Five cheapest stocks on the JSE
OFFER VALUE. In broad terms, the JSE is looking expensive. THESE COUNTERS MAY
Dig a little deeper, though, and there are parts of the market looking extremely cheap. Particularly amongst small and micro caps there are some eye-catching valuations that may appeal to investors who don’t mind sniffing around the JSE’s less liquid parts.
Without looking too closely at their quality or underlying fundamentals, the following five companies offer extremely attractive valuations – using price-to-earnings (P/E), price-to-book and dividend yield – that may be worth further inspection. It’s currently trading on a P/E of 3.1 times and recorded a 184.7% increase in profit after tax for the year ended February 2017.
The company’s business model has its critics, and its performance can fluctuate dramatically, but bolder stock pickers might fancy their chances. Even after a 75% rise in its share price this year, Verimark’s still trading below where it was mid-2012.
Morningstar puts Verimark’s price-to-book at 0.533, and its current dividend yield is 15% – unmatched anywhere else in the market. Over the last five years, York’s share price has slipped from R4 per share to around R2.60 per share. However, in 2012 it delivered headline earnings per share (Heps) of 42 cents, and last year its Heps came in at 73 cents.
The company’s trading on a P/E multiple of 3.5 times, and a priceto-book ratio of just 0.299 according to Morningstar. It’s not currently paying a dividend, but did show a healthy increase in cash generation last year. At a market cap of R74 million, the human resources (HR) services company is easily overlooked. But for the financial year to end March, Primeserv grew revenue 12%, Ebitda 52% and Heps 28%.
Morningstar puts its current P/E at 3.7 times, and price-to-book at 0.456. It also offers a dividend yield of 2.4%. BSI Steel could be attractive to deep value investors. It’s trading on a P/E multiple of 5.8 times and a price-to-book of 0.658.
It’s yet to release its most recent set of results, but last year BSI Steel showed a strong recovery to grow headline earnings by 152%. The share price has however continued to slide, and at 35 cents per share, it’s now offering a dividend yield of close to 6%. Workforce operates in HR services – perhaps not the best place to find oneself in an economy shedding jobs. Yet, the AltX-listed company’s share price is up over 300% in the last three years.
Despite this, it’s still trading on a P/E multiple of 4.9 times. For the year ended December 2016 it grew revenue 52%, Ebitda 70% and Heps 45%.
Morningstar has the company’s price-to-book at 0.982. Workforce doesn’t, however, currently pay a dividend.