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Buy Naspers before the smart money piles in

by , 19 November 2019
Buy Naspers before the smart money piles in
Naspers result are due on Thursday and we should see buyers push the share price higher into year end.

Yesterday's trading update provided some insight into what to expect as it highlighted core earnings from continuing operations will increase between 7% and 10%.

Last week Tencent released results, and while it didn't excite traders and investors, it highlighted that a maturing business can still grow steadily with the right management and vision.

Tencent delivered improved sales and non-IFRS trading profit over 20%. Management highlighted the longer-term growth prospects of the company's mobile and offshore gaming businesses.

Over the next 12 months there should be a major improvement in profitability. Tencent is currently trading on a forward PE of 24.9.
What does this mean for Naspers? And why buy Naspers instead of Prosus?
 
Nasper’s discount has widened since unbundling Prosus. Over the medium to long term, it should narrow as investors looking for a better entry into the offshore assets favour the wider discounted Naspers.
  
There is also a proposal for Prosus’ weighting in the JSE indices to be adjusted lower, which will see index “hugging” asset managers and tracker funds sell down their exposure.
 
Active asset managers will use this to their client’s advantage and reduce their exposure to Prosus in favour of Naspers ahead of the implementation.
  
Buy Naspers below R2,200, before the discount narrows.
 
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Local: CPI (20/11); Interest Rate (21/11)
 
Local Results Due: Coronation, Netcare, Rhodes Foods, Transaction Capital, Tsogo Sun (19/11), Dipula, Lewis, PPC, Reunert, Stor-age (20/11); Investec, Mr Price, Tiger (21/11); Life Healthcare, Naspers, Stenprop (22/11)
 
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Buy Naspers before the smart money piles in
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