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These three stocks' earnings are soaring...

by , 24 February 2022
These three stocks' earnings are soaring...
Markets are abuzz with the mess in Ukraine, war is threatening and it could have a massive impact on Europe.

And then there's the oil price that's edging towards $100 again.

But this is all noise. As companies release their results their share prices fly, or fall…

And right now, there are three penny stocks that have released earnings that investors love. Here's what I am talking about…
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If you haven’t already got a copy of my five small cap stocks that could double your money in the next 12-18 months, then you need to get a copy now. 
 
This window of opportunity is closing quickly on these five quality companies that are sitting on massive discounts to their real value, thanks to covid. 
 
But as our economy recovers, so too will these stocks springboard back to their true value and you can reap the benefit if you get invested now.
 
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Merafe’s sales are up – and cash is flooding in
Merafe released a trading statement. The company expects earnings per share of between 62.8c and 70.8c. That’s significant considering the company’s 136c share price!
 
These profits have been driven by two factors.
 
Firstly, the company’s production is up from 2020’s low base.

Secondly, the ferrochrome price is REALLY hot right now, and has been increasing for a year straight.
 
What’s more – the company started 2021 with R278 million in cash on hand. By 31 December 2021 it had R972 million in cash. The company is also debt free, but R189 million of its cash has been ring fenced for rehabilitation funds.
 
That means the company has around 31cps in cash. It could pay a 13cps dividend – amounting to 10% of its share price and still be really cash flush!
 
I expect further upside in the share from here… Currently the share price is up 8.8% for the month and 36% in the past six months.
 
Grindrod’s turnaround is bearing fruit at last
Grindrod’s share price is down 31% in the past 3 years. And the company was particularly hard hit early on in the pandemic.
 
That said, the share price is up 18% in the past month and it is on the back of improving business conditions – and higher profits.
 
In its latest business review Grindrod showed it expects headline earnings per share of 89.9c – 94.3c compared to a 24.8cps loss in 2020.
 
The company’s shown this improvement thanks to its underlying businesses improving their bottom lines.
 
Grindrod’s Maputo Port volumes handled grew 21% to a record 22.3 million tonnes, compared to the year ended 31 December 2020.
 
The Matola dry-bulk terminal handled a record 8.3 million tonnes, up 50% on the prior period, and reported a monthly record volume of one million tonnes in September 2021.
 
The company also announced a strategic partnership with the world’s largest shipping line Maersk – where Grindrod will be responsible for rail and road logistics once Maersk ships unload at ports.
 
The company’s rail business redeployed eight of its ten locomotives at Sierra Leone’s Tonkolili mine following the reopening of the iron ore mine in the region.
 
Lastly – Grindrod bank has been outstanding with the bank more than doubling earnings compared to 2020. The bank’s lending book grew 5% and its deposits increased 20%. It has sufficient liquidity and I expect the company will eventually either sell the bank or list it separately to effectively grow it from here.
 
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What I love most in a Small Cap Stock!
It’s not just the potential 30%, 40% or 100% growth you can find in shares under R10, it’s when you find a quality company trading below its real value, that sits on oodles of cash and pays its shareholders…. BIG Dividends!
 
This is the best kind of stock and right now my colleague, Josh Benton, over at Real Wealth has details on three of the best dividend payers on the JSE right now. 
 
If you haven’t got his Profits and Predictions report yet, then go here now to find out how to claim a copy free of charge!
 
He’s got three fantastic dividend payers that are simply some of the best buys on the JSE right now.
 
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Caxton is still selling at a nearly 50% discount – while profits are up
Caxton used to be a printing and publishing business.
 
But it has become a lot more diversified in the last couple of years. The company also owns online businesses and packaging companies.
 
On 22 February 2022 the company released a trading statement in which it explained it expects a 79.9% - 89.1% increase in headline earnings per share for the half year. That means the company made as much as 69.6cps earnings in six months.
 
It’s share price is currently at 930c. That means on an annualised PE ratio – it sells at a PE of 6.68. Its 2021 financials also showed a net asset value of R17.17 – meaning its current share price is at a discount of 45.8%.
 
The share price is up 47% in the past year, and it paid a 50cps dividend (dividend yield of 5.37%) in 2021.
 
Yet it is still well below its 2017 and 2018 high’s.
 
This is definitely a stock to keep your eyes on – as management can unlock more value from here…


These three stocks' earnings are soaring...
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