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Loadshedding got you down?

April 21, 2024
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Josh Viljoen
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Josh Viljoen

This JSE small cap is positioned to benefit from loadshedding

 

While load shedding is the dark reality we find ourselves in (pun intended) you may be wondering what companies are positioned to benefit from Eskom's failure. The obvious theme that comes to mind is companies that sell back-up or power storage solutions or companies that provide renewable energy solutions. One company that offers both is Mustek a JSE small-cap ICT company with a measly market cap of R900m.

 

Mustek mainly sells computer hardware products but has an operating segment dedicated to energy solutions. This segment under the Mecer brand provides:

  1.  Solar panels
  2. Invertors (https://mecer.co.za/category/products/power/)
  3. Batteries
  4. Combiner boxes (A PV combiner box is an electrical distribution box where DC breakers are housed. Its main purpose is to combine multiple DC inputs from the panels in the system into a single DC output.)
  5. Mounting structures for solar panels
  6. Cables and connectors for solar panels

 

Mustek shares are currently trading at R15.40 a share. Management have been actively returning capital to shareholders through share buy-backs and dividend payments. They currently have a dividend yield of 7.53% and are trading at a price to earnings ratio of 4.39. 

 

At current valuations I believe there is limited downside risk on the share and should management be able to improve margins in the coming year I expect favorable returns. 

 

 

 

 

 

 

 


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