By Daily Investor, Published December 16, 2023
Thamsanqa Netha’s top three stock picks
Netha describes Santova as a logistics business that operates globally, with a presence in Africa, Asia, and Europe.
The company specialises in trade services and supply chain management and recently expanded into digital solutions.
Key financial metrics include a 75% increase in offshore earnings, a 16% return on equity (ROE), and a very low debt-to-equity ratio.
Despite challenges like logistics demand fluctuations, softened demand due to interest rates, and post-Covid-19 recovery disruptions, the company strategically ventured into the right sectors with its digital solutions offerings, he said.
The investment rationale for Santova is the post-Covid uptick in demand for its services, particularly in Asia and Europe.
The company has also successfully diversified its revenue risks, achieving profitability in every region of operation, with growing profits in each area.
However, the key element for this company is its progress in digital solutions, notably in providing key supply chain analytics. This service segment has the potential for significant growth, he said.
The company is also diversified across regions that are set for future growth.
Santova is currently listed on the JSE with a market cap of just under R1 billion and a price-to-earnings (P/E) ratio of 5.6.
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