In uncertain times, buy shares at a discount!

In uncertain times, buy shares at a discount!

Buying shares at a significant discount provides some downside protection. Knowing you bought R1 of assets for 79 cents gives you comfort, and one investment holding company is trading at exactly that. 


While investment holding companies typical trade at a discount to their some of the parts value, when these companies sell or distribute assets, the benefit is received at full market value. 


The investment company you should buy today is Remgro. 


It holds 78% of it’s investments in listed companies like, Firstrand, RMI, RMB, Medi-Clinic and Grindrod. 


At R208 you are getting over R251 worth of assets. And the worst performing listed investment Medi-Clinic is bottoming out, with limited downside risk from these levels. 


REM hasn’t been at such attractive valuation levels in a while, it’s 1-year forward PE is 11.3, price to book is also at a new term low of 1.2. And there is a high probability of a special dividend or higher dividends going forward. 


Buy REM below R210 for a move above R250. 


The week ahead: 

  • Local Data:  Manufacturing: Production and Sales (11/09); Retail Trade Sales (12/09); Wholesale and Motor Trade Sales, Mining Production and Sales (13/09) 
  • Results Due: ATT, SVB (11/09); ASC, CLR, COM, MAP, TOR (12/09); APN, JSC, TAW, TRL (13/09); GPL, IMP (14/09) 


Other Economic data releases of interest… 

  • Monday: GDP, Manufacturing Production (UK) 
  • Tuesday: Average Earnings Index (UK) 
  • Wednesday: PPI, Crude Oil Inventories (USA) 
  • Thursday: Unemployment Rate (AUS); Interest Rate (UK); Main Refinancing Rate (EU); Core CPI (USA) 
  • Friday: BOE Gov Carney Speaks (UK); Core Retail Sales (USA) 


Short Term Ideas 

  • GFI: Strong support at R34.00. Long below R35.25, hold for a move back above R40. Target it R43.75 with stop loss of R32.55. 


Long Term Ideas 

  • FSR: Position closed for a 9% gain. 
  • Discovery: Results strong. Up over 20%, keep stop loss at R160.00. 
  • Coronation: Buy below R60.00 for a move back to R80 
  • Dischem: Up 16.2%, target and stop loss remained at R36.50 and R32.00. Hold 
  • Shoprite: A break above R200 is needed to curb further declines. Hold. 
  • Aspen: Results due Thursday morning, buy dips below R260.00. 
  • Sygnia: Support building above R10.00. Add 
  • MTN: Bottoming out above R70, buy below R75.00.  
  • Glencore: Open gain 16.6%. Hold 
  • Naspers: Accumulate below R3,200, price is volatile 
  • Merafe, Jubilee and Wescoal: Will no longer be tracked on this list. Past views remain in place but subject to change without notice. 


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