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Cape Town - This week's share watch focuses on banks, energy and Africa, with Oakbay, CSG Holdings, Standard Bank, FirstRand and EOH Holdings in the mix.
Overberg Asset Management's Kirk Swart lists his five shares to watch this week.
Oakbay Resources and Energy [JSE:ORL]
Oakbay Resources and Energy is a company that predominantly mines uranium through its 74% ownership of Shiva Uranium. Oakbay also mines gold to help fund its uranium interests.
In 2010, Oakbay bought Uranium assets from Uranium One, naming the company Shiva, with a financial loan from the Industrial Development Corporation. With Oakbay unable to repay the loan as agreed, the IDC ended up with a 3.7% stake in the company when it listed in 2014. Oakbay is yet to show profits.
Oakbay Resources is headed by Varun Gupta, with Atul Gupta chairing the board.
CSG Holdings [JSE:CSG]
On Friday, this counter rose by 10.34% to close at R1.60. CSG Holdings is a small cap company that has quietly gone on the acquisition trail by growing its integrated services business. What is interesting about CSG Holdings is that PSG Private Equity holds a significant stake of 16% in the company.
The share price of CSG has traded thinly. CSG does much of its business in other African countries and as a result, their share price is not looking that good. However, with PSG backing this relatively unknown services group we can expect exciting things to come from CSG and PSG in future years.
Standard Bank [JSE:SBK]
The Standard Bank Group offers clients a wide range of banking, investment and financial services. Standard Bank is continually expanding its footprint in Africa and has growing operations in 20 African countries. However, these investments are not without risk. Excluding Africa, Standard Bank has a presence in various other emerging markets.
For the year ending December 31 2015, Standard Bank increased headline earnings by 27% to R13.59 per share. Return on equity increased to 15.3% from 12.9% and dividends rose by 13% to R6.47.
Following 9/12 when Nhlanhla Nene was fired, banking shares have been sold off. If the South African economy can wake up from its deep sleep, banking shares certainly offer value at these levels.
FirstRand Holdings [JSE:FSR]
FirstRand has a portfolio of leading brands that provide banking, insurance, and investment services to clients on a retail, institutional and governmental level. FirstRand has seen its product range stretch outside South Africa to various international markets. Some noteworthy brands include: Rand Merchant Bank, First National Bank and WesBank.
FirstRand released a decent set of results for the interim period ending December 31 2015. Some highlights include fully diluted normalised earnings per share growing by 10% to R1.94, and an interim dividend increase of 16% to R1.08. Return on equity was reported at 23.4%.
EOH Holdings [JSE:EOH]
EOH Holdings is a South African ICT services company that provides business and technology solutions to clients in various industries in South Africa, Africa, and the United Kingdom. Recently EOH further increased its global presence by expanding into Iran.
EOH delivered a good set of results for the first half of the 2016 financial year. The results were driven by both internal and acquisition growth, with organic growth contributing 54% of the increase in revenue. Some highlights include revenue increasing by 30% to R6bn, operating profit lifting 35% to R682m and earnings per share rising by 23% to R3.58.
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* Brett Birkenstock is a director at Overberg Asset Management (OAM), an authorised financial services provider (No 783) which specialises in the private management of local and global discretionary portfolios as well as pension products.
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