PSG companies still top dogs; Pioneer a winner
The PSG Group and some of its associated companies are st i l l top dogs among t he strongest shares on the JSE. The only difference lately is that PSG* itself has moved to top of the list, with its offspring, Capitec Bank, in the second spot after it had the greatest momentum for some time.
Meanwhile, Pioneer Foods, a consumer- or i entated f ood g r oup i n which PSG i s a l s o i nvolved t hrough Zeder I nvestments, has replaced Telkom as the share in third place. Pioneer in fact represents an investment that all investors would love to own: a recovery stock (always a high risk) that delivers great profits should the turnaround succeed. The group has been (and still is to some extent) in a recovery sit uation after drastic restructuring took place, including the appointment of Phil Roux as chief executive about t wo years ago. Since Pioneer’s current bull phase kicked off at the end of 2012, the share has increased by some 220%, which once again confirms that the market will reward strong earnings growth.
The success attained i s evident from Pioneer’s interim report, which appeared l ast month. The overall operating prof it margin i ncreased f urther to 12.3% (it was - 6% when Roux t ook over), while adjusted headline earnings per share jumped by 39%. The dividend was increased by no l ess t han 46%. However, a question t hat one may well ask is whether this excellent performance is sustainable, given the extent recovery has progressed from low levels.
The weakest s ha r e s a r e s t i l l dominated by building and construction, as well as commodities, although Tiger