Deep Value Stocks

April 21, 2024
Josh Viljoen
Josh Viljoen

A search for deep value on the JSE


This evening I decided to look for some deep-value shares on the JSE by screening for stocks trading at low valuation multiples whilst still focusing on quality stocks with good profit margins, a strong balance sheet and healthy returns. The specific criteria I used for the search has been listed below.



Gross Profit Margin: > 20%

Operating Profit Margin: > 10%

Net Profit Margin: > 5%


Financial Performance

Return on Invested Capital: > 15%

Return on Assets: > 15%


Financial Position

Debt to Equity Ratio: < 40%

Current Ratio: > 1.5



Price to Sales Ratio: < 5

Price to Earnings Ratio: < 10

Price to Free Cash Flow Ratio: < 15

EV to EBITDA Ratio: < 10


The results may not come as much of a surprise. Of the criteria listed only 5 stocks on the JSE met all the requirements. All five of the stocks identified are mining / resource companies. The companies that met the above criteria are as follows (listed from largest to smallest in terms of market capitalization):


  1. Impala Platinum Holdings
  2. African Rainbow Minerals
  3. Exxaro Resources
  4. Thungela Resources
  5. Tharisa Plc

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