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4Sight

29 January 2024 By PDSNET

The world has, in the last twenty years, entered what has been characterised as the 4^th Industrial Revolution (4IR). It has been described as “... the biggest structural change of the past 250 years — a transformation of scale, scope and complexity unlike anything humankind has experienced before.” In simpler terms, 4IR refers to the digital convergence of artificial intelligence (AI), the Internet of things (IOT), robotics and cloud computing. 

The importance of 4IR was perhaps best illustrated by the announcement of Tesla’s Optimus Gen 2 humanoid robot in December 2023. This robot is specifically designed to operate in and learn from a world which is designed for people. It has the physical form and capabilities of a human being, but with greater strength and endurance.

Elon Musk suggests that within a relatively short time there will be millions of humanoid robots in the world performing thousands of boring, repetitive or dangerous tasks which are currently done by people. This development is at once both exciting and frightening since it will revolutionise almost every aspect of human behaviour. 4IR aims to increase productivity in all areas of human endeavour.

The only company listed on the Johannesburg Stock Exchange (JSE) which is specifically exploiting the shift to 4IR directly is 4Sight (4SI). 4SI listed on the JSE in October 2017, but only began to attract the attention of investors towards the end of last year. We added it to the Winning Shares List on 5^th August 2023 at a price of 31c and it has since risen to 72c. Consider the chart:

 

The company operates through four “clusters”:

1. Operational Technologies - 4IR technologies and services to help industrial customers with their full end-to-end digital transformation journey.
2. Information Technologies - enabling the digital transformation of ERP, accounting, human resources, and payroll disciplines.
3. Business Environment - partners with customers to drive value-creating digital transformation in specific areas of the business.
4. Channel Partner - supporting and empowering an ever-expanding channel of value-added resellers across Africa, the Middle East, and Central Europe.

In its results for the six months to 30^th June 2023, the company reported revenue up 37,1% and headline earnings per share (HEPS) up 197,2%.

The company’s balance sheet shows a healthy cash balance of R93m, up 33% on the previous comparable period.

In our view, this is a company growing rapidly on the back of the latest developments in computers and the internet. The only real problem with investing in a share like this is understanding exactly what it is that they do – but they are clearly very successful and expanding quickly.

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Powells Punch

In November last year we wrote the following about the U.S. economy in the Confidential Report:

“…what if the Fed is wrong about inflation and it persists at the current high levels or even increases? September was the 5^th month where inflation was above 5%. If they are wrong, then they will need to raise interest