Listed Securities Watchlist October 2021
CAPITEC BANK HOLDINGS LTD
Business Profile
Capitec Bank Holdings Ltd. is a bank controlling company, which engages in the provision of retail banking services. It offers transactional banking services and loan products such as term loans, credit facilities, and credit cards. The company was founded by Michiel Scholtz du Pré le Roux on November 23, 1999 and is headquartered in Stellenbosch, South Africa.
Technical
- Current Price: R1,850.00
- Currently trading at a 9.8% discount to all time high
Fundamental
- Market Capitalization: R207.038 Bn
- Most recent results are mildly better than expected, except for costs which have increased by more than 30% compared to the previous period.
Summary
If we look at general valuation metrics such as price to earnings, price to book and cost to income for example, Capitec is priced as a very expensive share to own. However, when we look at their past growth rate and future potential growth rate, we can justify the high multiples at which the company is trading. However, most of the most recent selling pressure came from the much higher than anticipated operational costs, which the company claims it is facing due to challenges presented by the COVID-19 pandemic. The uncertainty associated with the path going forward and how to decrease these costs will continue to force the share to trade at a discount. However, as this share has predominantly been highly priced due to its above-average results over time, any bad result or below expected results will lead to an overreaction and create buying opportunities at discounted levels.
STADIO HOLDINGS LTD
Business Profile
Stadio Holdings Ltd. engages in the investment, growth, and development of higher education institutions. It owns higher education institutions namely: STADIO, Milpark, and AFDA, which offers undergraduate and post-graduate programs. The company was founded on August 25, 2016 and is headquartered in Cape Town, South Africa.
Technical
- Current Price: R3.15
- Currently trading at a 66% discount to all time high.
- The technical analysis side is supportive of stronger fundamentals given that the company has now turned profitable.
Fundamental
- Market Capitalization: 2.62 Bn
- Active students number up 11% over the reporting period showing there’s an increase in demand for the courses and material offered.
- New student complex in Centurion is ready for new students from the beginning of next year.
Summary
Given that roughly 80% of company’s student base were on a remote study course before the pandemic, the company was well positioned to adapt with the changes which many of its peers were not so well positioned to do. This also meant that the company already had the necessary infrastructure in place to migrate their on-campus students over to remote learning. In turn, the growth levels in active students mans that the company is most certainly putting its resources and infrastructure to good use as it accumulates more market share.
SIBANYE STILLWATER LTD
Business Profile
Sibanye Stillwater Limited operates as a precious metals mining company in South Africa, the United States, Zimbabwe, Canada, and Argentina. The company produces gold; platinum group metals (PGMs), including palladium, platinum, and rhodium; and by-products, such as iridium, ruthenium, nickel, copper, and chrome. It owns the East Boulder and Stillwater mines located in Montana, the United States; and Columbus metallurgical complex, which smelts the material mined to produce PGM-rich filter cake, as well as conducts PGM recycling activities.
The company is also involved in the Kroondal, Rustenburg, Marikana, and Platinum Mile operations situated in South Africa; Mimosa located on the southern portion of the Great Dyke in Zimbabwe; the Driefontein, Kloof, and Cooke surface operations located on the West Rand of the Witwatersrand Basin; and the Beatrix situated in the southern Free State. In addition, it owns an interest in surface tailings retreatment facilities; the Marathon PGM project in Ontario, Canada; the Altar and Rio Grande copper gold projects in the Andes in north-west Argentina; the Hoedspruit and Zondernaam PGM projects in South Africa; and the Burnstone and southern Free State gold projects in South Africa. Sibanye Stillwater Limited was founded in 2013 and is based in Weltevreden Park, South Africa.
Technical
- Current Price: R47.00
- Currently trading at a 39% discount to all time high.
Fundamental
- Market Capitalization: R129.63 Bn
- R7b investment in their Joint Venture with Ioneer’s mine in Nevada for lithium mining shows that the company is leveraging high gold and other commodity prices to strengthen and diversify their balance sheet.
Summary
We’ve seen a general trend between mining companies in South Africa to increase their capital outlay around the mining and production of coal as it still offers a fair return to the costs associated. However, the lithium Joint Venture will be a much more sustainable long-term play and its underling income will be generated in USD which further diversifies the company’s operations and will most likely prove to be more valuable than further operationalizing their new business in Rand denominated returns.
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Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.
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Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the remuneration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.
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Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).