It’s been a tough old week on the JSE with a number of shares being knocked around.
As we skid into this Friday a little battered and a little bruised, here are some of the small and mid-cap sector stories we saw yesterday:
A thought to ponder this Friday
Sometimes the best returns are made when there is “blood on the floor”. Piet Viljoen from RE:CM asked an interesting question following the bloodbath at Taste Holdings when he drew a parallel between Taste Holdings and Nandos. When Nandos was de-listed and going through an expansion phase, the market had no love for them. They’ve now expanded into a globally recognized brand. While the 2 are probably not directly comparable, it’s worth a ponder this Friday.
CAFCA – illiquid, unloved and potentially cheap
CAFCA Limited, the manufacturer and supplier of cable and allied products for power distribution and generation is not a stock which appears on any radars but interim results for the company suggest investors are possibly missing a trick here. The company delivered 69c of earnings for the first 6 months of the trading year and is expected to repeat this in the second half of the year. The share last traded at R1/share and has a net asset value north of R6.
While probably not a classic “mid-cap”, Massmart is fast on the way there. Shares in the retail group slumped 18% on Friday as the company warned that earnings per share were likely to be down by between 25% and 35% for the comparative period.
… And so was Mediclinic
The hospital group was down 9% (Down 22% year-to-date) following the release of full-year results. Nic Norman-Smith from Lentus made the comment on Twitter: “Medi-Clinic CEO was ‘pleased with our performance this year…’ Is he reading the same Financials that I am? An R11bn write-off in Switzerland alone. Oh but it’s not management’s fault, it’s ‘the regulatory and market trends’ and it’s ‘non-cash’”
And TFG wasn’t spared either!
The Foschini Group was down 7% following the release of results for the 12 months ended March 2018. The company is betting big on a growth strategy with 281 outlets opened in the last year (146 in Africa, 91 in London and 44 in Australia).
More lows than highs
A number of small and mid-cap stocks hit new 52-week lows. Some of the notable players include EOH, Rebosis, Consolidated Infrastructure and recent technology listing 4Sight which dropped 13% on Thursday. 4Sight is off 56% in the year-to-date.
Famous Brands releases full-year results
The company released results for the 12 months ended 28 February headline earnings per share down 8% but revenue up 23%. The restaurant and fast-food group pointed to tough consumer conditions in all its key markets including South Africa, the UK and the Middle-East.
Capital & Counties considers a split
Shares in the UK property group were up 4% as the company announced that it was considering splitting its listings into 2 separate assets. The one asset will run the Covent Garden shopping centre while the other will pursue development opportunities in the London market.
Not all the construction sector is getting wiped out
Bad news has engulfed the broader construction sector but Afrimat has bucked the trend with a solid set of full-year results. While not a traditional “builder”, Afrimat supplies into the sector but has diversified into a more of a resources play. The company trades on a PE multiple of 11 and offers a 2.4% dividend yield.
Afrocentric associates top up on shares
It was announced that insiders at the investment holdings group purchased over R5.3m worth of shares at prices of between R5.50 and R5.70/share.