By Peet Serfontein & Pritu Makan
We initiate a long position. Our upside target is set at R42. We recommend a stop-loss at R36.
Coronation Fund Managers is one of southern Africa's most successful third-party fund management companies. It is a pure fund management business that offers both individual and institutional investors access to local and global expertise across all asset classes, including specialist Global Emerging Markets, Africa and Private Equity units. CML's product offerings include unit trusts, institutional mandates, and retirement funds.
Coronation is a well-established asset manager and has built a trusted brand over time. The company boasts a strong balance sheet and good profitability metrics with outflows seeing solid improvement recently. If the market performs well, the company should perform well. Overall, we like the company and maintain a positive outlook regarding long-term growth prospects.
Technically, the price is at a pivotal point of crossing both the 200-day and 200-week simple moving averages (SMA), which is reflective of a bullish bias. This makes for an appealing investment opportunity (see the insert on the main chart).
The price is also in the Accumulation phase of the Wykoff Price Cycle, supporting a bullish stance. This phase is typically characterised by decreasing selling pressure, higher lows, and increased volume on up-moves, signalling growing demand.
Fading downside momentum, as indicated by the Moving Average Convergence Divergence (MACD) indicator, adds further confluence to the bullish trade setup.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R39.
| Share Information | |
|---|---|
| Share Code | CML |
| Industry | Financial Services |
| Market Capital (ZAR) | 14.6 billion |
| One Year Total Return | 39.46% |
| Return Year-to-Date | -3.70% |
| Current Price (ZAR) | 37.71 |
| 52 Week High (ZAR) | 41.16 |
| 52 Week Low (ZAR) | 28.26 |
| Financial Year End | September |
| The share is testing the lower two standard deviation range of an upward tilting linear regression channel pattern, which supports our bullish case. | |
| FNB SPM Expectations |
||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 6.31 | 3.61 | 4.38 | 4.61 |
| Growth (%) | -43% | 21% | 5% | |
| Dividend Per Share (ZAR) | 5.66 | 3.61 | 4.38 | 4.61 |
| Growth (%) | -36% | 21% | 5% | |
| Forward PE (times) | 9.52 | 8.36 | 8.12 | |
| Forward Dividend Yield (%) | 10.5% | 12.0% | 12.3% | |
| Decent growth is expected post-current financial year normalisation after the FY24 resolution of the SARS matter. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | VOD - BUY (Continue to hold) |
STXIND - BUY (Continue to hold) |
TFG - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 109.87 | 114.97 | 142.67 |
| Current | 118.26 | 123.42 | 143.86 |
| Movement | +7.6% | +7.3% | +0.8% |
|
The price volume swing analysis for the share remains of interest. However, it seems like the 200-week simple moving average might act as temporary resistance. Upside momentum supports the trade.
Our profit target is R125.00 with a trailing stop-loss at R111.30. Exit the trade on 7 April 2025 |
A price that is developing a trough according to the Elliott wave theory remains of interest. Remains above its 200-day SMA. The start of upside momentum is a positive.
Our profit target is R127.00 with a trailing stop-loss at R115.50. Exit the trade on 16 February 2025. |
A trough in the price according to the Elliott wave analysis remains of interest. Remains above its 200-day simple moving average. The start of upside momentum supports the trade strategy.
Our profit target is R167.00 with a trailing stop-loss at R134.00. Exit the trade on 24 March 2025. |
| Share Name and Position | APN - BUY (Continue to hold) |
SHP - Buy (Continue to hold) |
GRT - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 171.38 | 292.78 | 13.22 |
| Current | 171.50 | 272.70 | 12.31 |
| Movement | +0.1% | -6.9% | -6.9% |
|
A price that is testing major support remains of interest. Remains below its 200-day simple moving average, and the trade idea is regarded as a counter-trend trade. Upside momentum supports the trade strategy.
Our profit target is R196.00 with a trailing stop-loss at R162.00. Exit the trade on 26 May 2025. |
A price that appears to be in a phase of low volatility remains of interest. Remains below its 200-day simple moving average. Downside momentum is a concern.
Our profit target is at R317.00 with a trailing stop-loss at R268.00. Exit the trade on 1 September 2025. |
A price trading at one of the highest price bins in its price distribution analysis remains of interest. Remains below its 200-day simple moving average. Downside momentum halted, supporting the trade.
Our profit target is R16 with a trailing stop-loss at R12.00. Exit the trade on 17 November 2025. |
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