By Peet Serfontein & Jalpa Bhoolia
We initiate a long position with a target price of R35 and recommend a stop-loss at R29.50.
Quilter is a full-service wealth management company, providing investment advisory, financial planning, portfolio management as well as wrap platform solutions for both institutional and retail clients. These are delivered through both an advice channel (restricted and independent advisors) as well as an open-market channel (third-party independent advisors).
The company, which was known as Old Mutual Wealth Management before being unbundled in 2018, boasts a respectable track record of strong growth in net client cash flow (NCCF), assets under management (AUM), and revenue.
Technically, a price that is developing the fifth wave out of the Elliott Wave Price analysis, makes for an interesting long position (see the number notation on the chart as well as the insert). The pattern is characterised by a sequence of waves that follow specific patterns of advance (impulse waves) and retracement (corrective waves).
Wave 4 is typically a corrective wave, suggesting that the share has gone through consolidation or retracement after the earlier advance in Wave 3. The share is now preparing for a new upward movement in the form of Wave 5. Wave 5 is particularly important, representing the final uptrend and is often projected to reach certain price levels based on Fibonacci retracements or extensions.
The price is in the accumulation phase of the Wyckoff Price Cycle. This phase usually follows a market decline and precedes a bullish market reversal.
According to the Relative Strength Index (RSI), the stock will be overbought at ~R37, which classifies our profit target of R35 as realistic. We suggest a medium capital at-risk allocation to this trade.
Share Information
| Share Code | QLT |
|---|---|
| Industry | Financial Services |
| Market Capital (ZAR) | 44.19 billion |
| One Year Total Return | 65.82% |
| Return Year-to-Date | 36.12% |
| Current Price (ZAR) | 31.47 |
| 52 Week High (ZAR) | 34.46 |
| 52 Week Low (ZAR) | 17.42 |
| Financial Year End | December |
| The share made excellent progress year-to-date and over a one-year period. The share is trading above its 200-day simple moving average (SMA). | |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (GBP) | 0.O9 | 0.10 | 0.10 | 0.11 |
| Growth (%) | 4.26 | 6.12 | 7.69 | |
| Dividend Per Share (GBP) | 0.05 | 0.06 | 0.06 | 0.07 |
| Growth (%) | 11.54 | 10.34 | 9.38 | |
| Forward PE (times) | 14.09 | 13.28 | 12.33 | |
| Forward Dividend Yield (%) | 4.40 | 4.63 | 5.07 | |
| Sustained earnings growth over the medium term will provide the company with enough leeway to maintain an attractive dividend yield. | ||||
Rationale
Technical Analysis:
Fundamental view:
| Share Name and Position | WHL - BUY (Continue to hold) |
TBS - BUY (Continue to hold) |
N91 - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 60.82 | 224.91 | 40.62 |
| Current | 66.78 | 242.66 | 43.41 |
| Movement | +9.8% | +7.9% | +6.9% |
|
A price building a base remains of interest. Upside price momentum remains halted, which is a concern. Remains above its 200-day simple moving average.
Our profit target is at R71 with a trailing stop-loss at R63. Exit the trade on 25 November 2024. |
A price at major resistance remains of interest. Fading upside momentum is a concern. Remains above its 200-day simple moving average.
Our profit target is at R260 with a trailing stop-loss at R217.80. Exit the trade on 28 April 2025. |
A price that appears to form a base remains of interest. Upside momentum supports the strategy. Remains above its 200-day simple moving average.
Our profit target remains at R45 with a trailing stop-loss at R41.60. Exit the trade on 9 December 2024. |
| Share Name and Position | OMU - BUY (Continue to hold) |
SHP - BUY (Continue to hold) |
ANH - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 12.48 | 292.78 | 1153.11 |
| Current | 13.23 | 290.00 | 1130.00 |
| Movement | +2.3% | -0.6% | -2% |
|
A price building a base remains of interest. Upside price momentum remains halted, which is concerning. Remains above its 200-day simple moving average.
Our take profit target remains at R14.40 with a trailing stop-loss level at R12.80. Exit the trade on 17 December 2024. |
A price in a phase of low volatility remains of interest. Downside momentum is a concern. Remains above its 200-day simple moving average.
Our profit target is at R317 with a trailing stop-loss at R268. Exit the trade on 1 September 2025. |
A price that is developing an ascending triangle pattern remains of interest. Testing its 200-day simple moving average.
Our profit target is at R1289 with a trailing stop-loss at R1099. Exit the trade on 20 January 2025. |
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