24 May 2021 By PDSNET

Almost nine months ago we suggested that you take an interest in two shares – Massmart and Blue Label. We suggested that they would benefit from any sort of recovery in the South African economy. At the time, investors were running scared because of the fall-out from the pandemic and the resulting lockdowns. We quoted that famous saying by Warren Buffett – “Be fearful when others are greedy, and greedy when other are fearful”. Since then, both shares have performed well, but Massmart has shot the lights out. In September 2020, Massmart was in a terrible state.

Walmart had bought Massmart for R17bn ($1,54bn) in 2010 and had watched as the value of its investment fell to just R4,2bn by August 2020 following the lockdowns. They brought in Mitchell Slape, a Walmart executive and turnaround artist, to rescue the situation. Slape has made some sweeping changes including the sale of Dion Wired (23 stores), and the prospective sales of Cambridge Foods, Rhino Stores, The Fruitspot and Massfresh meat processing.

But in September 2020, what was most interesting about Mitchell Slape was that he personally bought 300 000 Massmart shares at an average price of R27.29, paying out R8,187m out of his own pocket. We drew your attention to this in this article published on 5th September 2020. We argued that Slape had by then had time to evaluate Massmart and was in an excellent position to make this investment. Consider the chart:

Massmart: November 2019 -  21 May 2021. Chart by ShareFriend Pro.

This chart shows the final collapse of Massmart down to its low of less than R20 a share in August 2020 and the subsequent recovery. Slape’s purchase of 300 000 shares was done at the perfect moment, just as the share broke above its longer-term downward trendline (not shown). Our article was written on the weekend of 5th/6th September 2020 when the Massmart price on the JSE was 3150c. Since then, the share has risen to R61 – which is a gain of 93,6% in under 9 months.

Notably, Blue Label has also performed reasonably well, rising from 320c to 436c, or 36,25% over the same time period:

Blue Label: August 2020 - 21 May 2021. Chart by ShareFriend Pro.

As a private investor you should always look on national and international calamities (such as the pandemic) as a potential opportunity to buy shares when they are cheap. Investors always over-react, both on the upside and the downside, giving you an opportunity to profit.


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.

Share this article:



Quality of management is a vital indicator for the private investor. High quality management is the best guarantee of future profits and sustainability in any share, especially in the volatile and unpredictable environment of South Africa. COVID-19 and the recent civil unrest have given investors a unique opportunity to evaluate the quality of management

Opportunity Knocks

As a private investor, you need to develop a view on where exactly you think the market is in its cycle – is it expensive and close to the top, cheap and close to the bottom or somewhere in the middle? There can be very little doubt that investors generally move from being optimistic about the future to being pessimistic - and back again

Capitalising on Chaos

The most dangerous man is the one who has nothing to lose. He is not afraid of imprisonment because at least there he will have a roof over his head, food and clothing. For the past 12 years South Africa has been bringing much of its population to that point of desperation. Unemployment, the lack of service delivery and extreme poverty have become endemic.


Our Aveng Story

On 22nd October 2018 we ran an article entitled “Speculating on Aveng”, ( click here to read it ), in which we suggested that buying R10 000 worth of Aveng at 5c a share might be a worthwhile speculation for private investors. As we said in the article, we do not usually advise

The Confidential Report - July 2021


The US inflation rate rose to 5% in May 2021 – up from April’s 4,2% and March’s 2,6%. At the same time, there is evidence that employee costs (i.e. wages) are rising at the rate of 2,8% on average. Employees are also changing jobs more rapidly with the “quit rate” rising to 2,7%. This shows that employees are moving

More Fundamentals

In last week’s article we suggested that it was important to understand where a company was in its financial cycle and to download its most recent financial results in PDF format. Since then, one of South Africa’s best and most iconic companies, Hudaco, has published its interim financial results for the six months to 31st May 2021 (

Fundamental Context

The assessment of shares is divided into fundamental analysis and technical analysis. The fundamentalist is trying to answer this question, “How good will this company be as a payer of dividends in the future ?” This requires an in-depth study of everything about the company starting with its most recent financials.

Market Action

In general, we encourage investors to take a medium to long-term view of the market and not to get involved in “trading” or intra-day buying and selling, especially in highly geared derivative instruments.

However, watching the intra-day progress of the S&P500 index and other indicators

Market Update

The S&P500 has virtually completed its seventh “mini-correction” on Friday the 4th of June 2021, since the V-bottom of the pandemic in March 2020. It exceeded its previous all-time high closing level of 4232.6, reaching an intra-day high of 4233.45. That it would probably go to a new record high was indicated by its record intra-day high

The Confidential Report - June 2021


In the previous Confidential Report on 5th May 2021, when the S&P500 index was at 4167, we suggested that it was probably due for a correction. Over the last month we have watched as a correction unfolded in that index. However, it turned out to be only a mini-correction of just 4% - and as we pointed out in our article,