By Peet Serfontein & Jalpa Bhoolia
Growthpoint Properties is the largest listed property company in South Africa by market capitalisation and assets. Growthpoint has retail, office and industrial properties in its portfolio including the V&A Waterfront in Cape Town.
The company is a compelling choice for investors seeking stable income through dividends and exposure to the property sector. The sector has seen strong gains off a depressed base recently and is expected to benefit from lower interest rates, lower inflation and improved confidence, complemented by lower bond yields
In technical terms, the stock is trading in one of its highest price bins, which indicates an increase in activity around these levels (see the insert on the main chart).
The share is in the accumulation phase of the Wyckoff Price Cycle which supports a bullish tone. In this phase, the share typically moves within a horizontal or slightly upward-sloping range. As the Accumulation phase progresses, demand begins to exceed supply and the imbalance triggers the start of the Markup phase, characterised by a sustained uptrend. In later stages, the price may form higher lows, indicating strengthening demand, and a breakout above the resistance level of the trading range confirms the transition and signals the beginning of a bullish trend.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R405.
Share Information
| Share Code | GRT SJ |
|---|---|
| Industry | Real Estate |
| Market Capital (ZAR) | 45.84 billion |
| One Year Total Return | 43.59% |
| Return Year-to-Date | 25.77% |
| Current Price (ZAR) | 13.36 |
| 52 Week High (ZAR) | 14.75 |
| 52 Week Low (ZAR) | 10.05 |
| Financial Year End | June |
| The share price has made healthy progress year-to-date, with renewed upside expected after a recent pullback. The share remains above its 200-day simple moving average. | |
Consensus expectations
(Bloomberg)
| FY24 | FY25E | FY26E | FY27E | |
|---|---|---|---|---|
| Headline Earnings per Share (ZAR) | 1.42 | 1.39 | 1.43 | 1.49 |
| Growth (%) | -2.043 | 2.81 | 4.34 | |
| Dividend Per Share (ZAR) | 1.17 | 1.15 | 1.18 | 1.23 |
| Growth (%) | -1.88 | 2.52 | 4.75 | |
| Forward PE (times) | 9.61 | 9.35 | 8.96 | |
| Forward Dividend Yield (%) | 8.60 | 8.82 | 9.24 | |
| Earnings are expected to be weaker over the short term but is expected to improve over the forecast horizon. The dividend yield remains attractive | ||||
Buy/Sell Rationale
Technical Analysis:
Fundamental view:
| Share Name and Position | NRP - Stop Loss (Close the position) |
WHL - BUY (Continue to hold) |
QLT - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 143.72 | 60.82 | 31.11 |
| Current | 136.74 | 67.02 | 32.91 |
| Movement | -4.9% | +10.2% | +5.8% |
| The share hit our stop-loss level, prompting us to close the position. |
A price building a base remains of interest. Upside price momentum is encouraging. Remains above its 200-day simple moving average.
Our profit target is at R71 with a trailing stop-loss at R63. Exit the trade on 25 November 2024 |
The price appears to be entering the fifth wave of the Elliott Wave Price analysis. Downward momentum is concerning. Remains above its 200-day simple moving average.
Our profit target is at R35 with a trailing stop-loss at R29.50. Exit the trade on 2 December 2024. |
| Share Name and Position | TBS - BUY (Continue to hold) |
SHP - Buy (Continue to hold) |
OMU - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 224.91 | 292.78 | 12.48 |
| Current | 236.53 | 301.55 | 12.82 |
| Movement | +5.2% | +3% | +2.7% |
|
A price at major resistance remains of interest. Downside price momentum is a concern. Remains above its 200-day simple moving average.
Our profit target is at R260 with a trailing stop-loss at R211.70. Exit the trade on 28 April 2025. |
A price that in a phase of low volatility remains of interest. Downside price momentum is concerning. Remains above its 200-day simple moving average
Our profit target is at R317.00 with a trailing stop-loss at R273. Exit the trade on 1 September 2024. |
A price building a base remains of interest. Fading downside price momentum is a positive. Remains above its 200-day simple moving average.
Our profit target is at R14.40 with a trailing stop-loss at R12. Exit the trade on 17 December 2024. |
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