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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: August, 2022
Aug 31, 2022

Simon Shares

  • Save R500k with a deposit.
  • ETF closing prices are an absolute mess.
  • Cashbuild (JSE code: CSB) results see them coming back to earth after a pandemic boost.
  • Education stocks all published results. ADvTECH* (JSE code: ADH) is my pick, but all showing student growth and cash generation.
  • Shoprite* (JSE code: SHP) gets permission to turn their money market account into a bank account. Grindrod (JSE code: GND) currently runs the service for Shoprite and African Bank is buying Grindrod Bank.
  • Walmart (NYSE code: WMT) is set to make an offer to the Massmart (JSE code: MSM) minorities for the remaining 47% at 6800c.
  • Netflix (Nasdaq code: NFLX) plans to price its ad-supported plan at $7-to-$9 per month with about 4 minutes of adverts per hour.
  • Purple Group* (JSE code: PPE) back at 203c, always be very careful of casing a news story (the Asia deal announced last week with very few details).
  • Tsogo Sun Hotels (JSE code: TGO) changes its name on 7 September. They will become Southern Sun Limited (JSE code: SSU).
  • UK inflation, Goldman Sachs now saying 22% is possible next year.
  • Sun International* (JSE code: SUI) strong results. Consumers under pressure shouldn't hurt too much as they mostly target higher LSMs and they paid the first dividend (88c) since 2016. Currently, ±3200c is resistance.

Greylisting

Financial Action Task Force (FATF)

  • Cracking down on money laundering and funding terrorism.
  • Greylisting can reduce a country's capital flows by as much as 7.6%, according to an IMF working paper.
  • Cabinet has approved a raft of new amendment bills but leaving it late, very late.

Our deadline is September/October after being put on the watch list last year.

The important questions;
  • Will we get greylisted?
  • What happens if we do?
  • If greylisted, how do we get off the list?

* I hold ungeared positions.

Aug 24, 2022

Simon Shares

  • Nasdaq (650 points), S&P500 (80 points) & Euro Stoxx50 (22 points) trades all closed. FTSE100 still going currently +100 points.
  • Old Mutual BEE deal, will go into details, but it only closes in late October so no rush.
  • Spur (JSE code: SUR) looking very good.
    • PE ±15x and DY ±5%
    • From the Spur earnings call "And we know that only 18% of the South African adult population represents 80% of economically viable consumer segment."
      • Revenue at record with space to get margins back to pre-pandemic levels. Net income margin was ±5%, historically over 20%.
  • [caption id="attachment_36416" align="aligncenter" width="849"]Spur; revenue, net income, NI margin Spur; revenue, net income, NI margin[/caption]Afrimat (JSE code: AFT) Gravenhage manganese mine deal failing due to the Water Use License being materially different. They raised ±R650million last month.
  • Purple Group* (JSE code: PPE) does a deal in Asia.
  • Kap Industrials (JSE code: KAP) good results and great insights into other industries.
  • Citi now says UK inflation to hit 18% early next year (last week they said 15%).
  • Sasol (JSE code: SOL) pays a dividend, 1470c.

* I hold ungeared positions.

Aug 17, 2022

Simon Shares


Thungela resources (JSE code: TGA) still a buy?

R60 dividend, 40% forward DY

HEPS 6723c, forward PE 2.5x

Mis-priced at listing, unbundling often cause this to happen.

Ukraine's war gave it new legs.

Risks

  • Coal price
  • Rand strength
  • Ukraine war
  • Transnet

* I hold ungeared positions.

 

Aug 10, 2022

Simon Shares

  • Renergen* (JSE code: REN) the Central Energy Fund has successfully completed their due diligence on the R1billion, final approval is still required.
  • Mpact (JSE code: MPT) results.
  • US jobs data and unemployment continue to belie the recession talk.
  • US inflation for July was 8.5%, a good number.
  • A gallon of gas has fallen below $4 in the U.S. for the first time since March.
  • Credit Suisse has lowered its 2023 UK GDP forecast to -0.6% from 0.5%; expects the UK to enter a recession from Q4 2022 until Q3 2023.
  • Elon Musk sold $6.9-billion (R14.5-billion) of his shares in Tesla (Nasdaq code: TSLA) – his largest sale yet – saying he may need the cash if he has to buy Twitter (NYSE code: TWTR).
Embrace the risk
  • Investing is about risk
  • Without risk, there is no reward
  • Without risk, you are saving
  • But the risk needs to be reasonable and the returns realistic

* I hold ungeared positions.


 

Aug 3, 2022

Simon Shares

  • Massmart (JSE code: MSM) update, retail margins are being squeezed, the exception is clothing retail.
  • Thungela Resources (JSE code: TGA) very strong trading update.
  • JSE (JSE code: JSE) results, strong.
  • Nancy Pelosi lands in Taiwan and markets don't really care and China will complain - but this is not leading to war.
  • Uber (NYSE code: UBER) finally hits cash flow positive.
  • OPEC+ 100,000 b/d output hike, expectations (hopes?) were for 4-5x that and the second smallest increase since 1986.
  • Earn 11% with Retail Savings Bonds
What's the only thing we control in markets
  • The price we pay
  • Everything else is beyond our control
  • So use your one power carefully

 

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