Vodacom a good bet: analyst

Vodacom is a great stock to invest in at its current levels, according to Wayne McCurrie of Momentum Asset Management.

McCurrie said that the Vodacom share price has dropped in recent weeks, and that he can see no logical reason for this drop. Vodacom traded at around R94 per share on the JSE in the morning session on Friday 22 June 2012, down from R110 in early April.

“It was not expensive to start off with, it is a very stable business and Cell C and 8ta have proven that they are not really competition at all,” said McCurrie.

“Vodacom has huge cash piles and the company has big dividend payouts. This is one of those shares where you do not have to worry what the price does – the dividends are high enough to compensate you for owning the share,” said McCurrie.

David Shapiro, deputy chairman at Sasfin Securities, said that there are worries that Cell C will force a price war into the South African mobile market, but McCurry argued that Cell C simply does not have the capital to sustain a price war. “Telkom also does not have the capital to sustain 8ta, let alone a price war,” said McCurry.

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Vodacom a good bet: analyst