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Our opinion on the current state of TRANSCAP(TCP)Transaction Capital (TCP) is a South African company with two primary divisions: minibus taxis and risk services, following the unbundling and separate listing of WeBuyCars (WBC). Its subsidiary, SA Taxi, is deeply integrated into the minibus taxi industry, offering financing, repairs, insurance, and vehicle sales. This vertical integration enables SA Taxi to dominate the value chain associated with minibus taxis, a vital mode of transport for over 69% of South African households, facilitating more than 15 million trips daily. The industry, being non-discretionary, is traditionally defensive and less susceptible to broader economic downturns. However, in recent years, SA Taxi faced severe challenges due to rising interest rates, elevated fuel prices, increased costs of maintenance, and declining commuter volumes amid economic pressures. To mitigate losses, SA Taxi halted the financing of new Toyota minibus taxis, focusing instead on refurbished second-hand vehicles. This shift in strategy follows a R1.8bn bad debt provision and the decision to scale back from financing 600 new vehicles per month to selling around 200 refurbished taxis monthly. As of 2023, SA Taxi was owed R17bn by taxi owners, many of whom were struggling to meet repayments due to increased operating costs and reduced passenger numbers. The Transaction Capital Risk Services (TCRS) division operates in South Africa and Australia, specializing in debt collection. The company sold its Australian holdings in Nutun for A$58.3m to strengthen its balance sheet. The company has undergone significant leadership and structural changes. CEO David Hurwitz resigned effective 31st December 2023, and the successful listing of WeBuyCars allowed TCP to return R5.2bn to shareholders and raise an additional R1bn. Despite these moves, the company remains under significant pressure. In its results for the six months ending 31st March 2024, TCP reported revenue of R981m, down from R1.295bn, and a headline loss of 164.9c per share, improving slightly from the 224.6c loss in the previous period. The full-year trading statement for 30th September 2024 estimates a headline loss of 279.6c to 302.2c per share, compared to a restated loss of 231.9c in 2023. On a positive note, the balance sheet reflects minimal debt and a R100m net cash position at year-end. Outlook Much of TCP’s future depends on the recovery of the South African economy following the 2024 elections and the anticipated growth from the Government of National Unity (GNU). While the company is working to stabilize its operations, particularly in SA Taxi, and strengthen its balance sheet, the share remains highly risky and challenging to evaluate, given the uncertain economic landscape and the evolving challenges within its core markets.
JSE:TCP
by PDSnetSA
Our opinion on the current state of Transaction Capital (TCP) is a company with two divisions—minibus taxis and risk services. It has unbundled and separately listed WeBuyCars (WBC). Its subsidiary, SA Taxi, specializes in financing, repairing, insuring, and selling minibus taxis in South Africa and completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1.8 billion provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15 million trips per day. Most of this is non-discretionary, which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1.7 billion in 2018, which is benefiting both parties. The directors of TCP own 32% of the company. The company is also involved in debt collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). Following the impact of COVID-19, the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs, and lower consumer spending resulting in a massive increase in TCP's bad debt provision. The average taxi owner was unable to afford to make repayments of around R6000 a month in the face of steep increases in the fuel price, rising interest rates, and declining commuter traffic. The result was that SA Taxi stopped financing and buying as many as 600 new Toyota minibuses a month and was reduced to selling between 180 and 200 refurbished taxis. The company was owed about R17 billion by taxi owners, most of whom were behind on their repayments. On 15th March 2023, the company reported that the controlling Hurwitz family trust had sold 1.6 million shares in December 2022. In a report in the Business Day on the 12th of December 2023, the company reported that it will no longer finance new minibus taxis—only second-hand ones. SA Taxi attributes its problems to: "...elevated fuel prices, high interest rates, increasing cost of parts and maintenance, record levels of load shedding, persistently lower commuter volumes as a result of depressed economic activity, and taxi operators' inability to increase fares given already financially stretched consumers." On 12th September 2023, the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. On 22nd March 2023, the company announced that it had sold its holding in Nutun Australia for A$58.3 million. On 11th April 2024, with the separate listing of WeBuyCars, the Transcap share fell to 361c as expected. In its results for the six months to 31st March 2024, the company reported revenue of R981 million down from R1.295 billion and a headline loss of 164.9c per share compared with a loss of 224.6c in the previous period. The company said, "The key highlight of the half year ended 31 March 2024 ('H1 2024') was the successful unbundling, placement, and separate listing of WeBuyCars on the main board of the JSE Limited ('JSE'). This allowed Transaction Capital to return R5.2 billion to shareholders through the distribution of 256.3 million WeBuyCars shares. The group further raised R1.0 billion via the placement." In our view, the share remains risky and difficult to assess. Much will depend on growth in the South African economy following the elections.