February 2025: Key Trends and Opportunities for Investors
In February, investors should brace for a period of recalibration as the market transitions from the festive rally into a phase marked by cautious sentiment and moderate volatility. Historical trends indicate that market participants closely scrutinise corporate earnings updates, economic data releases, and policy signals after the year-end surge, both domestically and globally. This makes February an ideal time for strategic rebalancing. Investors should remain vigilant for liquidity and momentum shifts that could impact short-term trading dynamics.
Here are the top three JSE investment ideas for February:
WeBuyCars (WBC) has been performing well since launching in April 2024 due to its strong market position, innovative technology, and strategic expansion plans. With a 10% - 12% share of the local used car market, WBC has built a dominant brand using AI-driven pricing models, a large e-commerce platform, and a rapidly growing physical footprint. The company has expanded its capacity, allowing it to offer a wider range of vehicles, including commercial and leisure models, further diversifying its revenue streams. Its finance and insurance (F&I) penetration has grown from 14% to 21% over five years, supporting net margins, while partnerships with major finance houses like Capitec and OUTsurance help with customer affordability. The share has an upside potential of 11% from the current level to trade at R47.65.
Telkom (TKG) presents a good investment opportunity, driven by its data-based decision-making strategy, financial discipline, and ongoing digital transformation. The company reported a solid operational performance for the first half of 2025. Mobile data revenue grew 12.7% and fibre data 15.5%, reflecting strong demand for connectivity services. Its mobile division has seen prepaid subscribers grow 29.1%, contributing to an expanding customer base. The company has also been enhancing network coverage with high 4G and 5G networks, ensuring its infrastructure supports future growth. With a focus on monetising infrastructure assets and disciplined capital allocation, Telkom is positioned for continued growth, making it an attractive option for investors seeking exposure to South Africa’s telecom sector. The share price has the potential to increase 8% from the current level to trade at R36.80.
Pepkor (PPH) had strong performance and strategic growth initiatives in the three months ending December 2024. The company posted a remarkable 12.1% increase in total group revenue, reaching R26.7 billion, driven by strong sales across its retail and rapidly expanding fintech divisions. Its financial services division increased 65.7% to R1.6 billion, supported by an impressive activation of 299 000 new A+ retail credit accounts, bringing the total to 3 million. Additionally, the FoneYam smartphone rental has significantly boosted its active customer base to 1.2 million, with monthly activations hitting 180 000 devices. The convergence of retail and fintech innovation presents an interesting potential investment opportunity, with the share price potentially climbing 9% from the current level to trade at R29.30.
Disclaimer:
*Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi
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