ASPEN PHARMACARE HOLDINGS LTD
Aspen Pharmacare Holdings Ltd. manufactures and supplies branded and generic pharmaceutical products. It operates through the Commercial Pharmaceuticals and Manufacturing segments. The Commercial Pharmaceuticals segment consists of the following business sub segments: Sterile Focused Brands, which includes the Anesthetics and Thrombosis portfolios; and Regional Brands, which are products that are managed on a regional basis. The Manufacturing segment relates to the manufacture and sale of active pharmaceutical ingredient and finished dose form products to third-party customers. The company was founded by Michael Guy Attridge and Stephen Bradley Saad in 1850 and is headquartered in Durban, South Africa.
- Current Price: R245.90
- Range bound movement between R230 – R250 level shows that the stock is in a healthy correction phase and is looking biased towards upside potential.
- Market Capitalization: R110.541 Bn
- The high expenses attributed to unusual items is positive news for Aspen as they are one-off expenses in nature. All else equal, the company is set for profitability in the near future.
The management team is doing an extremely good job in reducing the company’s overall debt levels, which comes at a short-term cost such as selling some of their business segments/divisions. However, the positive price reaction over the last two years has been an indication that the market is favoring the shift from various operations into focusing on the core roots of the company and resurfacing the foundation.
CLICKS GROUP LTD
Clicks Group Ltd. operates as an investment holding company, which engages in the retail trade of healthcare products. The company operates through the Retail and Distribution segments. The Retail segment comprises Clicks, health, beauty, and homeware retailer; Claire’s, retailer of jewelry and accessories; GNC, retailer of health and wellness products; retailer of entertainment-related merchandise; and The Body Shop, which offers toiletries, cosmetics, gifting and grooming, with stores in the Republic of South Africa, Namibia, Swaziland, Botswana, and Lesotho. The Distribution segment involves in UPD, a pharmaceutical wholesaler that operates within the Republic of South Africa and Botswana. The company was founded by Jack Goldin in August 1968 and is headquartered in Cape Town, South Africa.
- Current Price: R287.15
- Trading at multiples equivalent to matured international companies, it is a pay for what you get valuation.
- Market Capitalization: R68.412 Bn
- Turnover up by 10% over the latest reporting period.
- Stable dividend at 1.76% yield backed by strong cash flow.
Clicks has been one of the most stable growing stocks on the JSE for the past couple of years. The future growth prospects still look promising and their current infrastructure and highly skilled and top performing management team are certainly well positioned to steer the group into new territory in the near future. Any meaningful decrease in price remains a buy opportunity for the foreseeable future as the group has a sound balance sheet, strong cash flow generation and pays a sustainable dividend to its shareholders.
PICK N PAY STORES LTD
Pick n Pay Stores Ltd. operates as an investment holding company, which engages in the trading of retail food, clothing, general merchandise, pharmaceuticals, and liquor. It operates through the South Africa and Rest of Africa segments. The South Africa segment offers formats under the Pick ‘n Pay and Boxer brands. The Rest of Africa segment is responsible for the company’s expansion into the other part of Africa. The company was founded by Raymond David Ackerman in 1967 and is headquartered in Cape Town, South Africa.
- Current Price: R60.50
- Priced at quite a step valuation given how small the market share is that Pick ‘n Pay Stores control compared to the valuation is had at its all-time high.
- Market Capitalization: R28.642 Bn
- Estimated R1bn loss from the looting during July.
- Management change welcomed by the market give the positive price reaction.
For the time being Pick ‘n Pay Stores Limited remains one for the watchlist as the shares are just so much more competitive when compared to the bigger market players such as Shoprite. However, if Pick ‘n Pay can manage to tap into the broader market for consumer retail products and be less reliant on their current client base, they will be able to grow at more optimistic rates. Given how competitive the South African consumer retail market is, shareholders and prospective shareholders should not expect too much from the short term results has market share in this space is not unlocked overnight.
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