I simply must start with a note that Netflix traded 24% lower in after-hours trade yesterday. That's a price below $265, similar to where it was trading in February 2018. I've written several times before about why I believe that the Netflix business model has poor economics, with the latest market capitulation just confirming my views.
Coronation Fund Managers announced that assets under management (AUM) at 31 March 2022 was R625 billion, down from R634 billion at the end of September 2021. To demonstrate how difficult it is to grow from this size, AUM was R610 billion (only slightly below the current level) back in September 2015, a frothy time on the JSE. The funds rise and fall with the market, with client inflows or outflows as the balancing number. The latest announcement neglected to provide the September 2021 number as a compariso n so I had to go digging for it, which is usually a lead indicator that the company would prefer you not to make that comparison.
Pepkor may be dealing with tough times in KZN from the floods (and the resultant damage to its distribution centre in the province), but that didn't stop Moody's from dishing out significant upgrades to the company's credit rating. In its comments on this upgrade, Moody's highlights Pepkor's strong operating performance during the pandemic and the track record of solid corporate governance. Whilst many corporates have had their outlook changed from negative to stable based on Moody's similar change to the South African fiscal outlook, this goes much further than that - Pepkor's credit rating has been significantly upgraded in addition to the outlook being moved from negative to stable.
Glencore has confirmed that the distribution payable on 20th May is R1.90759 per ordinary share. When divide nds are denominated in a foreign currency (in this case in USD), an announcement comes out that pegs the exchange rate a few weeks before the dividend is payable.
Oceana Group has released an updated trading statement covering the six months to March 2022. The previous trading statement was released on 9th March and indicated that HEPS for the interim period would be at least 20% lower than the comparative period. The update is significantly worse than that, with HEPS expected to drop by between 46% and 56% as the group dealt with the fallout of the KZN riots and other weather-related fishing disruptions. Interim earnings will be between 114.6 cents and 140.7 cents and Oceana was trading slightly lower at R56.70 in afternoon trade.
Altron reminded the market that CEO Mteto Nyati is stepping down with effect from 30 June 2022, as was announced back in January. The process to find a permanent replacement is underway, with existing Chairman Stewart van Graan appointed on an interim basis as Acting CEO. He will hold this role from 1 July 2022 until 30 September 2022 to ensure continuity in the business. As van Graan will be seen as an Executive Chairman during that time, a Lead Independent Director will be required in line with the recommendations of the King IV Report on Corporate Governance. Dr Phumla Mnganga will fulfil that role over the three-month period. Of course, all eyes will be on Nyati's permanent replacement, a position that has yet to be filled.
In the latest episode of
Magic Markets, Craig Antonie of AnBro Capital Investments joined us to discuss the fascinating world of investing in disruptors. We use the company Crowdstrike as an example of a business that has always been ahead of its time.
Be sure to listen to it here.
Have a good Wednesday!
The Finance Ghost
