ARTICLES

Karoo

In April 2018 – nearly seven years ago – we wrote an article about Cartrack. At the time we suggested that it was the ideal investment for private investors because it was a service company with debit order income and almost no working capital that was growing rapidly both locally and internationally. At the time the share was trading for just over R18.

Three years later in April 2021 the company was folded into a new listing called Karoo and by that time it was already trading at R500 per share. So, Karoo owns 100% of Cartrack and 74,8% of Karoo Logistics.

We added it to the Winning Shares List (WSL) on 26^th November 2024 at R760 and it has since gone up to where it closed on Friday at R924.50 – a gain of 21,7% in 45 days.

Consider the chart:

As you can see, the share was moving sideways for about three months between September and November 2024. When it broke up on 27^th November we added it to the WSL and it has been performing very strongly since then.

In its most recent financials for the six months to 31^st August 2024 the company reported earnings per share (EPS) up 31% to 735c. The company reported subscription revenue up 15% in rands and 22% in US dollars. The company added 89168 new subscribers to reach a total of 2 136 610 subscribers. This is a 17% growth in just six months.

Cartrack’s operating profit rose by 16% and Karoo Logistics saw operating profit growth of 20%.  The CEO, Zak Calisto, said of the second quarter:

“We delivered another strong quarter of profitable growth in the second quarter. Importantly, we recently completed the move to our newly built central office in South Africa, which positions us to support higher organic growth in the region. In addition, we started to increase our investment in sales and marketing in Southeast Asia to capitalize on the compelling growth opportunity for the group in the region.”

Clearly, this is one of those rare investment opportunities which offers private investors an excellent and almost risk-free opportunity to make significant long-term capital gains. The company is gaining recognition internationally as a powerful service business with almost unlimited “blue sky” potential. Overseas institutions are getting involved as can be seen by the rise in the average daily volume traded to R4,2m.

An investor who read our original article in April 2018 would by now have seen his/her capital increase thousands of percent. In addition, the company generally pays out good and rising dividends every year. We expect the growth to continue both locally and internationally.

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.