PDSNET Market Snapshot

Altron is one of the best companies listed on the JSE and a long-time favourite of ours. We first added it to the Winning Shares List (WSL) back in November 2023 when the share was just 949c. Just over 2 years later in January 2025 it reached a high point of 2439c (10-1-25). After that it moved sideways for the next sixteen months and we only again became interested in it following its trading statement published on 12th February 2026 where it predicted that the headline earnings per share (HEPS) from on-going operations would increase by at least 30%.

After an investigation we decided to again add it to the WSL on 15th April 2026 at a price of 2199c. That was just 3 months ago, and the share has since gone up by an impressive 30% - which equates to about 125% per annum. Consider the chart:

This story is an object lesson in paying attention to the messages which listed companies regularly post on the Stock Exchange News Service (SENS) especially their trading statements. In a trading statement the board of directors give their best assessment of what the company’s HEPS will be in its next set of financial statements.

In Altron’s case their first trading statement was published more than 3 months before its financials came out on 25th May 2026. This gives the active private investor plenty of time to investigate thoroughly and even to visit the companies place of work and try to speak to one of its directors.

When the results finally came out, the share price shot up because they were truly exceptional in a number of respects. Firstly, HEPS from continuing operations rose by a solid 34% and secondly the company showed that they were completely debt-free and had more than R1bn in cash in the bank. As soon as the institutional fund managers saw those points and various other strong ratios in the company’s financials they immediately began buying up as many shares as they could lay their hands on. The result is that the share rose to a new record high of 3005 on 15th June 2026. Since then, it has been moving sideways.

My point is that everything that I have said in this article was in the public domain and you could easily have taken advantage of it. Hopefully, some of you did. The JSE regularly provides excellent highly profitable investment opportunities for those private investors who are willing to a little homework. Your Share Friend software gives you a complete up-to-date list of all the SENS messages published by every listed company every day. All you need to do in Share Friend is hold down the Alt key and press the letter “S”.

Follow-up

In last week’s article on candlestick charting as it is applied to the S&P500 index, I drew attention to the fact that the S&P was in a triangle formation and I suggested that it would almost certainly break out of that formation to the upside fairly soon. Well, it has now done that. Look at the chart:

In our view it will almost certainly now break to a new all-time record high very soon.

The most notable observation of the week was just how little the oil price went up when Trump decided to resume his bombing of Iran and the Strait of Hormuz was once again closed. Clearly the world economy and the stock market have moved on and the Strait can no longer influence the oil price or the world economy as it did in February.  

Long before the Western World had even understood that the study of charts might be beneficial, the Japanese were constructing and studying rice futures charts in a system which today we call candlestick charting. Before candlesticks charts, everyone was using bar charts but today you hardly ever see a bar chart.

What most investors do not know is that there are literally hundreds of candlestick formations each of which have been extensively analysed and have their own particular interpretations. If you are interested in this, you should get hold of a copy of Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East, (1991). The author of the book is Steve Nison.

In candlestick charting, each day’s trade is regarded as a battle between the bulls and the bears which is visible in the opening, highest, lowest and closing prices. So, the body of the candle connects the opening and closing prices. A red body shows that the share closed below the open and a green candle shows that the close was above the open. The shadows (i.e. the lines above and below the body) connect the highest and lowest prices that the share reached during the day’s trade.

Candlestick charting features many different types of candles which can help you to see which way the market is moving.

One of the less common ones is a doji star. This is a candle with a very thin body – in other words where the opening and closing prices are very close – but very long upper and lower shadows – which shows that during the trading day, sentiment swung heavily from being very positive to being very negative – but ended up almost unchanged on the day. Consider the example of a doji star below:

Doji stars usually occur at the top or bottom of a trend and are indication that the direction of the trend is about to change.  

Since the S&P500 reached its all-time high on 2nd June 2026 (at 7609.78), it has been in a triangle formation. Triangles are usually associated with periods of uncertainty, where the level of uncertainty diminishes until the market decides the future direction of the trend by breaking the upper or lower trend lines decisively. The chart below begins with the low point of Trump’s Iran war correction on the 30th of March 2026.   

