SEEK­ING OUT VALUE

Finweek English Edition - - INVESTMENT -

THEBE STOCK­BROKING REG­U­LARLY UP­DATES A VALUE MA­TRIX FOR CLIENTS IN­TER­ESTED IN SMALL- AND MID-CAP SHARES. IN JAN­UARY IT RE­LEASED ITS BEST AND WORST PICKS AND HERE IS WHAT THE STOCK­BRO­KER IS TELLING CLIENTS:

TOP THREE STOCK PICKS:

• Trans­ac­Tion cap­i­Tal (Tcp): A fi­nan­cial ser­vices group with strong man­age­ment on an un­de­mand­ing val­u­a­tion. Ap­prox­i­mately two-thirds of the group’s mar­ket cap is cur­rently cash.

• DaTaTec (DTc): While we do cur­rently have a ‘Sell’ rec­om­men­da­tion on Datatec, the stock has pre­dom­i­nantly for­eign cur­rency rev­enues and its share price drift­ing lower, cou­pled with rand weak­ness, has seen its im­plied value rise sub­stan­tially.

• Busi­ness con­nex­ion (Bcx): Long-term prospects for this ICT group re­main fairly good, but the mar­ket has sold off its stock, per­haps in im­pa­tience as short-term per­for­mance re­mains sub­dued.

OUR BOT­TOM THREE STOCK PICKS:

• eoH (eoH): While EOH is an ex­cel­lent growth story, the ICT

ser­vices group has seen its share price run ahead of its fun­da­men­tals. The share is over­val­ued ac­cord­ing to our per­cep­tion of its fair value.

• arB HolD­ings (arH): ARB has seen its share rise on light vol­umes, low­er­ing its im­plied re­turn and mak­ing it unattrac­tive as a po­ten­tial in­vest­ment in our eyes.

• Blue la­Bel Telecoms (Blu): We be­lieve that the mar­ket is ei­ther over­valu­ing this stock’s in­ter­na­tional as­pi­ra­tions or its lo­cal role as a dis­trib­u­tor of vir­tual prod­ucts, pric­ing in too much good news.

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