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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: June, 2022
Jun 29, 2022

Simon Shares

  • Episode #500. Huge thanks to all, I go into some background about the show. Where and how it started, lessons learnt and more.
  • Stage 6, the Rand lost 30c.
  • Sun International* (JSE code: SUI) update for five months to 31 May 2022 shows they are nearly back at pre-pandemic revenue and this while we still had some restrictions and fewer international travellers.
  • Naspers (JSE code: NPN) / Prosus (JSE code: PRX) results. Tencent (Hong Kong code: 700) is 125% of profits. The other businesses are all loss-making and in tough markets. They plan to sell down Tencent and buy back Prosus shares, but the discount to NAV remains around 50%, even after a massive move on the announcement.
  • Grindrod (JSE code: GND) good update and share has been flying. This remains a very cyclical business and right now the cycle is paying off.
  • Invicta (JSE code: IVT) saw strong results albeit some accounting points improved them a bunch.
  • JSE (JSE code: JSE) trading update is surprisingly strong with HEPS expected +24%-32% for six months ending June.

* I hold ungeared positions.


 

Jun 22, 2022

Simon Shares

  • Thungela (JSE code: TGA). Coal prices doing great, production is good but rail is the problem but HEPS is expected at 5800c. If we double for the full year we can expect ±R116 and a dividend of ±R100?
  • Stor-Age* (JSE code: SSS) results are not exciting but steady.
  • Omnia (JSE code: OMN) results were really strong, another special dividend and good future prospects.
  • Orion Minerals (JSE code: ORN) raises money to get their Prieska up and running. Expected to take some 19 months.
  • Amazon prime coming to South Africa next year. It will seriously challenge Takealot, owned by Naspers (JSE code: NPN)).
  • City Lodge* (JSE code: CLH) trading update show them cash flow positive with occupancies back in profit.

* I hold ungeared positions.


Crypto in trouble

Not an inflation hedge nor a store of value. Just another risk asset. The problem is as QE ends and rates rise, will it still see a strong inflow of money? I think not.

It's not the end crypto, but new highs could be some way off.


 

Jun 14, 2022

Simon Shares

  • US May inflation, 8.6%. Federal Reserve announced rates last night and surely it was 0.75% for the first time in 28 years?
  • Either we have continued high inflation or a recession, maybe even both?
  • Time for a Paul Volcker and do a 1% raise?
  • It's ugly, Nasdaq and S&P500 both closed at lows for 2022 and are both are now in a bear market.Nasdaq draw down at close 13Jun22 S&P500 draw down at close 13Jun22 S&P500 draw down at close 13Jun22
  • And failing a real test or liquidity and exchanges halt withdrawals.
Jun 8, 2022

Simon Shares

* I hold ungeared positions.

Upcoming events;

[events_list limit="3"]


ddd


Are Robinhood's troubles Purple concerns?

[caption id="attachment_34522" align="aligncenter" width="761"]Robinhood since listing vs. Purple Group Robinhood since listing vs. Purple Group[/caption]

Robindhood Purple Group
(Nasdaq code: HOOD) Purple Group* (JSE code: PPE);
Listed July 2021 at $38, hit $85 and now under $10 (-75%) July 2021 145c, high since 350c and now 260c (+81%).
Makes most of their revenue from selling the deal flow and Gold accounts. Revenue is from transactions.
The majority of transactions are in options or crypto. The majority of transactions are in equity, but crypto, EC10, is growing.
Needed a quick $billion to settle meme stock trades. The balance sheet is fine.
Huge repetitional damage when they halted trade in some meme stocks.  
Value traded by clients has been falling since Q1 2021. Value traded by clients fell in the last set of results.
Not yet profitable. Profitable, PE ±50x.
Users declined in 2022. Users grew in last results to +1million active accounts.
Market cap per user = $478 (ZAR7,400) Market cap per user = ZAR3,263
Revenue per user (2021) = $80 (ZAR1,250) Revenue per user = R109
Jun 1, 2022

Simon Shares

  • The good news is the US had a green week last week, for the first time in 8 weeks
  • Goldfields (JSE code: GFI) is down on news it paying a chunky 33.8% premium to acquire Canadian Yamana Gold in an all-share deal
  • We finally got the petrol price increase and the 150c fuel levy reduction remains in force, for now.
  • German inflation hits 7.9% for May. Highest since the 1950s. EU inflation for May 8.1%, the highest ever.
  • EU agrees on a partial ban on Russian oil imports
  • Monthly dividends in a JSE equity portfolio
  • Offshore ETFs paying monthly dividends
 

Demand destruction in commodities

There comes a point at which a commodities price is simply too high and the price itself reduces demand. Depending on the commodity high prices often need to be high for protracted periods of time.

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