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TRANSCAP(TCP)Transaction Capital (TCP) is a diversified company that operates three divisions: minibus taxis, risk services, and holds a 75% stake in WeBuyCars (WBC). Its subsidiary, SA Taxi, dominates the value chain of the minibus taxi industry in South Africa, handling financing, repairs, insurance, and sales. Since its listing in June 2012, TCP experienced a significant compound annual growth in earnings per share of 21% from 2014 until an abrupt halt in 2023 due to a R1.8 billion provision for bad debts in the minibus taxi division. The minibus taxi industry is crucial in South Africa, with 69% of households relying on taxis for more than 15 million trips daily. These trips are mostly non-discretionary, which typically shields the industry from economic downturns. However, recent challenges such as rising interest rates, increased fuel costs, and decreased consumer spending have led to a perfect storm, significantly impacting TCP’s finances. The average taxi owner struggled with repayments around R6000 per month amidst these rising costs, leading to SA Taxi reducing its new vehicle financing and focusing on selling refurbished taxis. In 2018, the South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1.7 billion, which has been mutually beneficial. Yet, the company’s broader financial health has been shaken, as evidenced by the considerable bad debt provisions and a reported headline loss of R3.7 billion for the year to 30th September 2023. This loss included a R1.1 billion write-down of repossessed taxis. The future of SA Taxi hinges on renegotiating terms with its debt funders, expected by March 2024. On the corporate front, significant shareholder changes occurred with Coronation increasing its stake to 16.57% in March 2023, and the Hurwitz family trust selling 1.6 million shares in December 2022, which preceded a sharp decline in share price. Additionally, CEO David Hurwitz announced his resignation effective 31st December 2023, further impacting the company's share price. In response to the ongoing challenges in the taxi division, TCP announced a strategic shift in January 2024 to unbundle and separately list WeBuyCars. This decision followed the poor performance in the taxi business throughout 2023. Following the unbundling, WeBuyCars demonstrated a positive trajectory with a 16% increase in revenue and a 20% rise in core earnings over four months, indicating potential as a solid standalone entity on the JSE. Further reshaping its portfolio, TCP sold its holding in Nutun Australia for A$58.3 million in March 2023. As of April 2024, following the separate listing of WeBuyCars, the TCP share price adjusted to 361c, reflecting the market’s reaction to the restructuring. This array of strategic moves and market challenges paints a complex picture for TCP. While the company faces significant hurdles, the strategic divestiture and focus on potentially more profitable segments like WeBuyCars could provide a foundation for recovery and future growth, presenting what could be an appealing investment opportunity at current valuations.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and 75% of WeBuyCars (WBC). Its subsidiary, SA Taxi, specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. The average taxi owner was unable to afford to make repayments of around R6000 a month in the face of steep increases in the fuel price, rising interest rates and declining commuter traffic. The result was that SA Taxi stopped financing and buying as many as 600 new Toyota minibuses a month and was reduced to selling between 180 and 200 refurbished taxis. The company was owed about R17bn by taxi owners most of whom are behind on their repayments. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results presented a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the year to 30th September 2023 the company reported a headline loss of R3,7bn mainly because of a R1,1bn write down of repossessed taxis. Much now depends on SA Taxi's debt funders and it is expected that a deal with them to re-finance will be in place by March 2024. WBC earnings fell by 14% and Nutun's earnings increased by 10%. The group made a headline loss of 99c per share down from the previous year's profit of 224,4c. In a report in the Business Day on the 12th of December 2023, the company reported that it will no longer finance new minibus taxis - only second hand ones. SA Taxi attributes its problems to: "...elevated fuel prices, - high interest rates, - increasing cost of parts and maintenance, - record levels of load shedding, - persistently lower commuter volumes as a result of depressed economic activity, and - taxi operators' inability to increase fares given already financially stretched consumers." Hopefully, if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. On 13th May 2023 we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and wait for a break above that. That happened on 6th November 2023 at 577c per share. Since then it has moved up to 826c - a gain of over 43% in 3 months. On 12th September 2023 the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. The news caused the share price to drop sharply. We see this share as a potential turnaround that is probably cheap at current levels. On 31st January 2024 the company announced that it intended to unbundle and separately list WeBuyCars due to the poor performance of the taxi business in 2023. On 19th March 2024 the company announced that they had raised R902,7m through the issue of 40m new WBC shares and the sale of 8,145m WBC shares by Transcap. It also reported that during the 4 months WeBuyCars had increased revenue by 16% and core earnings by 20%. The company said, "Revenue continues to grow in line with the growth in number of vehicles sold as the existing branch network matures. WBC is consistently expanding its market share in a highly fragmented market." Our view is that WeBuyCars will be a solid investment when it comes to the JSE.
