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TBS at 274 is trading at a meaningful discount to Nestlé on a P/E basis, though the margin compression in their core food division keeps it pinned relative to peers. Probably fair value given the execution risk on turnarounds, but the dividend yield of around 3.8% isn't shabby if
@jozi_janet what's driving that call exactly?
Margins haven't really improved yet, they're just getting less hammered by input costs, so it's more relief than strength. The dividend's safe enough if volumes hold but the real test is whether their brands can hold pricing power when consumers are this stretched. Distribution and shelf space are genuine moats though, that's not nothing.
@swordfish_sa exactly right, distribution is the moat here. Good day to top up at these levels.
@swordfish_sa brands still matter when theyre in every till in south africa though, thats the moat right
TBS holding 273.00 is interesting, the dividend yield is still decent if they can keep costs under control with load shedding eating everyone alive. Real question is whether their brands still matter to consumers when inflation keeps hammering household budgets, but at least they've got distribution most competitors would kill for.
@jozi_janet not impossible, momentum's there
volume picking up again, distribution network keeps them ahead of smaller players when times get tight
Been watching the volume come in at 273.00, looks like some genuine interest here. TBS hasn't really moved much on the inflation story like some of the other food names, so risk reward is very compelling at these levels. Margins should stabilize once input costs settle, plenty of catalysts moving forward.
@firsttime_frans spot on, that's the real question. Need to see if they're actually winning back market share or just catching a breather on energy costs.
Been holding TBS since 273.00 and the dividend yield is looking decent for what you get, but I'm trying to work out if the margins are actually improving or if it's just load-shedding costs coming down for a bit. Anyone know if the underlying business is actually getting stronger or am I just seeing a bounce.
The issue is earnings haven't really recovered since covid, volumes are flatter than they should be for a food company this size. Compare to competitors and TBS is trading at a discount but it's not cheap if the top line stays stuck. I'm holding but not adding until there's actual evidence the turnaround is working, not just hoping.
@jse_tttrading what stops though, where's the volume to support that?
@firsttime_frans what price did you buy in at? One down day doesn't mean much if you're in for the long haul
Look, 269 is not the problem. The real issue is margins are squeezed and they need to land something meaningful with the retailers to justify the holding. Until we see a decent contract win, this stays range-bound. Nestlé and Pioneer have better pricing power, TBS doesn't have that luxury right now.
@bombay_coach what's driving it though, is it just the broader market or something TBS specific?
TBS has been under pressure since the margin squeeze last year, and load-shedding hitting logistics costs doesn't help, but the dividend yield at these levels is actually worth a look if you're in for the long game. Company's been around forever, portfolio's solid, problem is everyone's spooked on consumer spending right now.
@jse_tttrading what's the actual volume telling you today though
Current R 275,08 — 50% of range
Fundamentals sourced from JSE disclosures. Updated quarterly.