Altron: Reorganisation may sustain gains

Allied Electronics, the South African stock which ended a six-week losing streak, can sustain gains provided it pulls off a reorganisation, according to Avior Capital Markets. The company, known as Altron, with interests from electronics to power cables, is in talks to sell its cellphone subscription base as part to get rid of loss-making units and streamline operations. Craig Venter, whose father Bill founded Altron in 1965, is to step down as chief executive at the end of this month to allow the company to move to an independent management structure from a family owned business. “They’re writing off a lot of business; there’s a lot of upside, but it comes with a lot of risk,” Roelof Brand, an analyst at Avior, said. “They’re restructuring the management structures, getting some fresh faces in, so hopefully that will reinvigorate them.” Altron was up 1.29 percent at R11.75 a share at the close on the JSE on Friday, valuing the company at R4.41 billion. The stock has declined 24 percent this year, reaching an 11-year low in early April, at the same time Altron’s 14-day relative strength index fell below the 30 level that some analysts use as indicator for when a stock is oversold. – Bloomberg