By Chantal Marx, Pritu Makan, Sithembile Bopela, Zimele Mbanjwa, Motheo Tlhagale, Khumbulani Kunene
WeBuyCars
WeBuyCars is one of the largest used-vehicle dealers in South Africa. The business model includes vehicle acquisitions, selective reconditioning, and retail sales through both physical supermarkets and digital platforms. WBC moves more than 15 500 vehicles (predominantly nine years or older) through its operations per month. The company's offering includes passenger and commercial vehicles, motorcycles, trailers, caravans, and even boats.
The used-vehicle market in South Africa is a lot more defensive than the new-vehicle segment. South Africa's vehicle "parc" is growing and while new vehicle sales have done well in the last year, potentially higher interest rates near term may see buyers favour used vehicles again. The strategic acquisition of GoBid (49% equity stake) moves WBC into the salvage, non- runner, and insurance-damaged vehicle ecosystem- which is a highly profitable, counter-cyclical niche that complements its core clean-run wholesale and retail operations. It is set to deliver solid growth over the medium term and offers the group a new channel for volume expansion.
The company is still exposed to cyclical downturns, however and other risks to the business include an erosion of consumer trust in the brand and mounting competitive pressure. The aggressive pre-emptive investment in expanding the supermarket footprint (Montana, Lansdowne, and Witbank) has come at a high near-term capital cost and operating cash generation has been under pressure due to heavy working capital absorption.
The stock has derated meaningfully since early February after the founders of the business reduced their financial stake in the stock. While the timing coincided with the onset of the margin squeeze, we do not view this activity as indicative of any fundamental change in the investment case but rather a liquidity event following a lock-up period. Analyst activity was negative after the 1H26 print but still suggests substantial upside from current levels. The stock seems attractively price on a forward PE of 11.7 times with strong medium-term growth to come.
Cashbuild (CSB)
Cashbuild Limited operates as a prominent retailer within the building materials and associated products industry. Operations are divided across key retail platforms and brands, including Cashbuild, P&L Hardware, and Allbuildco, which offer diversified product categories such as cement, decorative items, roofing, timber, and bricks. Its geographic reach extends across Southern Africa, with a strong footprint and key markets located in South Africa, Eswatini, Lesotho, Namibia, and Botswana. Strategic positioning relies on a multi-brand retail model designed to target various customer segments across all Living Standards Measure (LSM) bands, supported by the acquisition of complementary hardware stores.
Cashbuild's financial performance over the last few years reflects a business operating in a difficult macroeconomic environment, with uneven demand, margin pressure and earnings volatility. Encouragingly, for the six months ended 28 December 2025, the group reported revenue of R6.3 billion (+3.5% y/y) and headline earnings per share (HEPS) of 675.2 cents (+17.9%), demonstrating notable resilience through a combination of store network expansion, strategic acquisitions and disciplined execution across both established and newly-entered geographies. During the period, the company acquired a 60% controlling interest in Allbuildco Holdings for R96.4 million, adding three Amper Alles stores to its portfolio, whilse disposing of its Malawian operations. This represents a deliberate reallocation of capital towards higher-return markets and differentiated customer segments that broaden the addressable opportunity set beyond the core Cashbuild franchise.
Although management expects trading conditions to remain challenging, the near-term outlook is encouraging, with group revenue for the subsequent seven weeks tracking 8% higher than the prior comparative period.
Cashbuild is currently trading at a meaningful discount relative to both its industry peers and its own historical valuation. By our estimates, the stock is valued at a 12-month forward PE of 8.4 times, well below its long-term average of approximately 12.1 times and significantly beneath the peer group average of 24.7 times. This disparity suggests the market is pricing in weaker growth prospects and/or lower profitability relative to competitors.
Primary Health Properties (PHP)
Primary Health Properties is one of the United Kingdom's (UK's) leading investors in modern primary healthcare facilities with a portfolio that currently has 1 142 primary healthcare facilities valued at £6 billion. A large portion of the healthcare facilities are general practice (GP) surgeries, with other properties let to National Health Service (NHS) organisations, Ireland's national health service provider - the Health Service Executive (HSE) - as well as pharmacies and dentists. The properties are let on long-term leases, backed by a secure underlying covenant where most of the rental income is funded directly or indirectly by a government body.
The group delivered a resilient FY25 result with better-than-expected earnings and dividend growth being bolstered by additional income arising from the combination with Assura, along with the solid performance of the underlying portfolio driven by organic growth from rent reviews and asset management activity in the year. The group also achieved its 29th year of continuous dividend growth with the recent quarterly dividend for FY26 marking the start of the company's 30th consecutive year of dividend growth.
Looking ahead, management is targeting rental growth in the future in excess of 3% per annum to continue to deliver sector-leading, risk-adjusted total property returns. The Assura portfolio increased overall exposure to private hospitals, with further progress being made on negotiations to put this portfolio into a new strategic joint venture to help reduce the group's leverage back to the target range of 40% to 50% and a government-backed income target of 80% to 90%. As a result, consensus has a very strong bullish bias towards the stock.
The company is trading on a forward distribution yield of ~7.9% and an ~10.6% discount to net tangible asset (NTA), which appears reasonable. We like the quality of the portfolio (enhanced by its defensive characteristics), the experienced and innovative management team, as well as its long-term focus combined with prudent risk management.
Altron (AEL)
Altron Limited is a technology-focused investment holding company founded in 1965. The group operates across three business segments: Platforms, IT Services and Distribution. Its principal businesses include vehicle tracking and fleet management (Netstar), digital payment and collection platforms (Altron FinTech), and healthcare information and transaction systems (Altron HealthTech), alongside enterprise IT services, cybersecurity and technology distribution. Altron has a primary operating base in South Africa, with international operations in Australia, the Middle East and Southeast Asia, supported by partnerships with global technology vendors.
Per Bloomberg aggregation, consensus remains bullish on the name with the current average target price for the counter at around R32.95 (~50% upside). Altron is trading on a PE of 8.4 times, a discount to its average rating over time. The share also offers an attractive 5.3% dividend yield.
Longer term, we agree with a higher rating given ongoing efforts to drive revenue and improve margins, along with some external tailwinds medium term, particularly in the Platforms business.
Sun International (SUI)
Sun International is a market-leading gaming, hospitality and entertainment group with a diversified, omnichannel operating model spanning land-based casinos, online betting and gaming (Sunbet), limited payout machines (Sun Slots), and a portfolio of iconic hotels and resorts. The group operates a high-quality, geographically diverse portfolio including prominent names such as Time Square, Grand West Casino, Carnival City and the Wild Coast Sun.
In terms of the regulatory environment and online gambling specifically, the group continues to advocate for a balanced framework that aligns the interests of operators, government, and consumers. Well-calibrated regulation is the most effective safeguard against the proliferation of illegal gambling and will be net positive for responsible and established players like Sun International.
Sun International is trading on a forward PE of 6.9 times, which is a discount to both its peer group and long-term average. Current consensus ratings are pricing in a 12-month target price of R59, an upside of 32% relative to current levels. The company also offers an attractive forward dividend yield of 10.6%.
