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OCTOBER PORTFOLIO MOVES

July 17, 2023
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A conversational piece. These are my personal views and thoughts. Always do your own due diligence!


With the Rand weakening at the speed of light, I am being strategic in adding to my JSE portfolio over the next few weeks.

 

I have not added any new stocks to my portfolio. I have been using Technical Analysis to find suitable entries for my long-term investments.

 

I have put significant focus on undervalued dividend stocks and growth stocks I believe will do well when the markets start playing nice again (bulls take over).

 

Renergen (REN) (Dividend Yield = 0%)

We are currently awaiting the REN 31 August 2022 results from the company. I do not believe we will see anything we do not know already in the numbers. Revenue will still be non-existent. REN only started production in September 2022.

 

As per the 30 September 2022 Quarterly Report The Virginia Gas Project commenced production of the countrys first commercial LNG on 5 September 2022, and from 19 September 2022 the plant began operating 24-hour shifts. During the quarter under review, ending 31 August 2022, there were no substantive production activities.

 

Discovery (DSY) (Dividend Yield = 0%)

I have been an investor in Discovery for over a decade. The fundamentals are as solid as they come (for my risk tolerance). I am adding on TA only. DSY is trading near 52-week lows. So I am buying and forgetting. Dividends will return (Adrian Gore, I am talking to you).

 

Kumba (KIO) (Dividend Yield = 15.9%)

For those who dont know, KIO is immensely affected by slow growth in China. China has been slowing down in terms of GDP growth expectations. A third term was announced yesterday for President Xi, who was responsible for these problems in the first place and the markets punished Chinese companies listed in the USA.

 

If the iron ore cannot get to the ports to be exported, then KIO suffers immeasurably. Welcome to the room now, Transnet. Generally useless, but declaring force majeure in 2022, did more harm than good.

 

KIO is trading near 52-week lows too. This is mostly a dividend play for me, even though KIO stock price has some decent runway and add to that a balance sheet with zero debt.

 

MTN (Dividend Yield = 2.6%)

There is currently a battle going on between RAIN and MTN and only they know why they want Telkom. We can only speculate. Biggest news out of MTN is them abandoning their plans to buy Telkom citing the negotiations lacked trust. MTN said the parties were unable to reach an agreement to their mutual satisfaction on the process going forward.

 

Telkom said MTN terminated discussions because it (Telkom) was not in a position to provide the company with assurances around exclusivity. Tensions between the companies became apparent on September 30 in a stock exchange announcement by MTN after Telkom informed shareholders that it had received a non-binding proposal from Rain. MTN said after the announcement it sent a letter to Telkom  and the company received a response advising that (Telkom) will respond to the MTN letter more fully in due course.

 

(Above paragraph from Business Day)

 

REDEFINE (RDF) (Dividend Yield = 21%)

Just feeding my future dividends here. RDF share price has not fully recovered from the Covid crash of 2022. Be cognisant of the debt of the business. Loan to Value (LTV) should be below 40%. LTV measures the ratio of a companys debt and its assets. SA fund managers prefer property companies LTVs not to exceed the 35%-40% range. If interest rates keep increasing and debt levels remain high, the company might need to raise equity, diluting current shareholders. Understand the risk attached to the dividend.

 

VUKILE (VKE) (Dividend Yield = 7.9%)

Vukile has been very good to me the past 2 years. Have been scooping it up since the 2020 crash. The share price still has some runway, but it is also expanding its moat.

 

https://www.businesslive.co.za/bd/companies/property/2022-10-09-vukile-invests-r9m-to-develop-emerging-retailers-at-its-malls/

 


 


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