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Was it worth investing your money in Netcare shares 10 years ago? - The answer may surprise you

by , 25 May 2021
Was it worth investing your money in Netcare shares 10 years ago? - The answer may surprise you
An ex executive director of Netcare (who retired 10 years ago), reached out to me the other day.

He was curious to hear my take on the health company as a shareholder.

In short, he asked me to do an analysis over the last 10 years to see if it was more profitable to invest in Netcare shares or invest in a high interest savings bank.

In this article, I'm going to give you a breakdown on how I did the analysis.

This is so you can apply it to your analyses on any other kind of share and to see where to find your next best investments…

Let's get to it…

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10 years of investing in a high interest savings account
 
Let’s say you had R100,000 you wanted to invest.
 
You decide to deposit that money in a fixed savings account with a 5% return per year.
 
You leave it there over the next 10 years, to compound and grow…Here’s how much money you would have made:
 
In the first year you would have made R5,000. (R100,000 X 5%).
 
In the second year, you would have made 5% of R105,000 (which is using the previous return on your initial portfolio).
 
This means you would have grown your account to R110,250 (R105,000 X 5%).
 
You have the idea, let’s see what your account balance would look like in 2021…
 
 
 
In 10 years, you would have grown your account 62.89%, to R162,889.46.
 
And if you include inflation and the time spent holding onto it, with the value of prices going up, we could agree that this is definitely not a worthwhile investment…
 
Next, let’s move onto if we invested the same R100,000 into Netcare shares instead.
 
Would you have made a good income investing in Netcare 10 years ago?
 
Let’s say you had another R100,000. And you wanted to buy Netcare shares.
 
In 2011, the share price was at R13.37.
 
This means, you would have bought just under 7,480 shares.
 
After the first year, the share price rallied to R19.65. Also, the Dividend per share was at around R0.65.
 
This means your portfolio would now be worth R151,844 (R146,982 + R4,862 worth of dividends).
 
That’s a 51.84% growth on your portfolio in just one year. Not too shabby!
 
However, an open investment does not guarantee a closed profit.
 
We still need to consider the next nine years.
 
Let’s see what your account balance would look like in 2021…


 
The portfolio was climbing very nicely for the first few years.
 
In fact, at its peak in 2014 it was up to R289,102 at a stage…
 
That’s a very decent 189.08% return in just three years.
 
But then things turned sour and has been until 2021.
 
In fact, in 2020, your portfolio would have been in the red and under R100,000. This is where the share price dropped to R12.50.
 
If you held your R100,000 portfolio from 2011 ‘till 2021, today it will be up only R12,200 in profits or 12.19%.
 
It pains me to say this but… It was better to invest your money in a high interest savings account rather than Netcare shares.
 
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364 investors exposed to a 109.89% gain
– Were you one of them?
  
One month ago, one of our analysts released a time-sensitive "strong buy" recommendation to a few lucky subscribers. He believed the market was going to start strengthening and that his tip would give readers the opportunity to profit immensely from this movement.
 
Boy was he right!
 
In a matter of a few short days, his tip hit its target – producing a phenomenal 109.89% for the lucky few who got in.
 
Sadly, you may not have been one of them. Ensure you don’t get left behind on his next great tip…
 
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So is investing in the stock market dead?
 
Most definitely not!
 
We have only covered one share today. This does not mean all of the shares on the JSE have dropped in the last 11 years.
 
For example, if you invested your R100,000 in Clicks 10 years ago with a share price at R44.12 and you held it until today at R265.00.
 
You would have grown your portfolio to a R604,200 gain… That’s an insane 504% return.
 
However, I will say this, investing requires a lot more time when it comes to research, finding strong growth prospects and pinpointing which are the best stocks to buy.
 
And we don’t always have the time to look and research these companies…
 
That’s why we need experts and investment analysts like Joshua Benton for South African Investor And Real Wealth and Francois Joubert for Red Hot Penny Shares to do the hard work, put in the hours find the top companies to invest in…
 
Joshua has managed to achieve triple digit gains from stocks like…
 
ServineNow for 103.21%
 
Autodesk for 103.52%
 
Clicks for 104.36%
 
And Francois has also managed to achieve triple digit gains from penny stocks like…
 
Jubilee 342.86%
 
MPact 179.78%
 
Adapt IT 142.42% in just six months!
 
I’ll stick to the short term profits from trading with my Red Hot Storm Trader and I recommend you let the experts find the long term profit opportunities.
  
Trade well, 
 
Timon Rossolimos,
Chief Strategist, Red Hot Storm Trader  


Was it worth investing your money in Netcare shares 10 years ago? - The answer may surprise you
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