May is traditionally a transitional month for the JSE, often marked by mixed performances and a cautious investment climate. The well-known adage "Sell in May and go away" tends to influence global sentiment, particularly as US markets slow down for the summer holiday period, leading to reduced trading volumes and increased volatility across emerging markets like South Africa. Historically, the JSE All Share Index has delivered muted returns in May, as investors move their focus to earnings revisions and global monetary policy signals. This year has been further complicated by persistent political uncertainty ahead of South Africa’s general elections and ongoing reactions to shifting US interest rate policy. However, select JSE-listed companies continue to demonstrate resilience and upside potential through strong fundamentals, sector-specific drivers, and disciplined capital management.
Truworths (TRU) presents a potential investment case for May 2025, supported by disciplined cost control and high cash generation. Despite a 1.1% decline in South African retail sales for Q1 2025, online sales increased by 38%, and trading space expanded by 1.2%, all while operating expenses declined. These efficiencies helped drive the company from net debt to a R1.2 billion net cash position and enabled an interim dividend of R3.17. With inflation easing, lower interest rates, and a strong base of 3.6 million active credit customers, Truworths is positioned to benefit from improving consumer conditions. The rollout of a new R1 billion distribution centre is expected to enhance fulfilment and inventory control. Investors seeking exposure to resilient South African retail shares with attractive dividends and long-term growth potential should consider TRU at its current levels. It has the potential to increase to R83.26 – a 11.2% increase.
South32 (S32) declared an interim dividend of R0.64 per share in the first half of 2025, reflecting its commitment to shareholder returns. Analysts have set a 12-month price target averaging R45.54, a 44% increase, suggesting a potential upside from current levels. South32's diversified portfolio, including aluminum, manganese, and silver, will help it profit from global industrial demand. Investors seeking exposure to stable dividend-paying shares with growth potential in the resources sector should look out for South32 as a potential addition to their portfolios.
City Lodge’s (CLH) earnings report ending December 2024 had a 2% increase in total revenue to R1.02 billion, driven by a 10% rise in average room rates. Earnings per share improved to R0.22 from R0.19 in the previous year. The company declared an interim dividend of R0.06 per share. City Lodge is investing in refurbishments across multiple properties, including the V&A Waterfront and Umhlanga Ridge, with a planned capital expenditure of R200 million over the next six months. The sale of the City Lodge Hotel Sandton for R68 million is expected to fund share buybacks, enhancing shareholder value. The share price has a potential 10.8% increase, to trade at R4.09.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