Shortly after it started going up, the index had a clear hammer formation followed by a gap. The hammer is a very bullish formation which shows that in the battle between the bulls and bears on that day, the bears tried hard to pull the index down, but ultimately could not succeed and it ended slightly up on the day, with the bulls in the ascendancy. The gap which followed that on the next day shows the extent of the bullish sentiment. Then there was a smaller gap in May before the record high was reached.

You will notice that the index has been oscillating since then but that each oscillation has been smaller than the previous one, giving rise to a triangle formation. Last Thursday there was a clear doji star formation. We expect that the index will break up out of the triangle in the next few days.

Private investors should prefer to invest in service industry companies, especially those which derive a large proportion of their income from passive or annuity income. Such a companies typically require minimal working capital and are not burdened by a large unionised unskilled or semi-skilled labour-force.

If most of a company’s revenue comes from regular monthly payments (such as debit orders) then it will typically be profitable even before opening its doors each month. This contrasts sharply with most companies in manufacturing or retail which begin each month from zero and only reach profitability on the 24th or 25th. MTN is a service company which receives a very large proportion of its income from its existing client base in the form of regular payments.    

The company describes itself as a pan-African mobile operator whose purpose is "Leading digital solutions for Africa's progress". Most of its growth these days comes from its data and fintech offerings. It is an interesting company because its largest market is Nigeria and South Africa is only its third largest market. It also has strong markets in Ghana, Uganda and Rwanda.

It has shown itself to be very capable of dealing with Africa’s disparate and politically unstable administrations. This can be seen from its ability to take out large chunks of its profits from various countries. Thus, in the first three months of 2026 it “upstreamed” R2.3bn and generated a healthy corporate liquidity headroom of R42.6bn. After the end of the quarter, R2.7bn of cash was brought in from Nigeria and R5.3bn from Ghana.

In the first quarter of 2026, the company increased its subscriber base by 5,4% to 312,7m and the number of active data users increased by 8,7% to 175,6m. Data traffic was up 20,2% from the same quarter in 2025.

Fintech transactions were up 15,8% and the value of fintech transactions rose by 32,8%. Overall service revenue rose by 41,7% in Nigeria, 35,7% in Ghana, 14,4% in Cameroon and 18,3% in Cote D’Ivoire. All of this compares with South Africa’s paltry 0,7% increase in service revenue. The provision of data is by far the company’s largest contributor to service revenue growth and was up 34,5%.  

From this you can see that while South Africa is an important part of their business, the lion’s share of the growth is coming from elsewhere in Africa. This makes the company a higher risk, higher return investment than other mobile operators but gives it enormous blue sky potential.

In the year to 31st December 2025 the company reported service revenue up 22,9% and data revenue up 37,7%. Headline earnings per share (HEPS) rose by a massive 67% with total customers rising 5,6% to 307,2m. MTN is growing rapidly in line with the growth of the African continent.

The share has also demonstrated its virtual immunity to the war in Iran and the subsequent rise in the cost of energy world-wide. It continues to grow rapidly even though most countries are raising interest rates and tightening their fiscal belts.

Consider the chart:

The chart shows that MTN is in the process of recovering from a major downward trend which began in February 2022 when the war in Ukraine began. From a technical perspective the company completed an almost perfect reverse head-and-shoulders formation during 2024, finally breaking up through the neckline in mid-January 2025. Added to the Winning Shares List (WSL) on 15th January 2025 at a price of 9729c, it has subsequently risen to 23068c – a gain of 133,47% in 17 months. It also paid out a R5 dividend to shareholders for the 2025 year.

In our view, the spread of digital solutions in Africa is making the various African countries more reliable both politically and economically. They are no longer backwaters of progress and knowledge, but are able to share in the massive explosion of information that is sweeping the world. Africa has enormous resources of metals and minerals as well as proven agricultural potential. It is steadily catching up with the rest of the world economically and MTN is participating in that growth.