This morning, investment holding company Remgro Ltd has caught my eye as a short to medium term trading opportunity.
At it's last reporting date, the company indicated that it's Intrinsic Net Asset Value Per Share (NAV) stood at R230.23. At yesterday's close of R169.92, this represents a 26% discount to NAV which is also one of the widest in recent years. Typically, investment holding companies trade at a 10-15% discount hence the current discount of 26% may present an opportunity for traders to purchase the share in anticipation of a narrowing of the discount to within a more normalized range. Technically, the price is trading at the lower boundary of a long term downward channel while the RSI is trending upward while the MACD has made a bullish crossover.
Trading Plan:
Buy REM at current levels (16992c) or better
To protect capital, use a stop-loss of 16440c
Take Profit Target of 18200c
At it's last reporting date, the company indicated that it's Intrinsic Net Asset Value Per Share (NAV) stood at R230.23. At yesterday's close of R169.92, this represents a 26% discount to NAV which is also one of the widest in recent years. Typically, investment holding companies trade at a 10-15% discount hence the current discount of 26% may present an opportunity for traders to purchase the share in anticipation of a narrowing of the discount to within a more normalized range. Technically, the price is trading at the lower boundary of a long term downward channel while the RSI is trending upward while the MACD has made a bullish crossover.
Trading Plan:
Buy REM at current levels (16992c) or better
To protect capital, use a stop-loss of 16440c
Take Profit Target of 18200c