Don't ignore MTN
MTN will deliver half year financial results to the market on Thursday 6 August. This is another company that has been overlooked by the market, MTN has already announced that the Headline earnings will increase by about 120%.
The company's earnings are coming off a low base, but these results should show that it has successfully operating during the lockdown. It should benefit from the work-from-home environment, which makes it very attractive for the medium term.
Although they have skipped the interim dividend, cash flows remain strong and there should be sufficient funds to resume paying dividends at year end and it is on an undemanding forward PE of 7.3x.
MTN Africa operations continue to perform well and the recovery in the oil price bodes well for their operations in Nigeria and Iran.
The recent pull back from R66 to R57 presents an excellent opportunity to pick-up shares in the mid R50's.
To be positioned to benefit from the results announcement, add MTN to your portfolio before Thursday for an expected run to R75.
Discover: 103% gains on the table for savvy investors, thanks to this 15 June announcement. Here’s why…
Recent Ideas Update…
Short the Top40 future above 52,000
Sellers continue to rush in and sell rallies above 52,000. Currently we’re in profit at 51,628, buyers are defending 51,000 but we should see risk off sentiment driving the market lower.
Keep your stop loss and take profit levels the same, we could have spikes through a lower stop loss level as the trend reverses and moves lower.
TFG Rights issue, price remains above break even…
TFG’s share price has remained above the R64.00 level we indicated traders should short above. We will continue to hold this short waiting for a retracement below R60.00. If you haven’t got in yet, short TFG above R64.00 and read last week’s article on the rights issue
Longer term value opportunities
Our recent buys in EOH, BLU and DGH are still at below the entry levels suggested last week. We see these as good longer-term value plays for a portfolio.
Here’s the entry levels…
Buy Blue Label below R3
Buy EOH below R5.50
Buy Distell below R77.50
See you next week.
Contributing Editor, Money Morning