Quilter plc 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, previously known as Old Mutual Wealth Management before having been unbundled in 2018, boasts a respectable track record of strong growth in net client cash flow (NCCF), assets under management (AUM), and revenue.
Technically, the share price appears to be forming a base (see the shaded rectangle on the main chart), evidenced by persistent sidewards movement in recent trade. This implies strong consolidation (and hence accumulation) of the share, which is usually a good indicator of an imminent bullish trend.
The share is testing its 200-day simple moving average of around R19.25. A further improvement in sentiment will attract more buying pressure and this will lead to further support of the bullish trend.
Fading downside momentum according to the MACD indicator supports our bullish stance. This is further emphasised by the sidewards movement of the OBV indicator, which suggests that money will continue to flow into the share.
Share Information
| Share code | QLT SJ |
|---|---|
| Industry | Financial Services |
| Market Capital (ZAR) | 26.66 billion |
| One year total return | -8.92% |
| Return year-to-date | 4.02% |
| Current price (ZAR) | 18.99 |
| 52 week high (ZAR) | 24.00 |
| 52 week low (ZAR) | 16.61 |
| Financial year end | December |
| Closing paragraph | We expect a further rebound in the share price going forward but remain wary in the face of moderate-to-high volatility. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (ZAR) | 1.75 | 1.93 | 2.08 | 2.23 |
| Growth (%) | 10.40 | 7.51 | 7.56 | |
| Dividend Per Share (ZAR) | 1.00 | 1.13 | 1.27 | 1.41 |
| Growth (%) | 13.40 | 11.73 | 11.52 | |
| Forward PE (times) | 9.46 | 8.76 | 8.53 | |
| Forward Dividend Yield (%) | 6.36 | 7.12 | 7.40 | |
| Closing paragraph | Sustained earnings growth over the medium term will provide the company with enough leeway to maintain an attractive dividend yield. | |||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position |
APN - Buy (Continue to hold) |
INL - Buy (Continue to hold) |
LHC - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 182.66 | 105 | 20.53 |
| Current | 188.74 | 104.95 | 20.30 |
| Movement | 3.3% | 0.0% | -1.1% |
| Summary text |
A developing symmetrical triangle pattern remains of interest. Trading continues above the 200-day simple moving average though upside momentum has halted.
Our profit target is R222, with a trailing stop-loss of R165. Exit the trade around 27 December 2024. |
The price is noteworthy based on the RRG analysis, particularly due to its ability to stay above the 200-day simple moving average. Upside momentum has halted, however.
Our profit target is R121, with a trailing stop-loss at R99. Exit the trade around 30 October 2023. |
The price appears to be in the upper range of a declining channel pattern, and this remains of interest. The share remains above its 200-day simple moving average. Downside price momentum is a concern.
Our profit target is R27, with a trailing stop-loss at R18. Exit the trade around 6 November 2023. |
| Share Name and position |
MTN - Buy (Continue to hold) |
DSY - Buy (Continue to hold) |
DCP - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 132.49 | 152.50 | 24.12 |
| Current | 128.53 | 146.79 | 23.23 |
| Movement | -3% | -3.7% | -3.7% |
| Summary text |
The share may be entering the third stage of the Elliot Wave pattern. Trading continues to test the 200-day simple moving average. Upside momentum has halted, however.
Our profit target is R190, with a trailing stop-loss at R113. Exit the trade around 6 November 2023. |
A developing symmetrical triangle pattern remains of interest. The share remains just above its 200-day simple moving average. Downside price momentum is a concern.
Take profit target set at R182. Trailing stop-loss at R135. Time to exit: 27 May 2024. |
The share continues to display early signs of a bullish divergence. The share remains below its 200-day simple moving average, indicating a counter-trend trade possibility.
Our profit target is R29, with a trailing stop-loss at R22.20. Exit the trade around 4 September 2023. |
