Hold if you have to
ELLIES RESULTS WERE slightly worse than expected with the weaker rand and consumers under pressure.
Going forward we’re not likely to see either of these two issues suddenly resolve themselves and while digital terrestrial television (DTT) will be a boon, details here remain sketchy as to when the roll-out will start (we are supposed to have concluded the process by end-2015). Further, while the latest census said that there are 11m households with TVs, how many will get the set-top box? Admittedly, there will be additional channels as DTT frees up space, but many may consider their current satellite solution to be more than enough.
The last issue with DTT is that it will be a hotly contested space with other companies also trying to get as much as possible from the process, which could well crimp margins.
If you hold Ellies I don’t see much more weakness ahead but I equally don’t see great share price appreciation, so I while I’m not rushing out to buy, I’d recommend you hold if you already own the stock.