Bidcorp trade idea ( Revised )

Bidcorp trade idea ( Revised )

Bidcorp is one of the stocks I follow quite closely and often offers nice trading ranges. This is a quick few bullet points as to why I believe it’s a buy at current levels:

  • We attended the Investment Forum last week at Sun City, with most of the Asset Mangers presenting. The overall feeling is that Sa Inc has run maybe a bit ahead of itself after December, and the more Defensive/dual listed stocks unloved. I think we should start seeing a rotation here, yesterday Sa inc was selling across the board.
  • Bidcorp results were out last month, mostly inline and slight beat. We now have a better understanding of the U.K segment, and Europe had an upside surprise. It does trade at a premium to peers, but well off the highs and with exceptionally well management team to justify this premium.
  • Reuters terminal average analyst take profit that covers Bidcorp is still above R300 levels, See below.
  • Looking at the chart, on the lower end of the Bollinger band, also indicating a buying opportunity.
  • Nice ZAR hedge at current currency levels

Source: Reuters Terminal

Source: Reuters Terminal

At the moment, with all the droughts in Cape Town, listeriosis issues overhang on TBS, this is my preferred defensive play.

Trade levels:

Entry: R262 –R266
Take Profit : R285
Stop Loss: R252

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