477 replies to this topic

[Blackobar]

Share code: EOH ISIN: ZAE000071072
DEALINGS IN SECURITIES BY AN ASSOCIATE OF
A DIRECTOR
In compliance with paragraphs 3.63 to
3.74 (both inclusive) of the Listings
Requirements of JSE Limited, the
following is disclosed:
Name of
director:
Jehan Mackay
Company:
EOH Holdings Limited
Name of
associate:
Tactical Software Systems Proprietary
Limited (“TSS”)
Relationship of associate to
director: Jehan Mackay is a
trustee and beneficiary of a family trust
which
owns 100% of TSS
Extent of director’s
interest: Indirect
beneficial
Nature of the
transaction: Sale of
shares on market
Date of
transaction
24 November 2017
Number of
shares: 75
000
Lowest selling
price: R81.85
Highest selling
price: R85.00
Volume weighted average price per
security: R82.68419
Total
value:
R6 201 314.54

[Bullhunter]

Thanks for the explanation.

Also demonstrates how institutions/asset managers, with all their resources, also make mistakes. Brait is the poster child.

[Spree]

It was up 5.6% at one point today.
 
It's not panic selling. The institution, in this case PSG, informs its broker of its intent to buy a large tranche of shares in a company. The broker then approaches other institutions who are holders of the share, looking for potential sellers.Should he find a seller wanting to offload a large holding,agreement is reached on the price. The seller is usually willing to sell at a discount. These massive trades happen mostly at the same time during the day, often well  below the current market price earlier in the day as happened yesterday with EOH. Why do you think Buffett is such a successful investor? Because he also gets a better entry point than everybody else. 
 
I suspect it has been institutions trading in this manner that has forced the share price all the way down from R125. 2.6 million shares (27% more) were acquired by unit trusts during the quarter while the share price  dropped 35%.

Thanks for the explanation.

[Bullhunter]

You called it correctly! This does makes me wonder who was so panicked that they sold over Ten Million Rand worth of stock at a 3 year low??

On the flip side, PSG are usually quite astute in their investments / stock picking. They now hold 5%, which is certainly a vote of confidence in EOH and management. They must see good value here, and good prospects ahead (Dominant market share, high annuity revenue, increasing organic growth, etc).

This should bode well for the stock (assuming there are no skeletons hiding in the closet!!).

And, as you mentioned, other asset managers have also been buying ( I think Foord owns over 5% as well).

It was up 5.6% at one point today.

 

It's not panic selling. The institution, in this case PSG, informs its broker of its intent to buy a large tranche of shares in a company. The broker then approaches other institutions who are holders of the share, looking for potential sellers.Should he find a seller wanting to offload a large holding,agreement is reached on the price. The seller is usually willing to sell at a discount. These massive trades happen mostly at the same time during the day, often well  below the current market price earlier in the day as happened yesterday with EOH. Why do you think Buffett is such a successful investor? Because he also gets a better entry point than everybody else. 

 

I suspect it has been institutions trading in this manner that has forced the share price all the way down from R125. 2.6 million shares (27% more) were acquired by unit trusts during the quarter while the share price  dropped 35%.

[Spree]

Walla! A day later, PSG Asset Management announces it has acquired a beneficial interest in EOH, such that its entire beneficial interest amounts to 5.02% of the total number of securities in issue.

You called it correctly! This does makes me wonder who was so panicked that they sold over Ten Million Rand worth of stock at a 3 year low??

On the flip side, PSG are usually quite astute in their investments / stock picking. They now hold 5%, which is certainly a vote of confidence in EOH and management. They must see good value here, and good prospects ahead (Dominant market share, high annuity revenue, increasing organic growth, etc).

This should bode well for the stock (assuming there are no skeletons hiding in the closet!!).

And, as you mentioned, other asset managers have also been buying ( I think Foord owns over 5% as well).

[Bullhunter]

Also of interest is that the overall unit trust ownership of EOH is up 26% for the quarter ending September 2017, meaning they have been accumulating  all the way down from  about R125.

[Bullhunter]

Down 8% today. New 12 month low.

 

Large single trade at close which was also the low for the day. Looks like institutions selling/buying and should recover.

Walla! A day later, PSG Asset Management announces it has acquired a beneficial interest in EOH, such that its entire beneficial interest amounts to 5.02% of the total number of securities in issue.

Edited by Bullhunter, 24 November 2017 - 12:20 PM.

