Bottom fishing with Wescoal
Wescoal's share price has pulled back all the way to levels last seen in 2016. The company recently announced a change of the guard as it appointed Reginald Demana, a Nedbank Capital resources banker, from 1 April. This follows the sudden departure of Waheed Sulaiman in January.
WSL share price is also depressed as small and mid-cap stocks remain out of favour, mostly due to these companies being tied to the health of the SA economy.
Eskom buys up 50% of all the coal Wescoal produces and that shouldn't change thanks to it's strong BEE position, even though its not a requirement to supply Eskom.
A look at the numbers…
Wescoal is on a PE below 4, with a dividend yield of over 4. In its previous Sep 2018 results, the net asset value was R2.57 and earnings per share was 25.2 for the half year. If it matches that performance, it will be on a PE below 3. Debt levels have also decreased slightly and remain manageable.
Buy WSL at R1.50 with a target of R2.50
Your Secret Roadmap to Retiring in Modern-Day South Africa
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This is especially true when it comes to business and finance.
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Futures Closeout Tomorrow
Future Closeout tomorrow should be well bid as the market breaks up into its September 2017 to September 2018 trading channel.
With all the negativity, it’s a welcome relief to investors that have been despondently waiting for things to improve in their portfolios.
If the market maintains these levels without selling off lower, we should see momentum push the market towards the 2018 highs.
It’s important for investors who have been sitting on cash to deploy it when the market has pullbacks.
The week ahead:
• Local Data: CPI, Retail, Motor and Wholesale Trade sales (20/03)
• Results Due: AEY, ALH, SFN (19/03); KDV, SOH, TRL (20/03); GTC, SNH (21/03); BUC (22/03)
• Ex Div (19/03): ANG, BCF, BID, BTI, BVT, COM, CSB, DGH, HMN, HYP, IPL, JSE, MTH, SNT, TWR