Resilient the next Steinhoff?

PROPERTY GROUP UNDER FIRE Fears that Resilient and its sister companies are in trouble has sparked a frantic sell-off in their shares.

has launched its own internal probe.

Given the continued sell-off in shares, investors might be wondering whether the Resilient stocks are bargains or value traps.

There’s no doubting what the directors think. Directors of Resilient and the three sister companies have emerged as the largest buyers of shares in recent weeks.

Des de Beer, CEO of Resilient, has been the biggest buyer, snapping up about R70 million Resilient stock in four tranches during February.

Resilient’s volatile share price hit a three-and-a-half-year low of R67.70 on Thursday but has since recovered to R74.

“I have increased my investment in Resilient as I see good long-term value,” said De Beer on why he bought more Resilient stock.

There have been similar director dealings at Fortress, Nepi Rockcastle and Greenbay in recent weeks.

In its leaked report, 36ONE questioned whether the buying of Resilient companies shares by key directors is an attempt to support the share prices.

Resilient rejects this, saying it doesn’t determine the market price of its shares and the fund manager’s “untested allegations” of share price manipulation aren’t substantiated and won’t “stand up to independent scrutiny”.

When a company like Resilient and its sister companies are facing three share trading investigations (JSE, FSB and Resilient’s own), it might not be prudent for directors to buy shares, said Garreth Elston, an analyst at Golden Section Capital.

“It’s not the time for any insiders to be buying shares. On an ethical basis, no one should be doing any insider buying or any of the associated companies,” said Elston.

Elston believes the only stock in the Resilient stable that has overcorrected and justifies directors purchasing shares is Fortress.