BROKERS’ NOTES: Buy Bidvest, sell AngloGold

Buy: Bidvest

Bidvest is one of South Africa’s big listed companies. It works a bit like a giant holding company with many different businesses under its umbrella. Main areas include cleaning, security, staffing, travel, freight/logistics, trading, distribution and financial services. The investment case for Bidvest holds up very well compared with other opportunities in our market, particularly on a risk-adjusted basis. This counter has outperformed over the long term but is still trading lower than its own long-term average on a forward p:e basis. The stock is on a current earnings multiple of 13 and has a dividend yield of 4.2%. This highlights two important points: the earnings delivery and the rerating that is likely to follow as Bidvest’s offshore pillar strategy manifests a more inherent earnings quality. The upside in this share is compelling and we would be buyers at the current level.

Sell: AngloGold

AngloGold Ashanti was formed in 1998, when Anglo American unbundled its gold mines (it had sold out completely by 2009). The company has made strong progress in narrowing the gap between its valuation and those of its  global peers, driven by consistent operational delivery and disciplined capital allocation. At its last set of results it reported a solid first half for 2025, with financial and operational performance significantly lifted by higher gold prices, steady production and decent cost control, despite inflationary pressure and higher royalties. The addition of the Sukari mine in Egypt boosted the result further. But the current gold price is high against all traditional measures (in real dollar terms, compared with real dollar interest rates relative to the cost curve of production and relative to other commodities such as oil and copper). With the stock up 177% in the year to date, gold has already priced in most of the bearish case for the dollar and potential stagflation. At current levels we would advocate taking money off the table.