By Peet Serfontein & Zimele Mbanjwa
We initiate a long position. Our upside target is set at R164. We recommend a stop-loss at R138.
Remgro is an investment holding company. Their impressive investment portfolio spans across healthcare, consumer products, financial services, infrastructure and industrial. Remgro holds investments, amongst others, in Mediclinic, RCL Foods, OUTsurance, FirstRand and Heineken SA.
Remgro invests in reputable businesses that are aligned with its values and purpose, with sound management teams that have the potential to deliver superior earnings, sustainable cash flow generation, and dividend growth over the long term.
Technically, the price is developing a base (see the grey rectangle on the main chart) signalling a period of consolidation where buyers and sellers are reaching equilibrium before a potential breakout. This phase is crucial in forming a strong foundation for a bull case, as it suggests that selling pressure is diminishing while accumulation is taking place.
The price is also at one of the larger bins when conducting a price distribution bin analysis, meaning it is at a price level where the share has traded frequently over the last 10 years, reinforcing its significance as a key support zone. This price distribution histogram indicates strong price accumulation around the current level, suggesting that buyers are actively defending this area and forming a solid support base.
The price remains above its 200-day simple moving average (SMA) of ~R145 and is using the level as support. Fading downside price momentum, according to the Moving Average Convergence Divergence (MACD) indicator, and the recent sideways trajectory according to the On-balance volume (OBV) indicator also support the trade idea.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R149.
| Share Information | |
|---|---|
| Share Code | REM |
| Industry | Financial Services |
| Market Capital (ZAR) | 83.43 billion |
| One Year Total Return | 5.86% |
| Return Year-to-Date | -5.34% |
| Current Price (ZAR) | 146.81 |
| 52 Week High (ZAR) | 163.85 |
| 52 Week Low (ZAR) | 116.00 |
| Financial Year End | June |
| The share price has been weak year-to-date; however, several technical indicators are pointing to a recovery and upside potential. Expect moderate volatility in the price going forward. | |
| Consensus Expectations (Bloomberg) |
||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 10.08 | 13.44 | 15.30 | 13.78 |
| Growth (%) | 33.30 | 13.84 | -9.90 | |
| Dividend Per Share (ZAR) | 2.64 | 3.04 | 3.36 | 3.67 |
| Growth (%) | 15.27 | 10.42 | 9.17 | |
| Forward PE (times) | 10.93 | 9.60 | 10.65 | |
| Forward Dividend Yield (%) | 2.07 | 2.29 | 2.50 | |
| Current consensus earnings growth forecasts seem unnecessarily bearish in the outer years. We think there is upside risk to medium-term estimates. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long term Fundamental view
| Share Name and Position | CML - BUY (Continue to hold) |
VOD - BUY (Continue to hold) |
APN - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 37.75 | 109.87 | 171.38 |
| Current | 39.93 | 115.84 | 179.04 |
| Movement | +5.8% | +5.4% | +4.5% |
|
The price is at the pivotal point of crossing both the 200-day and 200-week SMA, which remains of interest. The start of upside price momentum supports the idea.
Out take profit target is set at R42 with a trailing stop-loss at R38.25. Time to exit: 19 May 2025. |
The price volume swing remains of interest. Remains above its 200-day SMA. However, it seems like the 200-week SMA acted as major resistance. Fading upside momentum is a concern.
Our profit target is R125, with a trailing stop-loss at R109. Exit the trade around 7 April 2025. |
The price is testing major support, which remains of interest. Remains below its 200-day SMA, and the trade idea is regarded as a counter-trend strategy. Upside momentum is supportive.
Our profit target is R196, with a trailing stop-loss at R169.50. Exit the trade around 26 May 2025. |
| Share Name and Position | GRT - BUY (Continue to hold) |
MRP - Stop Loss (Close the Position) |
LHC - Stop Loss (Close the Position) |
|---|---|---|---|
| Entry | 13.22 | 244.77 | 14.98 |
| Current | 13.30 | 227.58 | 13.62 |
| Movement | +0.6% | -7.0% | -9.1% |
|
The price is trading at one of the highest price bins in its price distribution which remains of interest. Has crossed above its 200-day SMA. The start of upside price momentum supports the trade strategy.
Our profit target is R16, with a trailing stop-loss at R12. Exit the trade around 17 November 2025. |
The share performance has been disappointing and has triggered a stop-loss, leading us to close the position. | The share performance has been disappointing and has triggered a stop-loss, leading us to close the position. |
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