Johannesburg - While shares in the small banking group Capitec Bank Holdings [JSE:CPI] continue to reach new heights, the "smart money" appears to be using the opportunity to sell into strength.
Earlier this week, the group touched an all-time high of R156.28 and is now trading around the R150 mark, indicating that investors continue to see growth opportunities. The share has had a remarkable 12 months, rising from R58 a year ago despite the fallout from the global banking and financial crisis.
While Capitec has been a rip-roaring investment for many on the JSE, those closer to the company appear to be less bullish on its prospects, cashing in part of their holdings.
Group chief executive
Riaan Stassen has sold shares worth R18.7m this year, after exercising around R3m in options. Financial director Andre du Plessis has sold down about R4m worth of shares and exercised about R4.8m in options. Non-executive director Merlyn Mehl sold R2.7m, with the most recent sales being at R149.
Stassen was a seller at R105 in April, R112 in June and this week at R150 while Du Plessis sold off at between R129 and R149 from June to October.
Carl Fischer, head of investor relations at Capitec, said there was nothing untoward about the transactions. "There is a period where executives can exercise their options and we are now out of the closed period around our results," he told Fin24.com.
He pointed out that both Stassen and Du Plessis remained significant shareholders, with Stassen holding 2.4 million shares and Du Plessis 1.013 million at the end of the last financial year.
Capitec remains outside the mandate of many unit trust managers, who cannot invest in companies that are below a certain market capitalisation.
According to unit trust data for the first six months of the year, those funds which can invest were net sellers of Capitec, reducing their holdings by around 104 000 shares. The Nedgroup Investments Financials Fund and PSG Flexible Fund were the largest sellers.
About 34% of Capitec is owned by JSE listed investment group PSG.
Stockbrokerage Barnard Jacobs Mellet pointed out that on historic earnings, Capitec was now trading on a price to earnings (PE) multiple of around 18 times. "Notwithstanding the company’s growth profile, given the share price movement the valuation looks stretched to us," the firm advised clients.
Capitec recently delivered a 58% increase in interim earnings and grew its active client base to 2.5 million.
Management however was noncommittal in its outlook, advising: "We will continue to open new branches, acquire more clients and grow our advances book while managing our capital requirements."
- Fin24.com
· Ashton holds ordinary and preference shares in Capitec.