By Peet Serfontein & Jalpa Bhoolia
Naspers is a prominent multinational media group which has, over the last two decades, evolved from a traditional print media business in one country to a broad-based e-media company in multiple markets. Naspers' most notable investment is Prosus, which in turn has a large shareholding (26.0%) in Chinese internet giant, Tencent. Prosus is focused on e-commerce, food delivery, and classifieds.
Technically, a price that appears to be well positioned for a repetitive sequence in monthly performances presents an interesting investment opportunity (see the insert on the main chart). The share price distribution since the year 2000 reveals a nuanced seasonal pattern in performance - particularly for the months of February, March, and September that have historically underperformed.
In contrast, the period from April through to August points to a consistently strong performance. Similarly, for the months of October to January, the share has shown a notable upward trajectory, potentially offering additional attractive investment opportunities.
Also applicable is a price consolidation range, which refers to a period in which a share trades within a relatively stable range - fluctuating between a defined upper resistance level and a lower support level. This pattern indicates that the forces of supply and demand are in a relatively balanced state, with neither buyers nor sellers gaining definitive control over the price direction.
According to the RSI (Relative Strength Index), the stock will be overbought at ~R3 680. This classifies our profit target of R3 633 as realistic. We suggest a low capital at-risk allocation to this trade.
Share Information
| Share Code | NPN |
|---|---|
| Industry | Consumer Discretionary |
| Market Capital (ZAR) | 568.15 billion |
| One Year Total Return | -6.11% |
| Return Year-to-Date | -0.30% |
| Current Price (ZAR) | 3 118.46 |
| 52 Week High (ZAR) | 3 567.84 |
| 52 Week Low (ZAR) | 2 673.30 |
| Financial Year End | March |
| Several technical indicators guide for further upside potential. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 4.27 | 11.48 | 16.10 | 21.01 |
| Growth (%) | 168.74 | 40.31 | 30.52 | |
| Dividend Per Share (USD) | 0.00 | 0.49 | 1.17 | 1.40 |
| Growth (%) | - | 137.73 | 19.28 | |
| Forward PE (times) | 14.33 | 10.21 | 7.83 | |
| Forward Dividend Yield (%) | 0.30 | 0.71 | 0.85 | |
| Strong earnings growth over the near term is expected to taper off but remains good, nonetheless. | ||||
Buy/Sell Rationale
Technical Analysis:
Fundamental view:
| Share Name and position | APN - Profit take (Close the position) |
TFG - Stop-loss (Close the position) |
MRP - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 182.66 | 111.64 | 157.50 |
| Current | 215.25 | 102.52 | 174.08 |
| Movement | 17.8% | -8.2% | 10.5% |
| We suggest taking profit early on this position. | The stock recently triggered our stop-loss level, leading us to close the position. |
A price coinciding with a trough in the business cycle remains of interest. Upside momentum has halted, which is a concern. Trading above its 200-day simple moving average.
Our take profit target remains at R213 with a trailing stop-loss level at R153. Exit the trade on 7 April 2025. |
| Share Name and position | GLN - BUY (Continue to hold) |
BTI - BUY (Continue to hold) |
SNT - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 97.10 | 562.87 | 296.56 |
| Current | 102.95 | 570.54 | 296.67 |
| Movement | 6% | 1.4% | 0% |
|
Recently prompted a buy signal according to Bollinger Bands crossovers. Upside price momentum is supportive. Testing its 200-day simple moving average.
Our take profit target remains at R112 with a trailing stop-loss level at R97. Exit the trade on 17 June 2024. |
Testing the lower range of an inclining channel - an interesting point. Upside price momentum regained some strength. Remains just below its 200-day simple moving average.
Our take profit target remains at R645 with a trailing stop-loss level at R547. Exit the trade on 22 April 2024. |
An incomplete cup and saucer pattern remains of interest. Fading downside price momentum supports the trade strategy. Remains above its 200-day simple moving average.
Our take profit target remains at R24.50 with a trailing stop-loss level at R20.50. Exit the trade on 27 December 2024 |
