Five Shares: Companies trading at 12-month highs, before and after reporting good results
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IT WAS A big week for corporate earnings and if it weren’t for the uncertainty around the Covid-19 third wave, share prices of some of these companies would almost certainly have been higher.
It was evident from the results released last week, and from the shorter-term prospects in those figures, that an economic recovery of sorts has begun to take hold.
This was not lost to many astute investors, who managed to push the share prices of some of the companies reporting last week to new highs a week before.
One of these was Pepkor Holdings, the value clothing, footwear, homeware, furniture digital appliance and accessories group, which reported strong earnings growth, much reduced debt, and strong cash flow for the six months to March 31.
The group said positive trading momentum had been maintained into the second half with good winter season trade.
Its value fintech offerings has massive scope for growth. Pepkor’s share price reached a new 12-month high of R18.41 a week and a day before the results were released, and then leapt to a new 12-month high on the day of the release last week.
On Friday, morning the share was 0.83 percent higher at R19.55.
The company seems expensive at a price earnings ratio of 28, but there scope for optimism despite a little bit of shade from Steinhoff.
Similarly, Mr Price’s share peaked at a 12-month high of R202.46 on May 19, only to see the price rise even further after the release of its annual results last Thursday, and it was still climbing on Friday, having risen 5.16 percent to R231.85 in the morning.
Mr Price’s fortunes are highly reliant on the state of the economy, and the 20.8 price:earnings ratio accorded to it appear conservative, on a longer-term view.
Its diluted headline earnings shot up by 21.4 percent in the second half of 53 weeks to April 3, with double-digit growth also seen in the homeware and telecoms segments.
Mr Price also reported strong post-year end trade, with retail sales up 27.5 percent from April 4 to May 15, compared with 3.4 percent in the corresponding period in 2019.
Tower Property Fund hit a 12-month high of R3.55 per share on May 20, only to see the share price increase sharply again last week upon the announcement that it was considering a cash, R4 per share take-over offer from RDC Properties, a multinational African property company listed in Botswana.
Tower Property Fund has a R4.5 billion portfolio of retail, industrial and office properties, and derives some 35 percent from assets invested in Croatia, and 31 percent from assets located in Gauteng.
Telkom’s share price hit a new 12-month high of R44.14 two weeks ago, and the price has since last Monday’s release of its annual results to end-March risen even further, with it trading 3.5 percent higher to R48 on Friday morning.
According to management, Telkom reported “robust” results for the year and held healthy cash flows of about R5bn.
Reunert reached a 12-month high on May 21, of R53.72 and on Friday the share price was up 3.25 percent higher to a new 12-month high of R54.33. It reported an 11 percent increase in revenue and a R31m profit versus a R326m loss reported in the year up to March 2020.
Edward West is a senior multimedia journalist at The Business Report