JSE:TCP
by PDSnetSA
UPDATE: Transaction Capital on its way to the 2nd target R11.53Two formations occured with TCP. The first one was a W Formation which broke above the neckline and headed to the target 1 of R6.88. The second, was yet another W Formation which the price broke above the neckline. And it was considered in the HIgh Probability trading range as the price was above both 20MA and 200MA for the first time in a long time. SInce then the trajectory has been smooth sailing up. Target remains at R11.53.
JSE:TCPLong
by Timonrosso
UPDATE: Transaction Capital heading up to target 2 - R11.53Transaction Capital has been the come back duck since October. It's reached the first target of R6.88 in December. It then moved in a consolidation sideways pattern that formed a W Pattern. Since it broke above the neckline, the momentum has been on fire. This is just an update that the price is on its way to the next target at R11.53. UPDATE: Transaction Capital aims to generate between R900 million and R1.25 billion through the sale and issuance of shares in WeBuyCars. Preceding the proposed separation and independent listing of the successful second-hand car dealership. The strategy includes offering new shares to the asset manager Coronation, along with the issuance of additional shares for acquisition by new investors, which will result in a reduction of Transaction Capital's stake in WeBuyCars from 74.9% to a range of 57% to 67%.
JSE:TCPLong
by Timonrosso
Our opinion on the current state of TCPTransaction Capital (TCP) is a distinguished player in South Africa's financial sector with its three main divisions: minibus taxis, risk services, and a 75% stake in WeBuyCars. Its subsidiary, SA Taxi, leads in financing, insuring, and selling minibus taxis, effectively monopolizing the minibus taxi industry's value chain. Since its listing in June 2012, TCP demonstrated robust growth, with an annual compound growth in earnings per share of 21% up to 2023. However, the company faced a significant challenge in 2023 with a R1.8 billion provision for bad debts in its minibus taxi division, amidst the backdrop of rising interest rates, fuel costs, and diminished consumer spending. Despite these challenges, the company's diversification, including its involvement in debt collection through Transaction Capital Risk Services (TCRS) in South Africa and Australia, underscores its resilience. The minibus taxi industry's critical role in South Africa's transportation ecosystem, with over 15 million trips per day, highlights the defensive nature of this sector, though it has not been immune to the economic pressures exacerbated by COVID-19 and other factors. The Hurwitz family trust's share sale in December 2022 and the subsequent halving of TCP's share price, along with Coronation's increased stake in the company to 16.57%, indicate fluctuating investor confidence. The year to 30th September 2023 brought further challenges, with the company reporting a headline loss of R3.7 billion, largely due to a R1.1 billion write-down of repossessed taxis. The future of SA Taxi hinges on refinancing deals expected to be concluded by March 2024. The decision to cease financing new minibus taxis, focusing solely on second-hand ones, reflects a strategic shift in response to the myriad pressures facing the industry. These challenges include fuel prices, interest rates, maintenance costs, load shedding, and depressed commuter volumes, compounded by operators' inability to hike fares. Despite these setbacks, the planned unbundling and separate listing of WeBuyCars, which reported a 16% revenue increase and a 20% rise in core earnings during the four months to 31st January 2024, presents a new growth avenue. This move suggests Transaction Capital's adaptability and potential for recovery. TCP's share price recovery since November 2023, following the application of a 65-day exponentially smoothed moving average strategy, signals potential for a turnaround. With WeBuyCars' impending IPO and its solid performance, TCP's strategic adjustments offer promising prospects for investors, marking it as a potentially undervalued opportunity for those looking for a stake in South Africa's resilient sectors.