South African stock alert


Afternoon Alert: MTN Group climbs 5.5%, leads market higher 20 September 2018 12:51 SAST


MTN Group Limited (J:MTN) has climbed 5.5% to trade at ZAR77.41 vs. the FTSE/JSE- Africa Top 40 Index which strengthened 70.0 points (or 0.1%) to 50,342.0. Representing a weighting of about 1.8% of the index, the stock accounted for 71.7% of today's gain. The shares have outperformed 95% of the market in the past week. Trading volume was 6.9 times average so far today.

Fundamental measures by comparison with the sector average [in brackets] indicate:


+ Price/Sales of 1 [1.4]

+ Dividend yield of 6.5% [5.4%]

Bullish Signals:

+ Total Liabilities/EBITDA of 3.2 is comfortably below the Joseph Piotroski benchmark of <5.

+ Tobin's Q Ratio is 0.6. Compared with the rest of the market the stock is undervalued.

+ The Brand Value represents an impressive 51.6% of the estimated Enterprise Value of ZAR147 billion (US$10 billion).


MTN Group today is at a discount of 44.7% to the 12-month high of ZAR140.0 on 18 Jan, 2018. It is at a premium of 12.1% to the 12-month low of ZAR69.07 on 17 Sep, 2018.

Bearish Signals:

The negative 7.86 MACD (Moving Average Convergence Divergence) indicator suggests a bearish signal.

In the South African market, the stock's relative price strength percentile is slipping at 6 for 6 months, 5 for 3 months and 2 for 1 month.

In the last three months the stock has hit a new 52-week low twelve times, pointing to a significant downtrend.

Net profit margin has averaged 5.8% in the last 3 years. This is lower than the sector average of 11.4% and suggests a low margin of safety.

Fundamental measures by comparison with the sector average [in brackets] indicate:


Return on Assets 1.9% [5.4%]

MTN Group Limited (J:MTN; JNB:MTN; SJ:MTN)

ISIN: ZAE000042164

PermID: 4295888681