South African stock alert

NEWS BITES - AFRICA

This is an end of day Alert, produced after today's South African market close. It concludes the BSS News Bites intra-day Alert series (summaries below).

ARB Holdings, South Africa's 3rd largest electrical equipment company by market capitalisation, has tumbled 6.1% to trade at ZAR5.35 vs. the Electrical equipment sector which weakened 112.7 points (or 0.4%) to 30,743.8. Representing a weighting of about 5.9% of the sector, the stock accounted for 97.9% of today's loss. The shares have underperformed 93% of the market in the past week. Trading volume was 11.1 times average at the end of the day. Compared with the FTSE/JSE- Africa Top 40 Index which rose 5.7 points (or 0.01%) in the day, this represented a relative price change of -6.2%.

Technical indicators complementing today's significant downtrend:

+ In the last three months the stock has hit a new 52-week low once.

+ The price sank 5.5% in the last week and tumbled 7.0% in the last month.

Other Bearish Signals include:

+ Net profit margin has averaged 4.6% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

Note

ARB Holdings today is at a discount of 15.1% to the 12-month high of ZAR6.30 on 13 Mar, 2018. It is at a premium of 30.5% to the 12-month low of ZAR4.10 on 22 Jan, 2018.

Bullish Signals:

Interest cover is less leveraged at 6.4 times.

Total Liabilities/EBITDA of 1.6 is comfortably below the Joseph Piotroski benchmark of <5.

Tobin's Q Ratio is 0.8. Compared with the rest of the market the stock is undervalued.

As per the Du Pont analysis, Return on Equity is high at 21.8%.

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

Undervaluation:

Price/Earnings of 8.6 [19.1]

Price/Sales of 0.5 [0.6]

Price to Book of 1.5 [2.4]

Dividend yield of 6.2% [3.6%]

Return on Equity 21.8% [10.5%]

Return on Assets 11.3% [5.1%]

Return on Capital Employed 25.2% [20.8%]

TODAY'S ALERT

Afternoon Alert: ARB Holdings tumbles 6.1%, leads Electrical equipment sector lower

20 April 2018 12:50 SAST

ARB Holdings Limited (J:ARH) has tumbled 6.1% to trade at ZAR5.35 vs. the Electrical equipment sector which weakened 10.4 points (or 0.03%) to 30,846.1. Representing a weighting of about 5.9% of the sector, the stock accounted for the loss. The shares have underperformed 94% of the market in the past week. Trading volume was 5.0 times average so far today.

RECENT ALERT

Afternoon Alert: ARB Holdings tumbles 6.4%, leads Electrical equipment sector lower

17 April 2018 12:50 SAST

ARB Holdings Limited (J:ARH) has tumbled 6.4% to trade at ZAR5.30 vs. the Electrical equipment sector which weakened 151.9 points (or 0.5%) to 30,427.5. Representing a weighting of about 5.9% of the sector, the stock accounted for 75.1% of today's loss. The shares have underperformed 83% of the market in the past month.

ARB Holdings Limited (J:ARH; JNB:ARH; SJ:ARH)

ISIN: ZAE000109435

PermID: 4295888583

Source: www.BuySellSignals.com