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) operates through three distinct divisions: minibus taxis, risk services, and a 75% ownership stake in WeBuyCars. One of its key subsidiaries, SA Taxi, specializes in financing, repairing, insuring, and selling minibus taxis in South Africa, effectively dominating the entire value chain associated with this industry. The company went public in June 2012, and from that time until 2023, it had consistently achieved an annual compound growth in earnings per share of 21% since 2014. However, this growth trajectory experienced an abrupt interruption in 2023 when TCP disclosed a R1.8 billion provision for bad debts in its minibus taxi division. It's essential to recognize the significance of the minibus taxi industry in South Africa, with approximately 69% of households relying on taxis for transportation, resulting in over 15 million daily trips. This industry primarily caters to non-discretionary needs, making it relatively defensive and less influenced by the broader economic climate. In 2018, the South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1.7 billion, a mutually beneficial arrangement. Notably, the directors of TCP collectively hold a 32% ownership stake in the company. TCP has demonstrated a consistent compound growth in earnings of 20% per annum over the past five years, with a minor disruption caused by the COVID-19 pandemic. Additionally, TCP operates in debt collection services in both South Africa and Australia through Transaction Capital Risk Services (TCRS). However, it is evident that the taxi industry has faced significant challenges, including rising interest rates, escalating fuel costs, and reduced consumer spending, leading to a substantial increase in TCP's bad debt provision. Many taxi owners, facing monthly repayments of around R6000, are struggling to meet their financial commitments in the wake of soaring fuel prices, higher interest rates, and reduced commuter traffic. Consequently, SA Taxi has curtailed its financing and acquisition of new Toyota minibuses, now focusing on selling refurbished taxis, with outstanding debt from taxi owners totaling around R17 billion, with many falling behind on payments. On March 15, 2023, the controlling Hurwitz family trust disclosed the sale of 1.6 million shares in December 2022, a move that coincided with a 50% drop in TCP's share price. Despite these challenges, some investors viewed the sell-off in TCP shares as an opportunity, especially after the sharp 40% decline following the release of its results. Notably, Coronation increased its holding in TCP to 16.57% of the issued shares, as reported on March 23, 2023. TCP reported a headline loss of R3.7 billion for the year ending on September 30, 2023, mainly attributed to a R1.1 billion write-down of repossessed taxis. The company's prospects now heavily depend on the re-financing agreement with SA Taxi's debt funders, expected to be finalized by March 2024. We Buy Cars experienced a 14% decline in earnings, while Nutun's earnings increased by 10%. Overall, the group reported a headline loss of 99 cents per share, a sharp contrast to the previous year's profit of 224.4 cents per share. A Business Day report on December 12, 2023, indicated that TCP would no longer finance new minibus taxis, opting to focus solely on second-hand vehicles. SA Taxi attributed its challenges to various factors, including elevated fuel prices, high interest rates, rising parts and maintenance costs, record levels of load shedding, persistently lower commuter volumes due to economic slowdown, and taxi operators' inability to raise fares given consumers' stretched financial circumstances. For investors, it may have been opportune to exit TCP shares back in May 2022 when they were trading above R40 per share. On May 13, 2023, a recommendation was made to apply a 65-day exponentially smoothed moving average to the Transcap share price and wait for a break above that level. This occurred on November 6, 2023, at 577 cents per share, subsequently rising to 800 cents, marking a gain of over 38% within one month. On September 12, 2023, TCP announced the resignation of its CEO, David Hurwitz, effective December 31, 2023, which led to a sharp drop in the share price. Despite the challenges, TCP is viewed as a potential turnaround opportunity and may be considered undervalued at current levels. On January 31, 2024, TCP announced its intention to unbundle and separately list WeBuyCars due to its underperformance in 2023.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and 75% of WeBuyCars. Its subsidiary, SA Taxi, specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. The average taxi owner cannot afford to make repayments of around R6000 a month in the face of steep increases in the fuel price, rising interest rates and declining commuter traffic. The result has been that SA Taxi has stopped financing and buying as many as 600 new Toyota minibuses a month and is reduced to selling between 180 and 200 refurbished taxis. The company is owed about R17bn by taxi owners most of whom are behind on their repayments. