The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Moonraker on January 16, 2014, 02:00:03 pm
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A fair number of analysts are now picking ADH for 2014, and the stock has jumped by about 12% since beginning Jan.2014.
It was sleeping for most of 2013, while COH retuned 70% in 2013, ADH returned 9.9% incl. dividends.
Curro of course seems grossly overvalued with a PE of over 200, and I personally would not want to buy at those levels.
ADH is currently on a PE of 20.
Is anybody invested in ADH, and if so what are your thoughts ?
One thing that baffles me, all those fancy new school buildings, especially with COH, but where do they get the teachers ?
Last I heard nobody is keen to be a teacher in ZA, quite understandable really. School buildings with all the latset equipment
mean nothing if the teachers are not up to it.
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I would also like to hear. ....
I predict that you will see more and private schools, especially with the curriculums being adjusted to get pass results instead of quality education
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Buyer beware. A lot of people rushed out to buy African Bank based on Capitec's success. That ended in tears.
Curro is like an overvalued IT stock. People buy it because of potential. I also wonder how they are going to pay for decent teachers, buildings and the like. It should have the effect of driving up teacher salaries (which is a good thing in my book) but that means all those poor old government schools are going to suffer with the not-so-good teachers.
I don't know anything about ADH other than I don't think people have thought through the financial models properly. Hype can only carry a stock for so long......
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PSG’s Curro is the most popular stock pick]
(http://www.moneyweb.co.za/moneyweb-investment-insights/psgs-curro-is-the-most-popular-stock-pick)JOHANNESBURG – Private schooling company Curro has emerged as the most popular stock pick for 2014. Each year Moneyweb runs an informal stock picking competition. At the beginning of the year, community members choose one JSE-listed company. The best performer for the year wins.
Blah, missed the boat, there's still ADH, but I am sceptical.
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I also wonder how they are going to pay for decent teachers, buildings and the like.
We, the parents, pay - trust me. Yes you do get good teachers, excellent sport coaching - usually ex this or that sportsman and learners do use tablets in stead of books in classes, but everything is additional to your account. I've seen this school bursting out of its seems since inception and its not stopping.
As an investor (in you child's future) you pay for a service and teachers are paid by parents, they know it, we know it, no slacking there or they are called out very quickly.
I personally think this one is just going to grow and grow.
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Curro Holdings Limited - Trading Statement
Release Date: 20/01/2014 12:10:00 Code(s): COH Trading Statement
Curro Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/025801/06)
JSE Share Code: COH
ISIN: ZAE000156253
(“Curro” or “the Company”)
TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, a listed company
is required to publish a trading statement as soon as it becomes aware
that the financial results for the financial period to be reported on next
will vary by 20% or more from those of the previous comparable period.
Shareholders are hereby advised that a reasonable degree of certainty
exists that the Company will report an increase in headline earnings of
between 80% and 100% and an increase in earnings per share of between 77%
and 97% for the year ended 31 December 2013.
This means that the Company will report an attributable and headline
earnings per share of between 12.6 cents and 14.0 cents for the year ended
31 December 2013, as opposed to the attributable and headline earnings per
share of 7.1 cents and 7.0 cents published in the previous corresponding
period.
Curro ended the 2013 year with 26 campuses accommodating approximately
22 000 learners. It is anticipated that for the 2014 year, Curro will have
at least 32 campuses with approximately 27 000 learners.
The financial information on which this trading statement is based has not
been reviewed and reported on by Curro’s auditor. The financial results
for the year ended 31 December 2013 are expected to be published on or
about 18 February 2014.
By order of the Board
Durbanville
20 January 2014
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One thing that baffles me, all those fancy new school buildings, especially with COH, but where do they get the teachers ?
Last I heard nobody is keen to be a teacher in ZA, quite understandable really. School buildings with all the latset equipment
mean nothing if the teachers are not up to it.
Extract from ADH June 2013 results under 'prospects'.
The Resourcing division will still feel the effects of a difficult staffing market but is well positioned to hold its own and continue to make a positive contribution.
That's what I am concerned about. Exactly how is Curro different, do they have absolutely no staffing problems ? Is there a glut of qualified teachers
that Curro can draw from, and only ADH is finding it difficult to source staff ? Explanation needed !
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What's with the exclamation Moon, :D calm down - you are going to give yourself a hart attack.
I don't have the facts, I can only comment on what I have seen. It's like everything else in the world, you pay good money, you get good value and vice versa. Maybe competent but fed-up teachers from government schools fill the gap, who knows. I'm seeing a COH head master tomorrow evening, I'll get his take on it. Edit: Nothing concrete to add.
But for now, you chill. >:D
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I don't intend investing in either of these stocks, for better or for worse. Merely curious about the über-hype, especially
as regards COH.
COH would need to double their upper range 14c earnings forecast every 4 years to get the PE down to acceptable levels
at todays share price.
Not for the faint hearted.
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COH had a small correction of nearly 10% but peanuts really. Way overvalued, need much much more.
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COH seems to be forming a morning star. The third candle shows that the bears were still in control. The second candle shows that the bears petered out and the bulls started regaining causing that long tail that interestingly also closed that gap left behind in the first week of Dec. If todays candle stays green and near the middle of the third candle body then it is in a confirmed bullish reversal.
Market allowing, she will go up but with the correction imminent, she may drop in sympathy.
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Changed my mind about not buying for longer term. Bought ADH @685 on 19th. Was pleasantly surprised to see it at an intraday high of 780 and a close of 742 the next day. Seems it was oversold from its high spike of 874 in Jan.
I reckon it is a good defensive stock that will withstand a sharp market downturn better than most. If rated at COH's PE the price would be somewhere in the 7000's i.e. roughly 10x the current price.
