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JSE Direct with Simon Brown

Weekly podcast hosted by Simon Brown covering the JSE and listed companies.
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Now displaying: February, 2022
Feb 24, 2022
Wednesday was budget day and our tax experts, AJM Tax, hosted a live panel discussion covering the budget; highlights and low lights. We've included the recording for this week's episode.

The panellists were;

  • Divan Botha – moderator
  • Dr Albertus Marais ~ Director at AJM Tax
  • Laila Razack ~ CFO of Equites Property Fund
  • Simon Brown ~ Founder Just One Lap and host MoneywebNOW
Feb 16, 2022

Simon Shares

  • Strong Nedbank (JSE code NED) trading update.
  • If you held Steinhoff (JSE code: SNH) when it all went wrong in 2017 you have until 15 May to submit a claim.
  • Oceana (JSE code: OCE), now the CEO quits?

* I hold ungeared positions.

Upcoming events;


What's down with Purple Group* (JSE code: PPE), owners of EasyEquities?

After a high of 349c a month ago it's now 261c.

Firstly it's more sellers than buyers.

The hype of the pandemic trading is fading and easy returns are fading. So less trading, slower new accounts (albeit reports that they still have great new account rates).

Vacation is wild.

For the year ending August 2021

  • 737k active accounts (up 45.7%).
  • Each account makes R69 profit.
    • But as accounts age profits per account increase.

What can we expect to see for the year ending August 2022? (NOTE, the interim results to end February will be out early April).

  • 1million accounts? That's 263k new accounts and growth of 35%.
  • Profit per account R76 (10% growth, older account more profitable BUT less market volatility means less transactions).
  • = R76million profit (I ignore GT247 and Emperor Asset Management)
  • With 1.2billion shares in issue that's HEPS of 6.3c = forward PE of ±40x

That seems fair, but there are risks.

  • The assumptions above could be wrong
  • GT247 could lose money
  • New projects cost money
  • Dilution with new share issues
  • I am only using EasyEquities, ignoring other business units.

There are of course potential upside surprises as well

  • The assumptions above could be wrong
  • Growth is better
  • GT247 makes money and EasyProperties kicks in strongly

I sold 35% of my holding at 315c-345c on the way up, this was because it simply became too large within my portfolio (was the biggest holding after buying at 50c less than 2 years ago). But I am happy to continue holding.

Feb 9, 2022

Simon Shares

  • Great Sappi (JSE code: SAP) results.
  • Strong Hudaco (JSE code: HDC) results.
  • Top40 is trading at all-time highs, as is Resi10 and MidCap is almost there.
  • Kastle back to work barometer shows office attendance in the US is still not back to levels from before the most recent pandemic wave and around 33% (on average) of pre-pandemic levels. Back in November, the average was just over 38%.
  • IPO process explained.
  • Ashburton ETFs have moved over to FNB.
  • Meta Platforms (Nasdaq code: FB); Facebook, Instagram and WhatsApp
    • Down 25% on the day of the results. Fell further and now off 43% from September 2021 highs and back at May 2020 levels.
    • Market cap below US$600billion, that happens to be the number House legislators picked as the threshold for a “covered platform” in a package of competition bills aimed at Big Tech.
    • Active users declined
    • $10billion lost revenue due to new iOS privacy rules
    • $10billion on metaverse.
    • Regulatory issues.
      • Meta threatens to shut down Facebook and Instagram in Europe over proposed regulations. The EU says, 'please do'.
    • All said this is just one quarter, the next few quarters will tell us the true story.

Upcoming events;

Feb 3, 2022

Simon Shares

  • PGMs are on the move, most notably palladium and rhodium. But the miners are not.
  • Combined Motor Holdings* (JSE code: CMH) strong trading update.
  • MTN (JSE code: MTN) vs. Vodacom (JSE code: VOD) updates. Who's winning?
  • Strong Astral (JSE code: ARL) update, but for the half ending March - so off low base.
  • Ascendis (JSE code: ASC) looking to sell three businesses, but that won't leave much behind.
  • OPEC+ agrees to a 400k barrel/day increase from March, this was the initial plan from last year.
  • The local CPI basket is changing.
  • Satrix is listing an India ETF, currently in IPO.
  • The local prime interest rate increased 0.25% last week. This adds R152 per R1million of a bond. Not a lot, but this is the second one already and we have many more coming.
  • The ARK Innovation ETF (NYSE code: ARKK) has had a tough year and at a point, in January, it was behind the Nasdaq over the life of the fund and it is trailing the Nasdaq over one and three years. That all said, they publish all their research and released their Big Ideas 2022 report which is well worth the read.
* I hold ungeared positions.

Upcoming events;

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