By Peet Serfontein & Jalpa Bhoolia.
Reinet is an investment company that owns all the ordinary shares of Reinet Fund, who owns all the underlying investments. The fund's investment objective is to achieve long-term capital growth. Reinet's most important investments include the UK-based Pension Insurance Corporation and a stake in British American Tobacco.
Technically, a developing symmetrical triangle pattern suggests an investment opportunity (see the black converging trendlines on the main chart as well as the insert).
This pattern is characterised by converging trendlines, with the price making lower highs and higher lows, creating a triangle. A symmetrical triangle that forms in an uptrend signals share consolidation that could be followed by a potential bullish breakout.
The stock is trading in a markup phase of the Wyckoff price cycle, characterised by growing market interest and hence, strong buying pressure (volume). This supports our bullish stance.
Notice the use of the daily time interval, which provides more granular data, allowing for quicker identification of price movements and trends.
According to the RSI (Relative Strength Index), the stock will be overbought at ~R550. This classifies our profit target of R547 as realistic.
We suggest a low to medium capital at-risk allocation to this trade.
Share Information
| Share Code | RNI |
|---|---|
| Industry | Financial Services |
| Market Capital (EUR) | 95.74 billion |
| One Year Total Return | 22.41% |
| Return Year-to-Date | 4.81% |
| Current Price (EUR) | 488.64 |
| 52 Week High (EUR) | 501.22 |
| 52 Week Low (EUR) | 370.84 |
| Financial Year End | March |
| The stock has done very well over the past year, with various technical indicators suggesting even further upside. The share remains above its 200-day simple moving average (SMA). |
Consensus expectations
(Bloomberg)
| FY24 | FY25E | FY26E | FY27E | |
|---|---|---|---|---|
| Headline Earnings per Share (EUR) | 2.64 | 3.84 | 3.01 | 3.22 |
| Growth (%) | 45.45 | -21.61 | 6.98 | |
| Dividend Per Share (EUR) | 0.35 | 0.37 | 0.39 | 0.42 |
| Growth (%) | 5.71 | 5.41 | 7.69 | |
| Forward PE (times) | 6.46 | 8.24 | 7.70 | |
| Forward Dividend Yield (%) | 1.49 | 1.57 | 1.69 | |
| The bottom-line performance is expected to be solid over FY25, after which a moderation is anticipated. | ||||
Buy/Sell Rationale
Technical Analysis:
Fundamental view:
| Share Name and position | APN - Stop Loss (Close the Position) |
OMU - BUY (Continue to hold) |
WHL - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 239.98 | 11.99 | 60.82 |
| Current | 206.00 | 12.80 | 64.13 |
| Movement | -14.2% | +6.8% | +5.4% |
| The share performance has been disappointing and has triggered a stop-loss, leading us to close the position. |
The stock is approaching our time to exit date. A price building a base remains of interest. Upside price momentum remains halted, which is concerning.
Remains above its 200-day simple moving average.
Our profit target is at R14, with a trailing stop-loss at R12.00. Exit the trade on 16 September 2024. |
A price that appears to be building a base remains of interest. Remains just above its 200-day simple moving average. Upside price momentum has halted, which is concerning.
Our profit target is R71 with a trailing stop-loss level at R60.00. Exit the trade on 25 November 2024. |
| Share Name and position | TBR - BUY (Continue to hold) |
DCP - BUY (Continue to hold) |
ANH - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 224.91 | 34.52 | 1088.49 |
| Current | 235.40 | 35.51 | 1118.73 |
| Movement | +4.7% | +2.9% | +2.8% |
|
A price at major resistance is of interest. Remains above its 200-day simple moving average. Upside price momentum has halted, which is concerning.
Our profit target is at R260.00, with a trailing stop-loss at R210.60. Exit the trade on 28 April 2025. |
The stock continues to display higher highs and higher lows and remains above its 200-day simple moving average. Downside price momentum is a concern.
Our profit target is R39.00 with a trailing stop-loss at R33.65. Exit the trade on 23 September 2024. |
A developing ascending triangle pattern remains of interest. Remains below its 200-day moving average. Downside price momentum has halted, supporting the trade strategy.
Our profit target is R1 235 with a trailing stop-loss at R1 060. Exit trade on 28 October 2024. |