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results presented a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the year to 30th September 2023 the company reported a headline loss of R3,7bn mainly because of a R1,1bn write down of repossessed taxis. Much now depends on SA Taxi's debt funders and it is expected that a deal with them to re-finance will be in place by March 2024. We Buy Cars earnings fell by 14% and Nutun's earnings increased by 10%. The group made a headline loss of 99c per share down from the previous year's profit of 224,4c. In a report in the Business Day on the 12th of December 2023, the company reportred that it will no longer finance new minibus taxis - only second hand ones. SA Taxi attributes its problems to: "...elevated fuel prices, - high interest rates, - increasing cost of parts and maintenance, - record levels of load shedding, - persistently lower commuter volumes as a result of depressed economic activity, and - taxi operators' inability to increase fares given already financially stretched consumers". Hopefully, if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. On 13th May 2023 we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and wait for a break above that. That happened on 6th November 2023 at 577c per share. Since then it has moved up to 800c - a gain of over 38% in one month. On 12th September 2023 the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. The news caused the share price to drop sharply. We see this share as a potential turnaround that is probably cheap at current levels.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and 75% of WeBuyCars. Its subsidiary, SA Taxi, specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results presented a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the year to 30th September 2023 the company reported a headline loss of R3,7bn mainly because of a R1,1bn write down of repossessed taxis. Much now depends on SA Taxi's debt funders and it is expected that a deal with them to re-finance will be in place by March 2024. We Buy Cars earnings fell by 14% and Nutun's earnings increased by 10%. The group made a headline loss of 99c per share down from the previous year's profit of 224,4c. The company will no longer finance new minibus taxis - only second hand ones. SA Taxi attributes its problems to: "...elevated fuel prices, - high interest rates, - increasing cost of parts and maintenance, - record levels of load shedding, - persistently lower commuter volumes as a result of depressed economic activity, and - taxi operators' inability to increase fares given already financially stretched consumers". Hopefully, if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. On 13th May 2023 we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and wait for a break above that. That happened on 6th November 2023 at 577c per share. Since then it has moved up to 800c - a gain of over 38% in one month. On 12th September 2023 the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. The news caused the share price to drop sharply. We see this share as a potential turnaround that is probably cheap at current levels.
JSE:TCP
by PDSnetSA
UPDATE TCP target reached at R6.88 next target R11.00Since the last update, Transaction Capital made a breakaway gap. It then reached and tested the supports and bottoms at R4.06. Once it tested, it formed a Rounding Bottom and was shown to be buying from Smart Money. This sent the price flying up to close the gap and to the first target of R6.88. With the gap closed, we can now see a new formation (Rounding Bottom 2) forming. And if the price stays above R6.88, the next target will be at R11.00. I'm bullish with TCP.
JSE:TCPLong
by Timonrosso
Transaction Capital Glimmer of hope to R6.88Transaction Capital has had a tough year. Between the CEO stepping down and with the market being in free fall. In September the price made a Breakway way, this signalled more selling and supply to bring down the price. Now we have seen a slight recovery pattern (Cup and Handle). This shows that the price is going to head up to fill the gap at around R6.88. Once it reached this level, we'll get more of an idea of where the price is more likely to go. Right now, it looks more bullish in the short term.
