PSG stays in the lead

Finweek English Edition - - MONEY -

The rel at i vely young PSG Group* seems to be mak­ing his­tor y as it has been t he strong­est share on the JSE for some time now, mea­sured in terms of the per­cent­age of its price above its 200-day ex­po­nen­tial mov­ing av­er­age (EA). The share price rose by more than 2 100% over t he past 10 years (ex­clud­ing div­i­dends).

Its 28.3% in­ter­est in Capitec has prob­a­bly once again played a ma­jor role in this in­crease, as the lat­ter also spiked sig­nif­i­cantly af­ter it ex­pe­ri­enced a cor­rec­tion of 29% since April. Pi­o­neer Foods, in which PSG Group is also a ma­jor share­holder, is still ex­pe­ri­enc­ing buy­ing pres­sure. This share also reached a new high, which has re­sulted in it main­tain­ing its po­si­tion near the top of the list of strong­est shares. There is spec­u­la­tion that cor­po­rate ac­tion has boosted its share price.

The ex­cel­lent re­sults that Mondi re­cently pro­duced also pushed its share price to a new high. It could prob­a­bly be re­garded as the top share in a strug­gling in­dus­trial sec­tor.

Those in­vestors who made use of the re­cent de­cline in the prop­erty sec­tor by in­vest­ing in the Re­silient Prop­erty In­come Fund should feel sat­isf ied. The share has re­cov­ered re­mark­ably and re­cently reached a new high. It has a win­ning recipe in that it fo­cuses on dom­i­nant re­gional re­tail cen­tres with a min­i­mum of three an­chor ten­ants. It main­tains good and suc­cess­ful re­la­tions with es­pe­cially na­tional re­tail­ers. Hyprop is another im­por­tant prop­erty group that also seems to be on its way to a new high with a price/vol­ume trend* that has turned pos­i­tive since the re­cent cor­rec­tion. (Price/vol­ume trend graphs are cal­cu­lated by mul­ti­ply­ing the weekly vol­ume with the per­cent­age change in the price. This of­ten gives a handy early in­di­ca­tion of ac­cu­mu­la­tion or dis­tri­bu­tion.)

Among the poor per­form­ers it is still the re­sources shares that are bat­tling most. They have as fel­low trav­ellers Aveng and Mur­ray & Roberts, t wo large play­ers whose bat­tered share prices ref lect the tribu­la­tions of the build­ing and con­struc­tion sec­tor. It is no se­cret that long-term value in­vestors have been sniff­ing around among cycli­cal shares that have reached their low­est lev­els in years. It is also note­wor­thy that di­rec­tors of, among oth­ers, Im­pala Plat­inum, have been buy­ing the com­pany’s shares, which are not only trad­ing at be­low book value, but which have as­sets that are in pos­i­tive ter­ri­tory from a cost point of view, de­spite the weak plat­inum mar­ket.

Of the shares that re­cently broke t hrough t hei r 2 0 0 - day av­era ge, Tru­worths, Vuk­ile and Re­unert look the most in­ter­est­ing. With re­gard to the lat­ter, there has been buy­ing pres­sure as mea­sured by its price/vol­ume trend.

* The au­thor owns shares in PSG.

WEAK­EST STOCKS

LON­MIN

KUMBA IRON ORE

AVENG

HAR­MONY

AL­TRON-A

ARM

PAN AFRICAN

AS­SORE

AN­GLOGOLD

IM­PLATS

ILLOVO

ARCELORMIT­TAL

EXXARO

GOLD FIELDS

M&R HOLD­INGS

GLEN­CORE

AN­GLO

GRINDROD

% BE­LOW 200-DAY EA

-68.3

-48.9

-48.8

-42.5

-42.3

-38.4

-38

-37.95

-37.3

-34

-29.6

-27.4

-27.2

-26.4

-23.8

-23.7

-22.3

-20.5 STRONG­EST STOCKS

PSG

PI­O­NEER FOODS

MONDI PLC

MONDI LTD

CAPITEC

RE­SILIENT

STEIN­HOFF

MPACT

NASPERS-N

KAP

DIS­COV­ERY

HYPROP

TELKOM

SPAR

NET­CARE

WOOL­WORTHS

FIRSTRAND

MR PRICE

CLICKS

OLD MU­TUAL

RMI HOLD­INGS

INVESTEC PLC

SU­PER GROUP

RMB HOLD­INGS

INVESTEC LTD

DATATEC

AS­TRAL

MEDI­CLINIC

DIS­TELL

BAT

ASPEN

AVI

CAPPROP

SABMILLER

REM­GRO

OCEANA

RICHEMONT

SAN­LAM

*Based on the 100 largest mar­ket cap­i­tal­i­sa­tions BREAK­ING THROUGH

88.7

88.3

87.3

79.6

71.3

66.6

63.2

58.6

58.3

54.8

52.96

48.6

48.2

47.8

47.6

47.6

47.1

46.03

44.5

43.6

41.3

41

40.8

40.1

39.4

38.7

37.9

37.3

37.1

35.99

33.7

32.8

31.3

28.4

27.9

26.6

25.9

% ABOVE 200-DAY EA

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