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SHARE WATCH: Bitcoin, cars and beer in focus

Dec 05 2017 15:45

Cape Town - Overberg Asset Management share analyst Kirk Swart focuses on auto, Bitcoin and beer shares in this week's share watch.

Volkswagen

Volkswagen has seen its share price increasing very nicely, as the diesel scandal starts fading and the German economy gains momentum. The year to date return is around 33%.

Volkswagen's next big move is in the battery powered app based taxi service. The company recently revealed the Moia minivan, a battery powered minivan that has a range of more than 300 kilometres and offers passengers fast internet access.

Customers will be able to book their rides via a cellphone application. This will be a big step towards alleviating traffic congestion. Moia will rival Uber in the taxi space.

Bitcoin

Bitcoin crept over $11 000 on Monday. The total market capitalisation of Bitcoin is $190bn. To get a sense of the enormity of Bitcoin, at a market capitalisation of $190bn, it is bigger than Goldman Sachs and UBS. At some point the growth will stop. As Warren Buffett always said, “only when the tide goes out do you discover who's been swimming naked”.

Many ask when will the rise in Bitcoin stop. If there are more buyers than sellers out there, Bitcoin will continue to rise. However, be aware every monetary system is based on trust. In South Africa, we trust the rand as official means of tender. The SARB is mandated to protect the currency and acts as lender of last resort.

With Bitcoin there is no central bank that backs the currency.

Steinhoff Africa Retail Limited [JSE:SRR]

Steinhoff Africa Retail Limited (STAR) released its results for the year ending September 2017 on  Monday. Some of the pro-forma highlights include a 13.2% increase in revenue, a 100 bps margin increase to 10.5% and a 25.2% increase in operating profit.

STAR listed as recently as September 2017, with the initial public offering resulting in the issue of 750 million shares. It is also reported that STAR has exercised a call option giving them a 23% stake in Shoprite with a majority voting share of 50.6%.

Alexander Forbes [JSE:AFH]

In the recent results released by Alexander Forbes, the company describes itself as being back in the game. The company has placed focus on cashflow plus growth in its ‘Ambition 2022’ strategy.

For the six months ending September 2017, cash flow from operations came in at R470m with operating expenses being contained at 2%. The group is experiencing healthy trading margins of 25.3%. Alexander Forbes delivered operating profit of R455m, up 5%.

Heineken

Heineken shares trade in Amsterdam. Heineken is the second biggest brewer in the world. The company recently announced that it will be opening a $100m brewery in Mozambique in 2019. The plant will be built close to Maputo and have a capacity of 800 000 hectolitres.

This is a move to steal market share in Southern Africa from market leader AB InBev [JSE:ANB]. Last year, Heineken also opened a marketing office in Mozambique.

Mozambique is set to grow GDP by 4.7% this year coming from a very low base following a default on its dollar debt.

Do you agree with Kirk's stock suggestion? Send us yours and tell us why.

*Kirk Swart is an analyst at Overberg Asset Management, 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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