Bit of a damp squib so far, this 2024.
Any hopes that the JSE’s all share index (Alsi) might trundle closer to 80,000 points have been quickly dashed. At the time of writing the Alsi was around 73,500 points with resource stocks taking flak and the other big global counters mostly treading water or sinking a bit.
Some wags have started referring to the Alsi as the Also, suggesting that the JSE’s muted trading volumes make the local bourse an “also-ran” in world market terms.
For me the most disappointing start to the year has been the ongoing scepticism around small-cap counters. Already a handful of counters — and here I include Bowler Metcalf (covered in this issue), Transpaco, Super Group and Blue Label Telecoms (to name a few) — have shown encouraging resilience in a tough trading environment. The market, though, is not prepared to grant them any benefit of the doubt, because of the state of the wider economy.
Interestingly, construction group Aveng — which now earns a whack of its keep in Australasia — perked up nicely after it released satisfactory results. Telling, one might think ...
One share that has shot the lights out, and subsequently dimmed, is little technology group 4Sight. Readers might remember we covered this (then neglected) stock early last year, suggesting a SPEC BUY when the share was under 30c.
In the run-up to the release of its 12-month results to end-December, some punters got a bit carried away — taking the share all the way to 120c. The headline earnings number (which did grow exponentially) would have put 4Sight on an earnings multiple of close to 25 times. These days, that’s heady for even the most dependable growth-orientated small cap.
An inevitable retreat was in progress as I was writing this column and, looking at the company’s cash flow prowess and prospects, it will be intriguing to see where the price settles in the weeks ahead. I know the price at which I would look at re-buying the stock ... and there is still a little way to go.
I was going to give a brief update on readers’ stock picks for 2024 but I’ll spare everyone the pain, and revisit that next month. Happy investing.
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