Simon Brown
* Simon holds ungeared positions.
Remgro has grown its NAV per share by 5% p.a. since 2010.
Over the same period, the ALSI TR index has done 12% p.a.
If you expect this underperformance to continue (and nothing in their recent capital allocation decisions indicates otherwise), then a fair discount to NAV is…— Piet Viljoen (@pietviljoen) March 19, 2024
Retire well, we're chatting with retirees about what they've learnt and any tricks they can pass on.
Get 10% off your first KoyFin order
* Simon holds ungeared positions.
Budget 2024 panel.
For the last many years AJM Tax has done a post budget panel which includes Simon Brown and this year was no different. Hosted in Cape Town the panel was;
Pick n Pay close 13Feb24 (daily)
Global Market Trends and Dollar Strength
DXY (US$ index) 14Feb24 (daily chart)
Last week's big story was about tech, starting with Disney, a stock recommended here back in September at ±$80.
Big move in streaming sports! ⚾️🏀🏈
Disney, Warner Bros., and Fox are joining forces to create the ultimate sports streaming app, merging ESPN, TNT, and Fox Sports (WSJ).
ESPN alone was 18% of Disney's latest quarter revenue.$DIS $FOX $WBD pic.twitter.com/xSPBko0cMO— App Economy Insights (@EconomyApp) February 6, 2024
Richemont*: Luxury brand with potential in a recovering economy.
[caption id="attachment_41062" align="aligncenter" width="849"] Richemont weekly chart close 31Jan24[/caption]
Calgro M3*: Debt under control, potential dividend, well-managed company.
[caption id="attachment_41063" align="aligncenter" width="849"] Calgro M3 weekly chart close 31Jan24[/caption]
AngloGold Ashanti*: Gold as insurance; geopolitical concerns.
[caption id="attachment_41061" align="aligncenter" width="849"] Anglogold Ashanti weekly chart close 31Jan24[/caption]
Zeda: New listing, unbundling, potential growth.
[caption id="attachment_41065" align="aligncenter" width="849"] Zeda weekly chart close 31Jan24[/caption]
Mr. Price*: Positioned well in the retail sector, positive trading update.
[caption id="attachment_41064" align="aligncenter" width="849"] Mr Price weekly chart close 31Jan24[/caption]
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Host: Simon Brown
* Simon holds ungeared positions.
Host: Simon Brown
Date: 1 February 2024
JSE Direct Episode 571 for January 25, hosted by Simon Brown.
Simon introduces the idea of transitioning the podcast to a live format using Riverside, allowing viewers to see charts and interact during recordings.
Richemont*:
AVI:
Woolies*:
Clicks:
Economic Updates:
All-Time Highs:
Simon Brown signs off, encourages reviews, and mentions future live recordings.
Reminds listeners to take care of themselves and others.
* Simon holds ungeared positions.
In this episode of JSE Direct, Simon Brown discusses various market topics, including the bleak outlook of the Hang Seng Index due to Chinese GDP results.
Positive news for Grindrod with the Maputo Port Development Company's impressive performance.
[caption id="attachment_40966" align="aligncenter" width="849"] Spot uranium price[/caption]
The approval of 11 Bitcoin ETFs by the SEC. When does the JSE get a crypto ETF?
Upcoming elections in 2024 across 70 countries. Simon explores the question of whether elections truly matter for investors, emphasising historical examples where market reactions were short-term and highlighting the importance of focusing on long-term investment strategies amid political volatility.
Now for the eleventh year in a row, we kick off the new year with a prediction show.
Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2024 followed by a call on the Top40 and ZAR for the year ahead.
Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2023 predictions show here.
Simon Brown
Share buybacks are good right? The company uses their free cash to buyback shares which reduces the number of remaining shares such that each share has a higher claim over future profits which adds to their value.
Further they're tax efficient in that paying dividends results in dividend tax.
BUT;
Locally we do see buybacks, but share issues are relatively small so the impact is less shares and more value per share.
Using IFRS accounting diluted HEPS uses the share count of all outstanding shares PLUS all promised shares not yet delivered. These are basically options that could become shares and gives a way better reflection of the profit, even thugh not yet issued they will potentially come to makret and be issued.
Apple (Nasdaq code: AAPL) has been buying back shares and as such over the last decade it's outstanding shares is down about 38%.
Meta (Nasdaq code: META) has also been buying back, but they also issue shares at such a pace that over the last decade shares outstanding is basically flat.
Charts from Koyfin 15% discount for first 2 years
Simon Brown
The problem with telcos
I have long said that telcos such as MTN (JSE code: MTN) and Vodacom (JSE code: VOD) is that they are essentially utilities and should be priced as such.
But actually that statement is wrong.
Sure voice (who still calls using voice?) and data are utilities like water and electricity.
BUT the telcos have a problem, capex.
Yes we're using more and more data but prices keep coming down, I recently bought an effective 80 GB for little over R400. And all that while capex is increasing. They're busy rolling out 5G but as soon as that's done it'll be tine for 6G. It's a never ending tread mill.
Updating minister Gordhan's portfolio
Public Enterprises Minister Pravin Gordhan has declared his holdings, we reviewed his portfolio last time in April and there are some interesting changes, he is fairly active in buying and selling. Most notable is the total value is up almost R2million?
Living small, an update
Back in 2017 Simon and his wife down scaled into a small (relative) apartment and also got rid of one of their cars again. As they now move again Simon updates in their experience of living small.
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Renergen* (JSE code: REN), now what?
Late September the price started breaking down and end September a Tweeter started posting about them.
I'm not going to defend every point raised, that's the job of the company and after an initial poor response, Monday saw a more detailed SENS.
Ultimately all research is paid for. Sometimes it is paid for by the company and here the issue is disclosure.
I think the bigger issue is a complete lack of disclosure in our industry. By FinTwit or the fancy analysts, albeit assume the latter is always talking their book, which is fair.
I hold and continue to hold Renergen*. It was never going to be smooth sailing and the risks are real. Yes they have the gas and helium in the ground, phase one is half working but phase two is large, complex and expensive with real risks.
There are bold traders. here are old traders. There are no bold and old traders.Bold traders
What is a bold trader and why do they die out?
Famous Brands (JSE code: FBR) trading update, Spur (JSE code: SUR) really has taken the mantel of best QSR/restaurant business on the JSE.
Very strong US jobs and upward revisions from previous month. But wage inflation only 0.2%. So market was confused but ended happy. Tuesday also saw US 10-year yields moving lower which excited everybody. But I am sceptical, this is only one data point and I think the FOMC hikes at their 31 Oct/01 Nov FOMC meeting.
Water crisis. This is going to hurt and it not going away any tine soon. Which businesses get hurt most?
Bad news all round (unless you buying).
Almost 40% of US government debt expires in the next four years and will be re-issued at markedly higher rates, 9x higher in some cases.
Money flowing into US bonds for yield.
Hits valuations lower as higher rates makes cash worth less in the future, but so far the market has ignored this fact.
Chart by Koyfin 15% discount for first 2 years
Simon Brown