[Spree]

If valued only on the fundamentals, it seems extremely cheap, on a PE of 10x (historic), and a forward PE of about 8x( expected heps). Moreover, they hold the dominant share of the local IT market, yet their market share is well below 10%, meaning there is great scope for consolidation (which is fantastic for an acquisitive company).

However, the collapsing share price is a huge impediment to their acquisition and consolidation strategy!

The major concern is that this share keeps tumbling, even in the absence of any publicly available news, indicating that some people maybe aware of some real trouble brewing!

I think that management should publicly and convincingly address all concerns, reassure investors, and work hard to restore confidence in the company. They need to also put "more skin in the game", by buying large chunks of shares, thereby showing their own confidence in the company.

If everything is fine and above board, I see no reason why the share would not be trading north of R120.00 !!

[SoleTrader]

Starting to look vaguely interesting. Will take 20% of my order tomorrow.

[Bullhunter]

Down 8% today. New 12 month low.

 

Large single trade at close which was also the low for the day. Looks like an institutions selling/buying and should recover.

[SoleTrader]

According to Cy Jacobs on twitter apparently many resignations from the company. It took Pinnacle almost two years to recover after their crap

[Spree]

Over reaction post divi?

Quite possible. However, this share went ex-divi over 2 weeks ago! This steady decline in price is mystifying. You have to wonder what is REALLY driving the price lower, in the absence of any negative news(in the public domain)?

The only news that I have come across of late is usually good (as in your link to the De Beers/ EOH software story). A further example is their recent appointment as an exclusive partner for Amazon (AWS).

Things had been looking up for the company. Latest results were pretty good, management's outlook was fairly positive, the allegations of wrongdoing were retracted. This should have resulted in the share price rising, yet, the opposite has happened!

Furthermore, quite a few of the brokers/ analysts on TV had been choosing EOH as their stock pick in recent weeks.

It makes you wonder whether someone out there knows something that we do not!

[Bullhunter]

Does anybody have any idea why the EOH share price has been steadily falling for the past week or so ( fallen about 15%)?

I have not come across any negative news anywhere.

Over reaction post divi?

[Spree]

Does anybody have any idea why the EOH share price has been steadily falling for the past week or so ( fallen about 15%)?

I have not come across any negative news anywhere.

[Bullhunter]

http://www.miningwee...-16/rep_id:3650

[Spree]

LDT today. Dividend 215c (gross).

[Spree]

EOH says its name has been cleared
 
https://techcentral....-cleared/77768/

Amabhungane have confirmed this. Although they have not, as yet, explicitly retracted the original artcle, they have confirmed, after 6 months of investigations and interactions with EOH, that they have "found no evidence of any wrongdoing" by EOH.

However, it seems that the market is still not convinced! After an initial spike in the share price this morning, the share has given back most of the gains.

If memory serves, the share was trading above R135.00 when the Amabhungane article was first published. The price immediately dropped to about R115.00. Some time after, Business Report rehashed the same article, which really spooked investors (again), and the share tanked to below a R100.00 !!

I think, if viewed purely on fundamentals, the price should return to where it was prior to the original article. It is trading on a foward PE of about 10; it is still showing growth, a!beit at a slower rate ; Healthy cash balance ; Increasing sales from software and IP( at higher margins on own software) ; etc...!

[Bullhunter]

EOH says its name has been cleared

 

https://techcentral....-cleared/77768/

[Bullhunter]

Liston Meintjies of NVest punted EOH on Business Day TV today.

[Spree]

17 AUGUST 2017 
For new EOH boss Zunaid Mayet, who replaced founder Asher Bohbot in May, this year’s precipitous 34% share price plunge is due squarely to bad press.
Mayet is fuming about "defamatory" reports from investigative journalism centre amaBhungane in April that linked EOH insiders — father-and-son team Jehan and Danny Mackay — to Lunga Ncwana, a "shady" middleman in the SA Social Security Agency (Sassa) grants scandal.
"We’ve been very clear in our repudiation of the article and its insinuations," says Mayet, who joined the company in 2009 and headed its industrial technologies division.
"We’ve engaged independent lawyers to come in and do a review [of] the facts in relation to the article. These have been presented to the EOH board and we’re satisfied that there is no truth [in them]. The articles are baseless," he says.
The subscription of R120.00 per month for Business Live is well worth it.

Thanks for that, Bullhunter. Greatly appreciated.

I see that EOH is sliding again, after a decent run last week. It seems that buyers wiil steer clear until these allegations are permanently 'put to rest'!!

If it is true that 'amaBhungane' will be retracting these allegations, this share could run very hard and very fast! If not, and there is no further clarity, the share will probably trend sideways or, maybe, downwards for some time.