JSE:TCPLong
by Timonrosso
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and WeBuyCars. It specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company has excess capital of R1bn. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results may present a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the six months to 31st March 2023 the company reported a headline loss of 183,3c per share compared with a profit of 71,9c per share (restated) in the previous period. The company said, "After accounting for the restructure of SA Taxi, Transaction Capital is comfortable that its balance sheet remains sufficiently capitalised and debt covenant levels remain intact. WeBuyCars and Nutun have robust balance sheets, supported further by high cash conversion rates. Their capital and funding structures are isolated from the effects of SA Taxi's restructuring, as there are no cross-default clauses between Nutun, WeBuyCars and SA Taxi ("the subsidiaries")". In a trading statement for the year to 30th September 2023 the company said, "...core EPS, HEPS and basic EPS are expected to be lower than the ranges reported in the trading statement released on SENS on 20 March 20". Hopefully if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. More recently, we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and at least wait for a break above that. That has not happened yet although it looks close. Since the publication of its trading statement the share has collapsed to under R4 which indicates that there may be worse noews in the pipeline. If you did sell out on stop-loss, then you have cash to buy back in at these much lower levels when the share shows signs of bottoming. If not, then you have paid some very expensive school fees to learn a basic lesson about stop-loss in the share market. On 12th September 2023 the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. The news caused the share price to drop sharply.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and WeBuyCars. It specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company has excess capital of R1bn. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results may present a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the six months to 31st March 2023 the company reported a headline loss of 183,3c per share compared with a profit of 71,9c per share (restated) in the previous period. The company said, "After accounting for the restructure of SA Taxi, Transaction Capital is comfortable that its balance sheet remains sufficiently capitalised and debt covenant levels remain intact. WeBuyCars and Nutun have robust balance sheets, supported further by high cash conversion rates. Their capital and funding structures are isolated from the effects of SA Taxi's restructuring, as there are no cross-default clauses between Nutun, WeBuyCars and SA Taxi ("the subsidiaries")". In a trading statement for the year to 30th September 2023 the company said, "...core EPS, HEPS and basic EPS are expected to be lower than the ranges reported in the trading statement released on SENS on 20 March 20". Hopefully if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. More recently, we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and at least wait for a break above that. That has not happened yet although it looks close. If you did sell out on stop-loss, then you have cash to buy back in at these much lower levels when the share shows signs of bottoming. If not, then you have paid some very expensive school fees to learn a basic lesson about stop-loss in the share market. On 12th September 2023 the company announced that its CEO, David Hurwitz, would resign with effect from 31st December 2023. The news caused the share price to drop sharply.
JSE:TCP
by PDSnetSA
Our opinion on the current state of TCPTransaction Capital (TCP) is a company which has three divisions - minibus taxis, risk services, and WeBuyCars. It specialises in financing, repairing, insuring and selling minibus taxis in South Africa. It completely dominates the entire value chain associated with the minibus taxi industry. The company listed in June 2012 and since then and until 2023, the company generated an annual compound growth in earnings per share of 21% since 2014. That ended abruptly in 2023 when the company revealed that it had to make a R1,8bn provision for bad debts in its minibus taxi division. About 69% of South African households use taxis with more than 15m trips per day. Most of this is non-discretionary - which means that this industry tends to be defensive and not generally impacted by the state of the economy at large. The South African Taxi Council (Santaco) acquired a 25% stake in SA Taxi for R1,7bn in 2018 which is benefiting both parties. The directors of TCP own 32% of the company. The company has had a compound growth in earnings of 20% per annum for the past five years and was partially derailed by COVID-19. The company has excess capital of R1bn. The company is also involved in debt-collection in South Africa and Australia through Transaction Capital Risk Services (TCRS). It is apparent that the taxi industry has suffered from a perfect storm of rising interest rates, rising fuel costs and lower consumer spending resulting in a massive increase in TCP's bad debt provision. On 15th March 2023 the company reported that the controlling Hurwitz family trust had sold 1,6m shares in December 2022 - since then the share has halved in price. To us, the sell-off in TCP shares since the beginning of May 2022 and the sharp 40% drop following its results may present a buying opportunity. Notably, the company announced on 23rd March 2023 that Coronation had increased its holding in TCP to 16,57% of the issued shares. In its results for the six months to 31st March 2023 the company reported a headline loss of 183,3c per share compared with a profit of 71,9c per share (restated) in the previous period. The company said, "After accounting for the restructure of SA Taxi, Transaction Capital is comfortable that its balance sheet remains sufficiently capitalised and debt covenant levels remain intact. WeBuyCars and Nutun have robust balance sheets, supported further by high cash conversion rates. Their capital and funding structures are isolated from the effects of SA Taxi's restructuring, as there are no cross-default clauses between Nutun, WeBuyCars and SA Taxi ("the subsidiaries")". In a trading statement for the year to 30th September 2023 the company said, "core EPS, HEPS and basic EPS are expected to be lower than the ranges reported in the trading statement released on SENS on 20 March 20". Hopefully if you were holding the shares, you sold out on your stop back in May 2022 at prices above R40 per share. More recently, we recommended that you apply a 65-day exponentially smoothed moving average to the Transcap share price and at least wait for a break above that. That has not happened yet although it looks close. If you did sell out on stop-loss, then you have cash to buy back in at these much lower levels when the share shows signs of bottoming. If not, then you have paid some very expensive school fees to learn a basic lesson about stop-loss in the share market.
