PDSNET Market Snapshot

It is no secret that precious metals prices have been running. Most of the best-performing shares on the Winning Shares List (WSL) are mining companies with interests either in gold or platinum group metals (PGM). Gold in particular has dominated the investment world. The metal has risen 145% in US dollars since it broke up through resistance at $2060 at the beginning of March 2024, as reported in the Confidential Report of that month. Consider the chart:

As you can see here the break above resistance at $2060 sparked a strong upward trend. There was another period of resistance at $3424 in the middle of last year which was finally broken to the upside in early September. Gold may now, once again, be in for a period of consolidation, but the trend is clear.

The rising gold price is primarily due to central banks choosing to buy and hold gold as their most secure asset, rather than US Treasury Bills, despite the fact that gold offers no return. This is a testament to the rising levels of perceived geo-political risk in the world and gold’s ancient and undisputed status as the world’s most secure asset.  

AngloGold has been a great beneficiary of the rising gold price. In its latest financials for the year to 31st December 2025, the company reported a 16% increase in production combined with a 45% increase in the average gold price received. Costs were flat in real terms which generated a massive 186% increase in headline earnings.

The company's total cash costs increased 7% over the year to $1242 per ounce with all-in-sustaining costs (AISC) of $1709 – against a gold price of over $5000. This is an immensely profitable company. Total dividends paid for the year amounted to $1,8bn or 357c (US) per share – which is R57.19.

The company was originally formed to consolidate the gold interests of Anglo American in South Africa. Those interests included ERGO, Eastvaal, Southvaal, FreeGold, Elandsrand, Joel and Western Deep. Today, AngloGold owns no South African mines at all. It has 11 mining operations on 4 continents, and it has moved its head office to New York and its primary listing to the New York Stock Exchange (NYSE). Given that South Africa still has more than 5000 tons of proven underground gold reserves, this is a sad reflection of ANC’s hostile attitude towards the mining industry in this country over the past 30 years and what that has cost us.

We added AngloGold to the WSL on 5th March 2024 at a price of 38932c – mainly because we could see that gold was breaking up through that key level at $2060. Since then the share has risen to 179102c – a gain of almost 340% in 718 days or 172,6% per annum. Consider the chart:

AngloGold is constantly adjusting its portfolio, adding exciting new gold prospects while divesting itself of non-performing assets. During 2025 it acquired Centamin which is proving to be a great addition. It also made three further acquisitions in Nevada. These acquisitions have increased the company’s mineral reserve to 36,5 million ounces – a 17% increase on 2024. This means that the company will be able to continue mining profitably for many years, especially considering its very low cost of extraction.

In our view, this share is speculative because it is dependent on the international price of gold over which it has no control. But it is geographically diversified and extremely well managed with relatively low costs and minimal debt. We believe that it will continue to perform well.

In their latest financials for the year to 30th November 2025 Hudaco describes itself as “...a South African group specialising in the importation and distribution of a broad range of high-quality, branded automotive, industrial and electronic consumable products, mainly in the southern African region”.

It has long been one of our favourite shares on the JSE and we have written two articles extolling its virtues the first on the 7th February 2021 and the next on the 14th of February 2022. It is essentially an investment in the growth prospects of the South African economy. It is not a dramatic performer, but rather a company that is growing steadily both organically and through careful bolt-on acquisitions.

It is well worth taking the time to read their latest financials for the year to 30th November 2025. The fundamentals revealed in their figures should make any investor in their shares feel happy.

Their turnover for the year increased by 4,4% - which is barely above the inflation rate but still shows growth in real terms. What is impressive, however, is that out of that turnover, they managed to increase their operating profit by 8,9% and their headline earnings per share by 15,7% - and this is after taking a R104m goodwill impairment. Their return on equity (ROE) for the whole group was 17% and would have been 19,5% without the impairment. This shows that they kept costs tightly controlled while improving efficiencies across the board – in other words, that they have excellent management.

During the year the company made two acquisitions – Isotec and Flosolve – both of which have now been integrated into the business. Their results are only included for six and seven months respectively – so we can expect them to have a much greater impact on the current year’s results.

Consider the chart:

The chart shows that following COVID-19, Hudaco reached a low point of 5616c on 25th May 2020. Since then it has been rising steadily. We wrote about it in our article on 7th February 2021 by which time the share has reached 10046c and then again, a year later, on 14th February 2022 when it was at 15762c. Since then, the share has climbed to 20680c and looks poised to go higher.

This business supplies a variety of products to the mining industry and so is benefiting indirectly from the rising prices of platinum group metals (PGM), gold and copper. They are also benefiting from the on-going reduction of interest rates and the falling cost of petrol in South Africa which directly impact on the profits of their customers.  

The current price/earnings ratio (P:E) is only 8.9 which is roughly half of the JSE’s average P:E of 16,8. This shows that its value is not yet fully appreciated by institutional investors.  With an average daily volume traded of more than R3,5m, Hudaco is certainly more than adequate for private investor requirements and can now accommodate small institutional investments comfortably.

We expect this share to continue to grow, especially considering its proven track record of conservative and effective management combined with its policy of making regular bolt-on acquisitions. If you are positive about the prospects of the South African economy in the medium term, then this share is well worth your consideration.

Many private investors shy away from IT shares because they can be difficult to understand.  Their business models are often highly complex making it problematic to accurately assess their fundamental risk. Datatec is an international IT and telecommunications company with operations in more than 50 countries world-wide which makes it even more challenging as an investment. My response to this type of complexity is to look at the results and the people involved.

In its results for the six months to 31st August 2025 the company reported gross invoiced income up 9,4% and headline earnings per share (HEPS) up 109,5%. Clearly, this company is growing its turnover while at the same time hugely improving its operational efficiency.

Because of its international footprint, Datatec offers the investor a rand-hedge. It is also obviously benefiting from the world-wide move towards artificial intelligence (AI). It makes a gross margin of 26.3% and its operating costs are coming down. By bringing down its net debt the company has reduced its finance costs by 27.1%. From an investor’s perspective this makes buying the shares far less risky. Companies with plenty of “headroom” have the cash to avoid problems and take advantage of opportunities.  

Its business is divided into three main divisions - technology distribution through Westcon International, integration and managed services through Logicalis, and consulting and financial services through Datatec Financial Services and Analysys Mason.

Consider the chart:

The chart shows that Datatec had an extended period of sideways movement between April 2023 and October 2024. Then it began to move up strongly. We added it to the Winning Shares List (WSL) 26th October 2024 at a price of 3950c, when it began showing signs of structural improvement and it has since gone up to 7781 – a gain of 97% in 15 months. We believe it will continue to perform well as AI becomes more ubiquitous.

Jens Montanana is the CEO of Datatec and has been in that position since the company listed on the JSE more than thirty years ago. His drive and energy are what taken the company up to a market capitalisation of R12bn. Montanana says that “...the growth of interconnected digital communities and increased IT complexity drove infrastructure demand in networking and cybersecurity”. Now I will be first to admit that I do not understand the implications of that statement – but I know growth and financial stability when I see it.

The rapid rise of artificial intelligence (AI) has forced businesses to implement the technology within their operations if they are to remain competitive. Datatec is riding that wave.

Obviously, this is a company which is dominated by Montanana and that does make it vulnerable to his inevitable retirement at some stage. However, we believe that Datatec has built a very solid international; presence which will continue to provide it with growth opportunities in the future whoever is in charge.

It is not one of the fastest growing shares on the JSE, but it has been a very steady performer since we added it to the WSL.