Management is now wide awake. :)
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There you go.
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Overvalued, but good, stocks tend to move sideways for some time to allow earnings to catch up.
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What's going down here ? Is Curro wanting to buy out Advtech ? Both issued cautionaries. Advtech share price has shot up over the past week.
Advtech Limited - Cautionary Announcement
Release Date: 25/06/2015 12:20:00 Code(s): ADH Email this JSE Sens Item to a Friend Printer Friendly Version
Cautionary Announcement
ADvTECH Limited
(Incorporated in the Republic of South Africa)
(Registration number 1990/001119/06)
Share code: ADH ISIN: ZAE000031035
("the Company" or “ADvTECH”)
Cautionary Announcement
The board of ADvTECH has received an unsolicited proposal from a third party which it is obliged to
consider. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s
securities until a further announcement is released.
25 June 2015
Johannesburg
Sponsor and Corporate Advisor: Bridge Capital Advisors (Pty) Limited
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Curro cautionary issued 12/6/15
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More HERE (http://www.bdlive.co.za/national/education/2015/06/26/curro-mooted-as-suitor-for-advtech)
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It's hard to believe this deal fell through because the racism news articles in the media. I have yet to find an analyst comparing these two companies in depth.
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Here's an excellent analysis of AdvTech growth prospects (http://investor.moneyweb.co.za/2015/09/02/education-lays-the-golden-egg/) from Moneyweb's Investor magazine. They have always been more conservative than Curro. But now they have a R3 billion investment plan, especially in their schools division.
They remain a takeover target both locally and internationally. Remember the Curro offer was at a 42% premium.
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Advtech has a debt to equity ratio of 132%!!! I will never invest in a company with that kind of debt.
If I were them I would rather cut down on the high dividends and use that pay off the debt. Management doesn't seem to have their priorities straight. Another sign that this is not the best company to invest in.
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All successful businesses are funded by debt to enable them to grow. I wouldn't read too much into the ratio, they are doing a restructuring of their debt.
You missed out on 40% YTD appreciation in the share price. This one along with Curro are buys, certainly for the long term for reasons known to all of us.
Capital structure and funding
Net Group gearing as at 30 June 2015 reflects a debt to equity ratio of 132%. While this is well within the Group’s covenants with its bankers, ABSA
(member of Barclays), it is evident that the Group’s accessible funds to maintain its accelerating investment plan will become constrained. The Group
holds or is securing 20 sites for expansion and development. The Board has approved further new investments as part of the previously-announced
R3 billion rolling capital expansions programme, and management has identified and is developing other new projects totalling almost R1 billion.
The Board is therefore considering the optimal capital structure for the Group and is formulating a financing strategy that it believes will allow it to
sustain this accelerating growth strategy in the most efficient manner. In particular, the Board believes it is important to have certainty of access to
various funding sources in order to be best positioned to execute in competitive situations.
As part of this process ADvTECH is looking to put in place long-term debt facilities which will be used to refinance existing bank borrowings. This will
allow the Group to raise further debt facilities as and when needed and thus enhance the scope and flexibility of ADvTECH’s planning and the execution
of its growth and acquisition strategy.
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I understand what you are saying. Businesses make use of debt for expansion but that ratio is just way too high. I am not saying you should not be invested in it but, for me personally, I am not interested in investing in companies with a debt to equity ratio higher than 50%. Even that is almost getting too high for me.
This from the article on AdvTech in the Moneyweb Investor:
"Implementing a strategy of this magnitude will require the allocation of significant funds. With the group's shares looking undervalued it is more likely that management will opt for debt financing rather than share issues."
So there is a good chance they might be taking on more debt with a ratio that is already too high. I just don't like the sound of that.
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POSTING OF RIGHTS OFFER CIRCULAR
ADvTECH shareholders are referred to the finalisation announcement released on the Stock Exchange News
Service (“SENS”) on 5 November 2015 relating to a rights offer to raise up to R850 million.
ADvTECH shareholders are advised that the circular in respect of the rights offer will be posted to certificated
shareholders on Tuesday, 17 November 2015 and to dematerialised shareholders who have elected to receive
such documents on Tuesday, 24 November 2015. The circular will also be available on the Company’s
website: www.advtech.co.za.
The letters of allocation were listed and commenced trading today, Monday, 16 November 2015, and will
continue trading until Friday, 27 November 2015.
Johannesburg
16 November 2015
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Good morning everyone.
EasyEquities is listing the current AdvTech shares and the Rights Offer. I currently own AdvTech shares and can buy more at the current price of R13. Why do I want to buy the rights offer at R1.60?
My question is about buy more of the current shares for sales on the market vs the rights offer. What's the advantage of the rights offer?
Sincerely
Ramon
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Based on this...
In terms of the rights offer, 75,555,556 new ADvTECH ordinary shares (“rights offer shares”) will be
offered to ADvTECH shareholders recorded in ADvTECH’s share register at the close of business on
Friday, 20 November 2015 (“record date”), at a subscription price of R11.25 cents per rights offer
share, in the ratio of 16.59818 rights offer shares for every 100 ADvTECH ordinary shares held.
The subscription price per rights offer share represents a 10% discount to the 30 day volume
weighted average price of ADvTECH ordinary shares listed on the JSE Limited (“JSE”) as at the close
of business on Wednesday, 21 October 2015, being the date on which the rights offer was priced.
I get an ex rights share price of about R12.62. Deduct the rights offer price of R11.25 and you get R1.37 for the value of the nil paid letters.
I would just follow your rights as things stand now.
Record date for the rights offer Friday, 20 November
Rights offer opens at 09:00 Monday, 23 November