much of 2019 treading water, the company currently trades on a PE multiple of 7.
During August, the business released full year results for the 12 months ended 30 June 2019, reporting a 7% increase in profits. CEO Peter Mountford indicated to the mediathat they had spent R2.1bn on foreign investments and would be comfortable with a split of 70/30 (Offshore vs. local) earnings mix to de-risk the business.
After the release of the results, Mountford purchased R500 000 worth of shares at between R27.74 and R28/share.
2019 has been a solid one for this diversified financial services group with its share price up 32% year to date and trading near a 52-week high. A PE multiple of 16 suggests investors are attaching a premium to Transaction Capital (relative to other financial services sector peers).
The main corporate announcement out of the group in August was that the company would be expanding its Joint Venture with Genki Group Limited – a fund focused on investment in credit markets in Western Europe.