JSE:TCP
by PDSnetSA
Transaction Capital LTD gearing up to do wonders to your capitalJSE:TCP is proof that the market will do what the market wants to do. The stock tumbled from its highs of R52.50 in April 2022 after a beautiful rally that started in March 2020 from the lows of R8.96. Looking at the current price action after a huge sell off, the stock found support at R5.45 and began making an ascending triangle with resistance at R7.16. This resistance was broken on 5th September and retested with a hammer candle the following session ,and we had a bullish crossover of the 8 Day EMA and 50 Day EMA.The share reached R7.72 yesterday the 7th of September and we had some profit taking which saw the day closing at R7.37. As long as the R7.16 level holds as support, we could see price creep to R8.23 where it may find resistance and start consolidating before an attempt to trade above R8.52 while targeting R14.25. Considering that there is a market gap between R20.90 and R28.00 the bulls could be sharpering their horns to close this window, a potential of over 200% gains from the current levels of R7.37. Short to medium term sentiments are strongly bullish above R7.16 and long term above R8.52. conservative trailing stops recommended as price breaks resistances to the upside.
JSE:TCPLong
by Source_Sailor
2
Transaction Capital ready to shoot up to R18.56 thanks to a box?Box Formation has formed on TCP. We are still seeing low liquidity and low volume of trades as I believe the bulls have been scared out of their position. However, we are seeing potential signs of a bottom as there could be more buying to push the price up. Other indicators show including: 200> 7=21 RSI>50 higher lows Target one will be to the top of the downtrend resistance at R18.56 ABOUT THE COMPANY Core Focus: Transaction Capital is a financial services company that focuses on two main business segments: Credit Services and Taxi Services. Founding Year: The company was founded in 2007. Credit Services: The Credit Services segment provides specialist lending and related services to businesses and consumers, with a focus on the lower-income market. Taxi Services: The Taxi Services segment focuses on the minibus taxi industry in South Africa, providing various services and products to taxi operators. Ride-Hailing Investment: Transaction Capital's Taxi Services segment includes a significant investment in SA Taxi, which provides financing and support services to the minibus taxi industry. SA Taxi also ventured into ride-hailing services, creating competition for established ride-hailing companies. Risk Management: The company places a strong emphasis on risk management and data analytics to inform its lending decisions and manage credit risk effectively. Technology Integration: The company has integrated technology and data analytics into its operations to improve efficiency, decision-making, and customer experience. Social Impact: Transaction Capital's investments in the taxi industry and related services have a broader social impact by supporting local transportation and livelihoods.
JSE:TCPLong
by Timonrosso
1
#JSETCP - Long IdeaThe trade idea is in play and with price showing support above R6.20 The risk reward is great at this point as we target the R8 level initially. A successful break above would be a good level to add to the position. A daily close below R5.40 negates the idea. A falling wedge is a bullish chart pattern that signals a potential trend reversal to the upside. It is formed when the price action of an asset is moving in an overall bearish trend before the price action corrects higher. Within this pullback, two converging trend lines are drawn. The consolidation part ends when the price action bursts through the upper trend line or wedge’s resistance.
JSE:TCPLong
by Trader-Dan