Our opinion on the current state of ISA Holdings (ISA)

ISA Holdings (ISA) is a small Alt-X listed IT company offering network, internet, and information security services in sub-Saharan Africa. The company claims to employ some of the leading IT security specialists and to have the tools and experience to offer effective information security solutions.

In its results for the year to 29th February 2024, the company reported revenue up 33% and headline earnings per share (HEPS) up 35%. The company said, "The high proportion of subscription-derived turnover in the current reporting period is indicative of the trend in terms of which customers are showing a preference for subscribing to consumption-based security solutions." This looks like a good quality IT company that is profitable but has gone through a tough time.

The problem is that the share is thinly traded with only about R46,000 worth of shares changing hands on average each day. This makes it risky for private investors to buy a meaningful number of shares. However, on a P:E of 11.15 and a dividend yield of 7.18%, the shares look like good value. It was added to the Winning Shares List (WSL) on 8th February 2024 at 140c per share and has subsequently moved up to 175c.