Telkom market cap hits R10 billion
Shares in Telkom closed in on R20 in morning trade on the JSE on Friday (12 July), having gained in excess of 61% since its lowest trade level of R11.93 (intraday R11.34) in May.
On Friday Telkom CEO Sipho Maseko has bought 52,520 ordinary Telkom shares with the value of just under R1 million (R999,980.80).
In morning trade on the local bourse, Telkom added 1.37% to R19.26, moving its market cap past R10 billion (R10.03 billion), having fallen to R6.2 billion on 6 May.
Investor opinion on the future of the company is divided with Irnest Kaplan, MD of Kaplan Equity Analysts noting that the group’s shares have been undervalued for some time.
“It is fair to say that Telkom’s share has been largely undervalued for some time. Arguably, it’s dropped too much,” the analyst opined.
He pointed to a recent change in the board and top management of the company as a potential catalyst for change at the group.
However, the analyst said he didn’t think that the company would climb to much more in a short period of time.
“It’s not going to be a darling,” Kaplan said. “There are just too many unknowns, it’s still difficult to call. There needs to be more clarity before one can take a long term view on Telkom.”
Other investors have said they would like to see delivery from the company before buying into the stock.
“The only thing that’s really in favour of the stock right now is that it’s trading at probably a 50% discount to the NAV, which management now claim it to be R34. It’s probably trading at a massive discount to that,” said Gryphon Asset Management portfolio manager, Reuben Beelders recently.
Last month, Telkom reported a 73.2% decline in headline earnings per share to 87.0 cents in results for the year ended March 2013.
Group operating revenue decreased by 1.7% to R32.501 billion (2012: R33.079 billion).
Telkom’s board also took the decision to impair the carrying value of the assets of the group by R12 billion for the year ended 31 March 2013, giving the group a net asset value is R34 per share.
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