September! A month often associated with seasonal shifts in market behaviour. Historically, this time of year has seen cyclical patterns of increased volatility and sector rotation as investors rebalance their portfolios following the summer months. The past few years saw new trends fueled by inflation, rising interest rates, and geopolitical tensions moving markets. In this analysis, we will explore the performance and potential outlook for three stocks likely to be influenced by these factors.
Netcare (NTC), one of the biggest healthcare providers in South Africa, remains confident that its 10-year strategy to transform healthcare delivery will not only stay on track but also position the company to play a crucial role in future healthcare. The company highlighted that while there are fundamental weaknesses in the NHI bill and likely delays in its implementation, Netcare’s commitment to addressing healthcare inequities aligns with long-term industry goals. Its recent financial performance, with revenue up 4.3% to R12.03 billion and operating profit climbing 8.7%, reflects a focus on efficiency. The share price surged 19.44% in the third quarter of 2024 to trade at R13.40, which presents a potential upward movement to trade at R14.27 and an 8.24% increase.
According to analysts, South Africa’s listed property sector has outperformed bonds, equities, and cash in 2024. It has earned a 14.4% return compared to bonds at 9.8%, equities at 10%, and cash at 4.9%. Equites Property Fund (EQU) has consistently demonstrated strong financial performances, driven by its strategic focus on high-quality industrial and logistical properties. The company's capital recycling has freed up R4.8 billion with an additional R3.5 billion expected over the next 12 months. The property group has over 20 MW of installed solar capacity and ongoing sustainability initiatives, positioning itself for long-term growth. The share has a potential 8.84% increase on the cards to trade at R14.95.
Afrimat’s (AFT) recent acquisition of Lafarge South Africa, a cement, construction aggregates, and concrete company, highlights growth potential. The investment, which is Afrimat’s largest to date, has added 3 million tons of aggregates and 960,000 tons of fly ash (fine powder coal with carbon) with the potential to double the fly ash. In its 2024 financial year results, Afrimat reported a 24% rise in headline earnings per share (HEPS), reaching R5.67 and generating R1.2 billion cash. Afrimat plans to invest R300 million in maintenance and expansion. The share price has the potential to surge 12.97% to reach R73.63.
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