Johannesburg - RMB Holdings [JSE:RMH]
, the JSE listed-investment group holding interests in FirstRand [JSE:FSR]
, Discovery Holdings [JSE:DSY]
and direct insurer Outsurance, is a buy at its present price levels, said analysts.
In a note to clients on Tuesday, stock brokerage Barnard Jacobs Mellet Holdings [JSE:BJM] said RMB Holdings has fallen more than its peers in the banking and financial services sectors. Since trading at 3 560c per share late July, the counter has slipped to around 3 110c.
"The stock is covered by four analysts - two with number one ratings - who have given it an average target price of 3 600c, 13% above last night's close. We would advocate buying at current levels," BJM said.
Steve Meintjes, head of research at stockbrokerage Imara SP Reid, is another analyst who assigned RMB Holdings an "add" recommendation. He said the recently announced merger of insurance groups Metropolitan Holdings [JSE:MET] and Momentum (a FirstRand subsidiary) is a catalyst for potential growth.
RMB Holdings also proved popular with asset managers in the first six months of 2010, with unit trusts being net buyers of 1.7 million shares in the counter. Some of the big buyers included the RMB Balanced and Value funds as well as the Nedgroup Investments Optimal Income Fund.
The group is currently trading under cautionary, which was renewed last week. Shareholders were advised that the group was reviewing a potential restructuring, which could affect the price.
When the group reported interim results for the period to end-December 2009, the intrinsic value of the listed investments was 3 194c. This indicates that the share is trading at about the same value as its listed investments, and does not recognise its R2.7bn in cash holdings.