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Online Share Trading

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Gijima AST (GIJ)

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Chubby
Occasional Contributor
Anyone have any views on this share?? I find the move quite interesting and think that this might be a time to buy. Any views will be appreciated!!
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14 REPLIES 14
dimitrius
Regular Contributor
fundamentally, its not exactly a strong company. Overvalued relative to its earnings. Cash flow is terrible. Operating profit of R31 mil over the last 6 months to revenue of over R1 bil is not exactly a great return. Competitively, most of these IT services companies are the same. No real competitive advantage. They lose key skills just as quickly as they find them. That's briefly the value side of things. Technically, the thing can bounce up and down at the wiff of a positive or negative news article. So it depends whether you're in it for investment or speculation.
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scandal
Super Contributor
was a bullish article in media recently, think money web where an oke said that there is value in GIJ etc. Interestingly though he reckoned it would be better to wait for a pull back before buying...
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dimitrius
Regular Contributor
what exactly does he base his "valuation" on? "Potential" contracts don't count. And neither do foward earnings.
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ABuzz
Super Contributor
I think it is a good buy at these levels. It should go to over R 1.12 in the next couple of weeks and be up at about R 1,25 by September. If you are happy with this kind of gain then get in. I always find it interesting to see which of the institutions are buying and holding. Investec Emerging Companies Fund bought just over 10 million shares in GIJ in the quarter ending 31 March, which constitutes just under 1% of the portfolio of this fund. Sounds like quite a serious investment when one considers that their top 10 shares in the fund make up over 50% of the fund.
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dimitrius
Regular Contributor
ABuzz, on what do you base the idea that this is a good buy? Just because an institutional investor bought 10 million shares, doesn't mean it was a good buy. Institutions are just as fallable as us smaller investors, if not more so. Remember ITI Holdings, CS Holdings, DDT (@R70+), Brainware, etc during the 90's. Fund managers were buying them as well. The facts are that the company does not offer value at this price. Yes, it may go up to R1.12, but the chances of it staying up there because it offers value is pretty low, unless it's made some serious increase in its earnings over the last 6 months that it can show in its income statement. If it does stay up there, it'll be on speculation. Not on current reality.
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Pam_1
Regular Contributor
My stop loss dumped them, so I am not interested - for now they sucks.
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ABuzz
Super Contributor
Dimitrius, just for the record, I said it was interesting to note what the institutional investors are doing. I didn't say that was what I base my thinking on. And whilst I agree that they too make investment mistakes, I think they probably get it right a lot more than most of us individual investors, otherwise they wouldn't stay in business or keep their jobs. Having said that, there are lots of factors which I look at when evaluating a share and watching which of the investment houses are investing in which shares is a small consideration in the total equation. Anyway, GIJ had quite a good recovery today, let's see if they can sustain it.
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dimitrius
Regular Contributor
Sure ABuzz, there are a lot of ways to skin a cat with regards to investing. But at the end of the day, it's all about what value you see in the company, and I don't see any value, unless you're a speculator. Institutional investors get it wrong more times than they get it right. And so do financial journalists.
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ABuzz
Super Contributor
If they get it wrong so often, then how do they stay in business? ( And I am sure there are a lot of them that would prove you wrong on your previous statement) With respect, I don't agree with you.
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Pleiades
Frequent Contributor
Since when did earnings/profitability or other fundamental play a part an IT stock making a sudden jump? For axample, what changed in DTP's business between Jan/Jun? Surely the business was not worth 250% more than 6 months previously. Just remember they are just as likely to fall back after a good run. This volatility makes good money, and frankly I think GIJ might have been left behind compared to DDT, DTP and therefore offers value in the short term.
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dimitrius
Regular Contributor
That's fine. Lets agree to disagree ABuzz. Pleiades, I'm talking about investing here, not speculating. If you want to speculate, then you can go ahead and buy at these levels. But no intelligent person should buy a business for investment purposes if they haven't got the earnings and financial strength to prove that it's worth paying what the asking price is. You're basically buying a R1 coin for R30 here, give or take a few rands. Not very logical. But then again, speculators do give us value guys opportunity to buy at rock-bottom prices when they start to dump at any price. So go ahead. I hope you do make money out of it. I'll pick it up when it's more in line with earnings. I'll sleep better.
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ABuzz
Super Contributor
Thanks dimitrius, I've bought my R 1,00 coin (at R 1,00), so let's see if I can hold it and sell it at R 1,25.
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ABuzz
Super Contributor
dimitrius - it's reached my first level of R 1,12, in fact it touched R 1,15 earlier. Now let's see how long it takes to get to R 1,25.
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dimitrius
Regular Contributor
So I see ABuzz. On speculation. I'll stay the sceptic until I see some fundamentals that can back it up. Otherwise, good luck.
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