Libstar: bearish on SA

Good Morning Voornaam,

There's an episode of the Ghost Wrap podcast that is fresh out the oven, bringing you the latest news on Bell Equipment, Transaction Capital, Capitec, Caxton & CTP, City Lodge and Sun International. This podcast is under six minutes long, so you're learning at faster than a rate of one company per minute! Thanks to Mazars, you can enjoy it here>>>

Events tomorrow

Don't forget to register for the next Unlock the Stock ont>event at midday tomorrow, featuring CA&S as one of the most exciting mid-cap companies on the local market. With extremely strong results to talk about, I can't wait for this one. Thanks to A2X, you can engage directly with the management team by registering for the event at this link>>>

For something with a completely different flavour, also at midday tomorrow, Jaltech is hosting the final webinar in a series aimed at estates, complexes, farmers and other corporates looking to move to solar. With industry experts on the call and obviously with load shedding firmly back in our lives at Stage 6, this is a worthwhile event to consider. You can sign up here>>>

Boost your career with Ghost Mail

I'm very excited to bring you something new in Ghost Mail that I think fits in perfectly with what I'm trying to do here. After all, the more you learn, the better your career prospects. It's as simple as that.

If this initiative picks up and you feel good about selected career opportunities being brought to you, I'm thinking of calling it Ghost Posts.

Singular Systems recognises the value in Ghost Mail readers and they are advertising a position for a Tax Data Analyst in Johannesburg. You can get all the details for the position at this link>>>

If you have more time today, these podcasts are great

There are almost endless learning opportunities available in Ghost Mail.

For example, a recent Ghost Stories podcast saw Investec bring you the opportunity to learn about the Investec USD S&P 500 Autocall, a structured product that is available for investment until 16 October. If you would like to see how derivatives can work together with index-tracking products to create fascinating outcomes, then listen to this show>>>

We've also had Nico Katzke of Satrix on a Ghost Stories podcast, talking about whether dividends are always a delight. This sent us down a rabbit hole on capital allocation theory and what this looks like in practice. Again, if you're serious about the markets and moving forward, these kinds of shows are for you. Find it here>>>

And for the stock pickers among you and the students of business who want to know how big companies operate, the latest Magic Markets show looked at Lululemon and Ulta Beauty and the latest trends from their results. That show is available here>>>

These mushrooms aren't springing out the ground

Libstar isn't having a happy time right now. Volumes fell by 7% in the six months to June and revenue managed to increase by 4% thanks to positive pricing and mix changes. But with volumes down, gross profit margin took a nasty dip and this drove normalised operating profit 26.6% lower. These aren't tasty numbers and they get worse as you move further down the income statement. As least cast flow conversion improved.

The really notable thing has an impact on all South Africans, not just Libstar shareholders. If you're wondering why GDP growth is so pathetic and our economy is always in the toilet, then look no further than this paragraph from the Libstar results talking about t he insurance proceeds from the fire at the mushroom facility:

"Current market and operating conditions, most notably the dependency of farming operations on stable electricity supply, are not conducive to the reinstatement of the Shongweni facility. As such, the Group will retain the proceeds from the insurance claim for application to value-accretive opportunities."

Even the Springbok forwards can't turn this ball over, unfortunately. If infrastructure doesn't improve in South Africa, capital investment will keep drying up.

As always, this doesn't mean that all companies are doing badly or that no opportunities exist. For example, there's an offer on the table for Brikor at 17 cents a share. WBHO also released much better construction results, with a nice uptick in renewable energy projects as well. Updates also came in from Discovery, Kore Potash and Stefanutti Stocks.

As always, you can get everything you need in Ghost Bites this morning at this link>>>

Range bound ahead of US CPI

It's a sad day when a 30-cent range means we are "range bound" but in percentage terms it makes sense. Long, long gone are the days of trading at R7 to the dollar. The rand traded between R18.80 and R19.10 yesterday, with all eyes on the US CPI release due today.

TreasuryONE also notes that gold has come und er pressure as investors moved back into the dollar as a safe haven asset, with the gold price trading at $1,910 per ounce. That's $30 lower than where it traded a couple of days ago. Brent Crude is still marching towards $100 a barrel, now at around $92.

I highly recommend subscribing to the TreasuryONE YouTube channel for regular updates in this space.

Get stuck in and have a great day!

You should expect us in your inbox Monday – Friday. If you don’t receive an email, please check your spam, or junk folder and “move us” into your primary inbox to ensure you get it each morning.

Disclaimer
Our content is intended to be used and must be used for informational purposes only. You must do your own analysis before executing any investments or strategic decisions, based on your own circumstances. We do not provide personalised recommendations or views as to whether an investment approach or corporate strategy is suited to the needs of a specific individual or entity. You should take independent financial advice from a suitably qualified individual who gives due regard to your personal circumstances.
Whilst every care is taken, we accept no responsibility or liability for any errors or omissions in any of our content.
The views, thoughts and opinions expressed in our content belong solely to the author or quoted individuals and/or entities, and not necessarily to the author's employer, organisation, committee or other group or individual, or any of our affiliates or brand partners.