REMGRO

Finweek English Edition - - INVESTMENT - Steve Mein­t­jes

BUY Stock­bro­ker­age Imara SP Reid has ad­vised clients to con­tinue to add this in­vest­ment hold­ing com­pany to their port­fo­lios. Head of re­search Steve Mein­t­jes com­mented: “The cur­rent P/E at around 23 times ref lects one-off fi­nanc­ing costs at Mediclinic and cor­po­rate ac­tion at RCL Foods. RMIH was af­fected by the short-term claims cy­cle at OUT­surance, while Unilever had a tough sec­ond half due to new com­pe­ti­tion in de­ter­gents. Other than that, the port­fo­lio re­mains com­prised of es­tab­lished win­ners, up-and-com­ing stocks mov­ing onto the radar such as Grindrod, as well as a clutch full of po­ten­tial win­ners in the un­listed small caps.” Stock­broking small-caps an­a­lyst Keith McLach­lan. The an­a­lyst has a 12-month price tar­get of R5.88/share, which is a sig­nif­i­cant pre­mium to the cur­rent R4/ share where the counter cur­rently trades. McLach­lan told clients: “We be­lieve that the mar­ket is mis­pric­ing Afro­cen­tric shares on the ba­sis of the large over­hang of new shares be­ing is­sued (profit war­ranty and pref­er­ence share re­demp­tion) that has cre­ated val­u­a­tion un­cer­tainty for most in­vestors. Our val­u­a­tion has al­ways taken th­ese shares into ac­count and, there­fore, we are com­fort­able that this mis­pric­ing just cre­ates a po­ten­tial in­vest­ment op­por­tu­nity, while the over­hang of new shares in the mar­ket may even of­fer large blocks of in­vestable script com­ing to mar­ket (in due course).”

BUY seg­ment and solid Ten­cent/pay TV earn­ings growth, un­der­pin a mul­ti­year 33% earn­ings growth out­look for Naspers based on our es­ti­mates.”

BUY

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