Anglo American Platinum (Amplats) is one of the leading primary producers of platinum group metals in the world, with its production accounting for a large proportion of the world's newly mined platinum. The group operates across the entire value chain to produce a complete range of PGMs including platinum, palladium, rhodium, iridium, ruthenium, and osmium, with different sites dedicated to each stage. Its mining, smelting and refining operations are based mostly in South Africa.
Technically, a price below the linear regression channel pattern makes the share an attractive investment opportunity (see the insert on the main chart).
A linear regression channel pattern is formed by plotting a trendline using the linear regression of a share's closing prices, and then drawing parallel lines above and below the trendline. The upper parallel line is drawn by connecting the highest highs of the price, while the lower parallel line is drawn by connecting the lowest lows.
When the price is below the lower boundary of the channel, it is considered oversold, and it is expected that the price could revert towards the centre of the channel (being the trendline).
According to the RSI (Relative Strength Index), the stock will be overbought at ~R2 140. This classifies our profit target of R1 280 as realistic.
We suggest a medium capital at-risk allocation to this trade.
Share Information
| Share code | AMS |
|---|---|
| Industry | Precious metals and mining |
| Market capatalisation (ZAR) | 262.44 billion |
| One year total return | -45.02% |
| Return year-to-date | -28.23% |
| Current price(ZAR) | 989.23 |
| 52 weeek high(ZAR) | 2 007.95 |
| 52 week low(ZAR) | 923.03 |
| Financial year end | December |
| Closing paragraph | Year-to-date performance provides a good entry point. Expect high volatility in the price. |
Consensus Expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (ZAR) | 185.22 | 148.91 | 134.50 | 118.82 |
| Growth (%) | -19.60 | -9.67 | -11.66 | |
| Dividend Per Share (ZAR) | 75.00 | 86.18 | 78.50 | 58.73 |
| Growth (%) | 14.90 | -8.90 | -25.18 | |
| Forward PE (times) | 6.64 | 7.35 | 8.33 | |
| Forward Dividend Yield (%) | 8.71 | 7.94 | 5.94 | |
| Closing paragraph | While earnings are expected to come under pressure over the forecast period, the stock offers a very attractive dividend yield. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
TFG - BUY (Continue to Hold) |
BAW - BUY (Continue to Hold) |
MNP - Profit take (Continue to Hold) |
|---|---|---|---|
| Entry | 83.54 | 85.56 | 284.46 |
| Current | 100.50 | 90.00 | 291.93 |
| Movement | 20.3% | 5.2% | 2.6% |
| Summary text |
The share is still trading below its 200-day simple moving average. However, fading downside price momentum supports the predominant trend.
Our take profit target is set at R132, with a trailing stop-loss at R82. Time exit: 8 July 2024. |
The share price is testing its 200-day simple moving average. Upside price momentum supports the predominant trend.
Our take profit target remains at R104, with a trailing stop-loss at R82.35. Time exit: 3 July 2023. |
The price remains close to key support and is testing its 200-day simple moving average. The bullish trend is reinforced by a decline in negative price momentum.
Take profit target set at R328, with a trailing stop-loss at R273. Time exit: 22 May 2023. |
| Share Name and position |
LHC - Buy (Continue to Hold) |
VOD - Buy (Continue to hold) |
OMU - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 19.30 | 126.50 | 11.67 |
| Current | 19.28 | 125.36 | 11.89 |
| Movement | -0.1% | -0.9% | -1.2% |
| Summary text |
The price is worth monitoring as it is still near a major support level. The share is trading above its 200-day simple moving average.
Take profit target set at R22.20, with a trailing stop-loss at R18.05. Time exit: 26 June 2023. |
The price is hovering near a significant support level and is testing its 200-day simple moving average.
Take profit target set at R144, with a trailing stop-loss at R120. Time exit: 1 May 2023. |
The price seems to be at the beginning of wave 3 of an Elliot wave analysis. The share is testing its 200-day simple moving average.
Take profit target is R16, with a trailing stop-loss at R10. Time exit: 17 November 2023. |
