SEEKING OUT VALUE
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.