Redefine Properties is a South African-based Real Estate Investment Trust (REIT). The internally managed local property portfolio comprises premium retail, office, and industrial properties across South Africa's major metropolitan areas. The SA portfolio is complemented by a strong presence in retail and logistics property assets in Poland. The group also actively manages a diversified property asset platform comprising local and international property assets.
Technically, the share seems like an attractive tactical investment opportunity. Importantly, the price remains above its 200-day simple moving average of R3.55.
A sustained position above the 200-day simple moving average is a notable technical milestone and is regarded as a bullish signal. When a share is trading above its 200-day, it may suggest that the long-term sentiment has undergone a positive shift. This shift, from bearish to bullish, often coincides with improvements in a company's fundamentals or broader economic conditions.
Upside price momentum according the MACD (Moving Average Convergence Divergence) histogram supports the trade idea. The recent sharp upwards trajectory of the on-balance volume indicator - which uses volume-flow to predict share price movements - indicates that money is flowing into the share.
According to the RSI (Relative Strength Index), the stock will be overbought at ~R4.50, which is also our profit target.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R3.90.
Share Information
| Share Code | RDF |
|---|---|
| Industry | Real Estate Investment |
| Market Capital (ZAR) | 26.24 billion |
| One Year Total Return | -6.04% |
| Return Year-to-Date | -11.19% |
| Current Price (ZAR) | 3.72 |
| 52 Week High (ZAR) | 4.35 |
| 52 Week Low (ZAR) | 3.05 |
| Financial Year End | August |
| The share price has been under pressure year-to-date; however, the recent recovery is encouraging. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (ZAR) | 0.21 | 0.51 | 0.52 | 0.55 |
| Growth (%) | 136.69 | 2.56 | 4.81 | |
| Dividend Per Share (ZAR) | 0.44 | 0.45 | 0.47 | 0.50 |
| Growth (%) | 3.42 | 4.42 | 5.29 | |
| Forward PE (times) | 7.34 | 7.15 | 6.83 | |
| Forward Dividend Yield (%) | 12.18 | 12.72 | 13.39 | |
| The forward yield is expected to be sustained over the forecast horizon. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | CFR - Buy (Continue to hold) |
MTN - Buy (Continue to hold) |
APN - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 2331.00 | 102.08 | 182.66 |
| Current | 2485 | 105.13 | 185.26 |
| Movement | 6.6% | 3% | 1.9% |
|
A clear uptrend remains of interest. Remains below its 200-day simple moving average and the trade is regarded as countertrend.
Our profit target is R2737, with a trailing stop-loss at R2323. Exit the trade around 12 February 2024 |
Price movement that presents a potential mean reversion trade remains of interest. The share is below its 200-day simple moving average. Start of upside price momentum is supportive.
Our take profit target remains at R122 with a trailing stop-loss level at R97. Exit the trade around 19 February 2024. |
A price that appears to be developing a symmetrical triangle pattern remains of interest. Remains above its 200-day simple moving average. Upside price momentum supports the trade idea.
Our profit target is R222, with a trailing stop-loss at R162. Exit the trade around 27 December 2024. |
| Share Name and position | NTC - Buy (Continue to hold) |
BID - Buy (Continue to hold) |
|---|---|---|
| Entry | 13.80 | 422.56 |
| Current | 13.43 | 409.95 |
| Movement | -2.7% | -3% |
|
A price that is breaking through a key support level and showing signs of establishing a solid base remains of interest. Remains above its 200-day simple moving average. Upside price momentum supports the trade idea.
Our take profit target remains at R15.50 with a trailing stop-loss level at R13.50. Exit the trade around 5 February 2024. |
A share that is testing its 200-day simple moving average remains of interest. Fading downside price momentum supports the trade idea.
Our take profit target remains at R480 with a trailing stop-loss level at R405. Exit the trade around 8 January 2024. |
