South African stock alert

SAFR

Morning Alert: PSG Group in 2nd consecutive rise, nears two-month high 18 October 2017 10:50 SAST

NEWS BITES - AFRICA

PSG Group Limited (J:PSG) extended its gains Wednesday, rising an additional 39.78c (or 0.2%) to trade at ZAR259.65. The stock increased 0.37% on Tuesday bringing its 2-day rise to 0.5%. It is now approaching its 49-day high of ZAR261.0.

SECTION 1: The past week

Current indications of bullish signals that support the trend in the unusual trading

1.1 At a glance

Weekly: PSG Group jumps 9.9% in 2 weeks; nears two-month high October 17, 2017 17:00 SAST

PSG Group Limited (J:PSG), South Africa's 2nd largest Investment company company by market cap, traded near it's two-month high. It lifted ZAR12.55 (or 5.1%) in the past week to close at ZAR259.25. The stock jumped for a second week recording a rise of ZAR23.39 (or 9.9%) in the past two weeks. Compared with the FTSE/JSE- Africa Top 40 Index which rose 1,370.2 points (or 2.7%) in the two weeks, this represented a relative price increase of 7.2%. The volume was 0.7 times average trading per week of 1.6 million shares. In the past week the market cap has risen ZAR2.9 billion.

1.2 5-day Recap

PSG Group outperformed the FTSE/JSE: AFRICA TOP 40 index in 3 out of 5 days.

DayHeadlineClose price [ZAR]Price change %Relative change %Comment
TuesdayPSG Group hits two-month high259.250.40.8
WednesdayPSG Group up 7.0% in 2 days259.895.35.2Top Rise

Note

DayHeadlineClose price [ZAR]Price change %Relative change %Comment
MondayPSG Group falls for a third consecutive day, a three-day fall of 0.6%258.3-0.4-0.9Steepest Fall
FridayPSG Group falls for a second consecutive day, a two-day fall of 0.2%259.25-0.1-0.3
ThursdayPSG Group decreases after hitting resistance259.5-0.20.02

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

Undervaluation:

Return on Equity 26.8% [15.0%]

Overvaluation:

Dividend yield of 1.2% [1.9%]

Return on Assets 1.1% [2.5%]

SECTION 2: Ranking

DescriptionValueRank In Market
MCap $US billion4.5In Top Quartile
Today's Volatility %0.8In Top Quartile
Price/MAP2001.06In Top Quartile
52-week Range (in ZAR)192.7-277.7
1-month Range (in ZAR)232.8-261.0
RSI82.6Bearish

SECTION 3: Earnings

FY2017 Annual Report: PSG Group Net Profit up 66%

PSG Group (J:PSG) reported net profit for the year-ended 28 February 2017 of ZAR487m ($US37.1m), up 66.2% from ZAR293m ($US18.1m) in the previous year.

Major changes compared with previous year:

Favourable Changes:

- Net profit up 66.2% from ZAR292.9m ($US18.1m) to ZAR486.9m ($US37.1m)

- Total revenue up 40% from ZAR3.5b ($US217.0m) to ZAR4.9b ($US374.7m)

- Interest cover up 41.9% from 7.9 to 11.2

- Sales and marketing expenses to Sales down from 30.7% to 25.8%

- Interest expenses to Sales down from 2.6% to 1.5%

- Retained earnings to total assets up from 1.6% to 1.8%

- Long-term investments to Total Assets up from 86.1% to 90.9%

Unfavourable Changes:

- EBIT Margin down from 20.7% to 16.5%

- EBIT to total assets down from 1.8% to 1.7%

- Profit before tax to Sales down from 18% to 15%

- Current Debtors to Total Assets down from 7.4% to 3.5%

- Other non-current assets to Total Assets down from 0.4% to 0.2%

- Total Liabilities to EBITDA of 61.4 compares unfavourably with the Joseph Piotroski benchmark of less than 5. This ratio has deteriorated by 8.1% from the previous year's ratio of 56.8.

Note:

- Tax expenses to Sales down from 8.8% to 4.1%

- Intangibles to Total Assets down from 2.2% to 2.1%

- Future income tax benefit to Total Assets steady at 0.2%

SECTION 4: Recent News of PSG Group

October 17: PSG Group announces dividend

PSG Group today announced an interim dividend of ZAR1.10 per share. The record date is Tuesday, October 31, 2017 and it is payable on Monday, November 06.

October 06: Psg Group Limited - Trading Statement

SUM-OF-THE-PARTS ("SOTP") VALUE AND RECURRING HEADLINE EARNINGS

PSG, an investment holding company, continues to use the SOTP value and recurring headline earnings per share benchmarks to provide management and investors with a realistic and transparent way of evaluating PSG's performance.

PSG's SOTP value is calculated using the quoted market prices for all JSE-listed investments, and market-related valuations for unlisted investments.

PSG's recurring headline earnings is the sum of its effective interest in that of each of its underlying investments.

October 05: PSG Group appoints Non-Executive Director

PSG Group has appointed Ben la Grange as Non-Executive Director. The effective date is Thursday, October 05.

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

ISIN: ZAE000013017

PermID: 4295888970

Source: www.BuySellSignals.com