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Is Capitec not just unbelievable!

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Werner_1
Super Contributor
I am really happy that i bought this share a few years ago. its really on the go now... what do you guys think about it. who owns it?
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25 REPLIES 25
suki
Super Contributor
i regret i did not buy. it trippled in 12 months? wow. so u think it will keep going up?
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Werner_1
Super Contributor
I dont give estimates on short term moves, i am a long term value investor, bought the share when it was indicated to offer value on my model and now it really doesnt show up on the model, but still in holding levels, i think the business is solid, well capitalised and growing very strongly, there is a huge market for their product so i will hold as long as this is the case. I dont think i would add to the position now though. But if you interested i can let you know how far off value it is in my model? will check this evening...
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kwagga
Super Contributor
Werner, I expect the Capitec party to end soon. Speculators are running riot with the share. Already on a 22 PE and counting. I'm not saying is going to pop completely, only that you might see a more fair reflection of value over the medium term. This is the last leg in a serious bull run for Capitec - just watch the technicals to spot that. Some short term speculators are going to get burned as always.
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kwagga
Super Contributor
Seems to be a theme here. Speculators moving from one share to the other - Metorex, Anooraq and now Capitec. Always one running out of sinc with the market, just to fall back after a few days.
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Werner_1
Super Contributor
like i said, i am a long term investor, i bought capitec at levels that offered very good value, so i dont really mind, i plan to hold for long term and would buy on any correction/pullback. its a excellent company. there is reasons its attractive, these havent changed even if speculators are moving the price, and thats why i have the shares, not because its moving well...
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Werner_1
Super Contributor
Kwagga, but you are right, it is very high now...
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SimonPB
Valued Contributor
in a world wide survey last week (or week before) CPI was voted one of the top 25 ebrands globally .. hence the recent move me thins .. an that 22 PE less a worry is they growing at 50% ??
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Werner_1
Super Contributor
yip, currently growing very fast. i want to still find out how much of the market they expect to capture, obviously they will not get all the big 4 clients (lol), but then again, lower-middle income range in SA is huge, many still have no banking products/services and i think if the lower-mid income realises they could save from using CPI they might be interested, the more employment grows (when economy picks up) this could help people get jobs, and maybe the market for lower income earners who wants a bank grows... then there is moving into other african countries with their model (which is very successful in risk management and cost effectiveness), then there is quite a market. so i think the future looks bright for CPI's business model! what you think?
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SimonPB
Valued Contributor
what is happening is the mid an upper income are now also opening CPI accounts as they way cheaper then traditional bank accounts .. the CEO also mentioned a few weeks back that they 'dream' of going to brazil one day .. well don't we all, but does sugggest international growth a possibility (and of couurse a risk) ...
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Werner_1
Super Contributor
Yes, that will have to be thought out well, lots of SA companies that went global weren't so successful. lets hope when CPI does it they thorough, prepared and do it properly... For basic banking CPI is great, efficient and cheap, but SBK, FSR, ASA has a wider range of products so i guess the more sophisticated client will not move, but then most of the population dont require those services or would only move their transactional accounts to other places. I like the idea of Brazil, India, etc more than some African countries which i think might have more risk... lets see what happens.
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Werner_1
Super Contributor
I really love banks. You guys know that Jamie Dimon is my hero and JPMC my favourate company... lol... my next cheap banking acquisition will be some shares in Citigroup very soon. getting ready to transfer funds now. This company is very cheap, has a huge international client-base and now after the crisis has competent management headed by Vikrim Pandit. He is doing a excellent job cleaning up the mess from his predecessor who got out of control with risks. can get the share for just less than $4, and it could make $20bn earnings per year in 2 years time, estimated price of $10-$12 by then (next 2-3 years)... thats a very good gain for a company that offers value at the moment. current assets are higher than market cap (even though assets can drop in value, i think they isolated this quite well and everything is expected to go better now).
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kwagga
Super Contributor
Sorry for being a sceptic. I regocogize Capitec is a fast growing brand, but a rise in the share price like we've seen in the last week is not sustainable. It has already surfaced that Capitec is not that cheap in certian aspects of banking, plus the big four are sure to take note, and become more competitive on retail banking charges, or face continues client loss. Surely they can be so stupid as to just let this company continue to take away more clients from them, or are they. I've considered closing all my Nedbank accounts and move to Capitec, and so far nothing Nedbank did has deterred me from not moving my account.
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kwagga
Super Contributor
What % of Citi is owned by the Government ?
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SimonPB
Valued Contributor
sure the recent rise is crazy - to an investor that's neither here nor there .. but to your other point, the big banks trying to compete, they will find it way way hard .. they have tried with the one account (can't remember what it is called), and that failed .. they are also trying with cell phone banking - but the biggest issue is systems, more then anything that is what enables cheap banking and CPI has that down pat ..
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Werner_1
Super Contributor
i think its 25% now, but the government is expected to sell its shares very soon, in the next month or 2, then maybe a bit of a drop and then investors expected to pick the shares up.... thats when it will start going well - US analysts say... the company looks very good though... now that its getting cleaned up. Sandy did the biggest mistake in his career to fire Jamie Dimon many years back and let Chuck Prince take over when he retired!
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Not applicable
Don't know about Capitec, but from a bank perspective, read the Jean Tomkin article in the business day. It mirrors similar studies I have done in my spare time in the past. Banks are trading at pretty close to historically low earnings yields, which means that either earnings have to start catching up (which implies a flat price over the same period) OR prices will have to come down. And you can't really get too excited about the dividend play either, because they are all cutting back on the div's, except STB and, surprise surprise, Capitec.
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Werner_1
Super Contributor
yip, thats why i selected to acquire some US shares at very attractive prices, JPMC has enormous long term potential..
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john_1
Super Contributor
just a heads up.. Werner Bank of America is still selling quality morgage assets at fire sale prices (maybe that they still have lots of bad stuff they cant sell, or they have looking liquidity issues).. there may be a few skeletons about to fall from the closet if the guy I was speaking to yesteday is right.. CFO at one such firesaled intitution.
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Not applicable
A beginners question - If CPI is expensive, is it then not better to buy those other okes shares that hold 40% of CPI? Think I read about PSG. Yep Jannie Mouton. He has a big chunk, doesn't he? PSG is "cheaper"
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