By Peet Serfontein & Jalpa Bhoolia
Netcare operates the largest private hospital network in South Africa. The group also offers primary healthcare, sub-acute care, day surgery, occupational health and employee wellness services through Medicross, emergency medical services through Netcare 911, renal dialysis through National Renal Care and mental health and psychiatric services through Akeso. Netcare is a leading private trainer of emergency medical and nursing personnel in the country.
Recent financial results have been solid, and the expectation is that steady top-line growth will be complemented by efficiency gains medium term - supporting a strong earnings growth profile.
Technically, a share that is at one of the highest bars in terms of price distribution over the last four years makes for an appealing long position (see the insert on the main chart).
Frequent trading at these levels suggest that the share has managed to withstand selling pressure and avoided significant corrections, underscoring robust fundamentals and positive sentiment. If this price level coincides with favourable macroeconomic conditions, strong earnings reports, or sector-specific tailwinds, the likelihood of a continued breakout to new highs increases.
The price is in the Mark-up phase out of the Wyckoff Price Cycle, further supporting a bullish tone.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R16.30.
| Share Information | |
|---|---|
| Share Code | NTC |
| Industry | Health Care Equipment & Services |
| Market Capital (ZAR) | 21.89 billion |
| One Year Total Return | 17.71% |
| Return Year-to-Date | 13.91% |
| Current Price (ZAR) | 15.44 |
| 52 Week High (ZAR) | 15.77 |
| 52 Week Low (ZAR) | 11.01 |
| Financial Year End | September |
| The share price has made good progress year-to-date, particularly over the past six months. Several technical indicators support further upside momentum in the price. The share remains above its 200-day simple moving average. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 1.12 | 1.35 | 1.55 | 1.92 |
| Growth (%) | 20.45 | 15.20 | 23.75 | |
| Dividend Per Share (ZAR) | 0.65 | 0.85 | 0.98 | 1.20 |
| Growth (%) | 30.15 | 15.96 | 22.32 | |
| Forward PE (times) | 11.45 | 9.94 | 8.03 | |
| Forward Dividend Yield (%) | 5.48 | 6.35 | 7.77 | |
| Solid earnings growth is expected over the forecast horizon, with a relatively attractive dividend yield. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long term fundamental view:
| Share Name and Position | WHL - Time Exit (Close the position) |
TBS BUY - Buy (Continue to hold) |
QLT Buy - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 60.82 | 224.91 | 31.11 |
| Current | 68.16 | 236.53 | 32.59 |
| Movement | +12.1% | +10.8% | +4.8% |
| The stock has reached our time exit date, and we closed the trade. |
A price at major resistance remains of interest. Fading downside price momentum is supportive. Remains above its 200-day simple moving average.
Our profit target is at R260 with a trailing stop-loss at R224.50. Exit the trade on 28 April 2025. |
The price appears to have entered 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 R31.10. Exit the trade on 2 December 2024. |
| Share Name and Position | SHP - Buy (Continue to hold) |
OMU - Buy (Continue to hold) |
CLS - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 292.78 | 12.48 | 388.33 |
| Current | 305.10 | 12.96 | 399.90 |
| Movement | +4.2% | +3.8% | +3.0% |
|
A price in a phase of low volatility remains of interest. Fading downside price momentum is a positive signal. Remains above its 200-day simple moving average.
Our profit target is at R317.00 with a trailing stop-loss at R276.50. Exit the trade on 1 September 2024. |
A price building a base remains of interest. Fading downside price momentum is supportive. Remains above its 200-day simple moving average.
Our profit target is at R14.40 with a trailing stop-loss at R12.20. Exit the trade on 17 December 2024. |
A rectangle pattern remains of interest. Remains above its 200-day simple moving average. The start of upside price movement supports the trade.
Our profit target is at R444 with a trailing stop-loss at R364. Exit the trade on 10 November 2025. |
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