ARTICLES

Imperial Logistics

Imperial (IPL) is a large international logistics company with 27 000 employees operating in 32 countries mainly in Africa and Europe. In is involved in transport, warehousing and international freight management. It is the largest logistics supplier in South Africa. The company is involved in five key areas - automotive, chemicals, consumer, healthcare and industrial.

The company recently split off and separately listed Motus (MTH) on the JSE in an effort to release shareholder value and focus more on its core businesses. It has also sold off its European shipping business for a net R3,6bn which has given it the cash that it needs to pursue its main objective which is to expand into Africa.

The company has not been greatly impacted by the COVID19 pandemic because its services are considered to be essential in most of the countries where it operates.

The company gets about 75% of its income from South Africa and the balance from the rest of Africa. It has identified the rest of Africa as a key opportunity and is intent on increasing that side of its business. Outside of those countries like Nigeria which supply oil, Africa has not been hugely impacted by COVID19 and should recover relatively quickly especially once a vaccine is developed.

Like most shares on the JSE, Imperial took a hit in March and April 2020 as a result of lockdowns especially here in South Africa. Consider the chart:

Here you can see the downward trend caused by the pandemic which was followed by a double bottom and a clear upside breakout. We regard this share as extremely well-managed and a company that has not been greatly impacted by the pandemic. It should recover quickly because it has plenty of cash to take advantage of cheap acquisitions in the wake of the crisis. It also has a growing rand hedge component as its business expands in Africa.

The share is trading on a dividend yield of 5,2% which will makes it attractive to institutions once COVID19 is substantially behind us. We see this as a good opportunity for private investors.  

DISCLAIMER

All information and data contained within the PDSnet Articles is for informational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet Articles are based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any comment or opinion for any reason.

PDSNET ARTICLES

Rand Strength

The strength of the rand is both a critical and a complex issue for private investors on the JSE. Our currency is influenced by two primary forces:

1. Our local economy’s prospects
2. The rand’s role as a leading emerging market currency

These, in turn, are

Sibanye Revisited

In these uncertain times, when nobody really knows to what extent Trump will back down on the international trade war which he has initiated, many investors are moving into precious metals as a hedge against the weakness of paper currencies (especially the US dollar) and paper assets like equities and bonds.

The problem

Smart Local Investors

The last two months have been wild on the markets – mainly because of Trump’s ill-advised, on-again, off-again tariff policies. The issue now is:

Will this morph into a full-blown bear trend? Or is this correction almost over?

From his election victory on the 6^th of November 2024,

Jerome Powell

The Federal Reserve Bank (“the Fed”) is completely outside the control of the President and Executive Branch of the US government. The chairman of the Fed is appointed for a renewable 4-year term by the President. The President cannot remove the Chair without cause. The current chairman, Jerome Powell was appointed by Trump during his first term as President and reappointed by

Uncertainty Soars

Investors are by their very nature risk takers, but they are always trying to reduce the risk which they have to take to a minimum. Donald Trump, with his threat of an international trade war and his on-again, off-again tariffs has significantly increased the level of risk in markets across the world. This can be seen in the extraordinary volatility in the S&P500

Liberation Day

Trump has done the unthinkable. He has deliberately engineered the collapse of the US and world stock markets in the nonsensical belief that somehow an international trade war will make Americans richer. Nothing could be further from the truth. His actions have taken the S&P down from its all-time record high of 6144.15 on 19^th February 2025 to Friday’s

The Creation of Money

The money supply of a country is a symbol of the goods and services of that country. Obviously, if the size of the money supply is increased more rapidly than the real growth of its economy, then you have more money chasing the same goods and services, resulting in rising prices. Since, over the long term, the only organisation that can create money is the government,

V-Bottom is likely

The 10% collapse of Wall Street, which is a direct result of Trump’s random policy of on-again, off-again tariffs, is very similar to what happened to Wall Street in February/March 2020 when investors tried desperately to accurately discount the impact of the COVID-19 pandemic.

Normally, corrections in the market

The Trump Correction

It is relatively unusual for the activities of American presidents or what they say to have an impact on the New York Stock Exchange, especially during their first 100 days in office. Trump, however, is the exception. His confused, on-again, off-again rulings on tariffs have rattled the market. Markets hate uncertainty and even Trump himself doesn’t appear to know exactly

Dividends

Investors know that the return on a share is made up of a capital gain plus the dividend. Private investors are mostly attracted to the prospect of making a capital gain on the shares which they buy and do not often consider the dividends. What they perhaps do not realise is that a capital gain is actually just the dividend in a different form.