Our opinion on the current state of HUGE(HUG)Huge (HUG) is a telecommunications, media, and software company with operations in South Africa, Mozambique, Namibia, Lesotho, Swaziland, Botswana, Zambia, and Zimbabwe. It has the following main operating subsidiaries: Huge Cellular (49%), Huge Networks (50.03%), Huge Technologies (100%), Huge Telecoms (100%), Huge Soho (49%), Huge Media (96%), Huge Messaging (100%), and Huge Mobile (100%). The company is involved in payment connectivity, connecting payment terminals of merchants, ATMs, points of sale, telemetry applications, micro-lending, and medical script verification.
In its results for the year to 29th February 2024, the company reported headline earnings per share (HEPS) of 20.5c compared with 46.38c in the previous period. The company's net asset value (NAV) was 964.54c per share. The company said, "During FY2024 no Shares were issued or repurchased during the financial year. During FY2023 Huge Telecom sold 2 732 410 Shares at an average price of R3.3787 per Share. Huge Group repurchased 500 000 Shares at an average price of R2.9580 per Share. For the year ending 29 February 2024, Huge Group’s reported net asset value is R1 582 million, representing an almost 50-fold increase over a decade and demonstrating Huge Group’s ability to create exponential value."
Technically, the share produced a textbook triple top at around R10 and has been falling since then. At the current price of 233c, the share is on a multiple of 11.37. The average daily value traded is under R10 000, which is insufficient even for a small investment.
In our view, this share has definitely not yet attracted significant institutional interest and is still trying to establish itself in a competitive and fast-changing industry. It is profitable, but its earnings are volatile.
