On the punt

Finweek English Edition - - INVESTMENT - MARC ASH­TON

THERE ARE three coun­ters that I have been eye­ing for my small Con­tracts For Dif­fer­ence (CFD) trad­ing ac­count in the last few weeks: Exxaro, African Bank In­vest­ments Lim­ited (Abil) and Stein­hoff. Both Exxaro and Abil are now sit­ting in my cur­rent tar­get range and re­cently Stein­hoff seems to be get­ting close to a level I would feel com­fort­able buy­ing.

With Stein­hoff now trad­ing at be­low R24/ share the temp­ta­tion is there to pull the trig­ger, but I sus­pect if you are pa­tient, you might be able to get in nearer R21/share if eq­uity mar­kets sell down this week.

On the plus side, Stein­hoff trades on a sin­gle-digit p:e mul­ti­ple, of­fers some in­ter­est­ing rand-hedge char­ac­ter­is­tics and has some qual­ity in­sti­tu­tional share­hold­ers – In­vestec As­set Man­age­ment (15%) and Fo­ord As­set Man­age­ment (5%) – which sug­gests value in the long run. On the neg­a­tive side, the ex­po­sure to Europe is weigh­ing on the group.

Wait for a break be­neath R22 and then see if you can go long with a bit of gear­ing.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.