A member on the Mailing list asked my opinion on Primeserv (PMV) and below was my reply. Maybe someone else has more insights to add.
Reply 13 June 2020, 10:41 PM
I had a quick scan through most of their news, financials, updates, and had a look at their charts.
It looks to be a decent company, with reasonable results throughout. It is a holding company, for which you actually need to know the inner parts that form the group and the valuations of each company in the group. Holding companies usually trade at a discount to their NAV, and currently, that is at R1-80. So pretty big discount at 85c, but I did not dig deep to analyze every company in the group. These Net Asset Values are based on their own valuations, so it will be up for scrutiny.
With their latest SENS release, they stated a 30c earnings for the full year. This being a smallcap holding company, their PE's typically range between 2-5 PE (even 1,5 in some cases). So a price range between 60c to R1-50 can be expected and the 85c is about right for where we are currently in the cycle.
Being that it is a small-cap company, it is very illiquid. I could not use the data properly because on the 17th of July 2017 it jumped by 60% from 56c to 90c and stayed there for 5 trading days with no volume. My program uses these upper trading limits to identify and predict future highs, but this is not a good indication for future reference.
Because of its very low market cap, you will have a problem buying and selling your shares on the open market. There are many days where no trades are done and this is a concern.
I had a look at the charts and PMV has re-entered its bull trend on the 14th of April and broken a seller's resistance on the 3rd of June 2020. These are both positive signs, but I do not have enough information to make an informed opinion on current or future valuations, nor will my program be accurate with the limited data.
I am also not sure how this pandemic will affect their business in the medium and long term.
Overall it's not a very exciting share for me. But if I had an order in the market to buy at, say 60c, just maybe someone would be willing to part with their shares at a healthy discount to me, and it could be kept for the dividends. But there are many other shares that excite me more. Just my 2cents.