Mixed bag of 5 stocks to watch this week | Fin24

Mixed bag of 5 stocks to watch this week

Jun 02 2015 15:15


Company Data


Last traded 17
Change -1
% Change -7
Cumulative volume 139231
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 98
Change 3
% Change 3
Cumulative volume 57
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 200
Change 2
% Change 1
Cumulative volume 38890
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town - Food groups, property items and a bank form part of this week's five shares to watch.

Brett Birkenstock of Overberg Asset Management lists his five shares with interesting actions for the week ahead:

Reinet [JSE:REI]

Reinet published its results for the year ended March 31 2015, showing a 23% increase in net asset value (NAV) largely driven by the NAV uptick in their second-largest investment Pension Corporation (17% of Reinet's NAV) and favourable currency movements.

The current NAV in rand terms sits at circa R35.99, putting it on a 27% discount to NAV. We think the stock looks attractive at current levels and the low interest rate environment coupled with a generally weaker euro are net positive for Reinet.

Vukile [JSE:VKE]

Vukile published its results for the year ended March 31 2015 and indicated that distribution per share would increase by 8.1% to 136.77 cents, slightly better than anticipated. The fund recently acquired control of Synergy, and another exciting development is that of the East Rand Mall at a cost of R168.3m.

Management has guided for growth of between 7% and 8%, and will look for further acquisition opportunities both locally and abroad.

Famous Brands [JSE:FBR]

Famous Brands released its results for the year ended February 28 2015 in which headline earnings were up 15% and 467c, in line with forecasts. The dividend yield was up 18% to 355c which was slightly better than expected and the group maintained strong cash generation with R126m net cash on hand at year-end.

The group has managed to grow its footprint in the Middle East while it exited the Indian market. Based on current  forecasts, Famous Brands trades on a 12-month forward P/E of around 20 with a dividend yield of around 3.8%. Most analysts predict a three-year total annualised return of about 11%.

Rhodes Food Group [JSE:RFG]

Rhodes Food Group released its results for the six months ended March 29 2015 with earnings up 58%, but below expectations. Turnover was up 12.4% to R1.3bn, mostly driven by organic growth but also helped by growth in newer channels with exceptional performance by Bull Brand.

Management has confirmed a maiden dividend at year-end (September) which will be three times diluted headline earnings per share cover. The share has an Internal Rate of Return (IRR) of about 7%.

Standard Bank [JSE:SBK]

Standard Bank announced a business update for the four months to April 30, with expenses growth in line with expectations but higher than income growth. Net interest income was good and had strong income growth despite a challenging environment, with Nigeria in particular struggling after the recent oil price drop.

The decline in operating margin was disappointing, despite the positive net interest income growth. The share currently trades at a forward P/E of around 11.5 with a forward dividend yield of around 4.4%.

Do you agree with Brett's stock picks? Tell us why and send us yours.

* 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.

Disclaimer: The above article does not constitute financial advice and is not a recommendation. Investors must always seek the advice of professionals and trade with caution. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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