South African stock alert

SAFR

CLOSING UPDATE: Shoprite Holdings drops further 2.5%, led Food & drug retailers sector lower 20 September 2018 18:59 SAST

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).

Shoprite Holdings, South Africa's largest food & drug retailers company by market capitalisation, has dropped 3.8% to trade at ZAR187.67 vs. the Food & drug retailers sector which weakened 2,337.3 points (or 1.8%) to 130,659.8. Representing a weighting of about 48.6% of the sector, the stock accounted for the loss. The shares have underperformed 92% of the market in the past month. Trading volume was 2.7 times average at the end of the day. Compared with the FTSE/JSE- Africa Top 40 Index which rose 125.2 points (or 0.2%) in the day, this represented a relative price change of -3.9%.

Technical indicators complementing today's significant downtrend:

+ The negative 5.86 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 12 for 6 months, 10 for 3 months and 8 for 1 month.

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

+ The price dropped 3.2% in the last week and plummeted 11.4% in the last month.

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

Overvaluation:

+ Price/Sales of 0.8 [0.6]

+ Return on Equity 19.7% [23.0%]

Other Bearish Signals include:

+ Net profit margin has averaged 3.8% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

+ As per the Du Pont analysis, Return on Equity of 19.7% is lower than sector average of 23.0%.

Note

Bullish Signals:

Interest cover is less leveraged at 23.4 times.

Total Liabilities/EBITDA of 4.8 is less than the Joseph Piotroski benchmark of <5.

Tobin's Q Ratio is 2. Compared with the rest of the market the stock is undervalued.

Oversold/Bullish:

The 0.8% premium to 12-month low of ZAR186.28 against the 33.4% discount to high of ZAR281.90 suggests the decline might be bottoming.

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

Undervaluation:

Price/Earnings of 18.8 [23.4]

Price to Book of 4.4 [6.6]

Return on Assets 9.8% [8.6%]

TODAY'S ALERTS

Afternoon Alert: Shoprite Holdings decreases 1.3%, leads Food & drug retailers sector lower

20 September 2018 12:51 SAST

Shoprite Holdings Limited (J:SHP) has decreased 1.3% to trade at ZAR192.44 vs. the Food & drug retailers sector which weakened 241.0 points (or 0.2%) to 132,756.1. Representing a weighting of about 49.1% of the sector, the stock accounted for the loss. The shares have underperformed 90% of the market in the past month. Trading volume was 5.7 times average so far today.

Morning Alert: Shoprite Holdings decreases 1.4%, leads Food & drug retailers sector lower

20 September 2018 10:51 SAST

Shoprite Holdings Limited (J:SHP) has decreased 1.4% to trade at ZAR192.33 vs. the Food & drug retailers sector which weakened 328.4 points (or 0.2%) to 132,668.7. Representing a weighting of about 49.1% of the sector, the stock accounted for the loss. The shares have underperformed 90% of the market in the past month. Trading volume was 1.8 times average so far today.

Shoprite Holdings Limited (J:SHP; JNB:SHP; SJ:SHP)

ISIN: ZAE000012084

PermID: 4295888469

Source: www.BuySellSignals.com