9 mid-cap stocks to buy in 2023


Anthony Clark from Smalltalkdaily Research shared his top South African mid and small-cap JSE-listed stocks to consider in 2023.

Clark is one of South Africa’s foremost analysts for financial and industrial small and medium-cap companies.

He is a regular guest on investment shows and regularly shares his analysis and insights on the best picks in the market.

Clark shared his top picks for 2023 in a recent report, which include stocks ranging from blue chip mid-caps to high-risk small caps.

“I have a pretty high conviction that the list, which hopefully has something for everybody, from gamblers to widows and orphans,” he said.

“As an aggregate, they should exceed my standard benchmarks of the JSE small and mid-cap Indices. Many are core recommendations of my desk.”

Here are the nine shares in Anthony Clark’s list of “Top Stocks for 2023.

Assupol – Target 1,400 cents

Assupol has over 25% market share of PERSAL (Government Payroll System), and sells predominately funeral policies to teachers, police, and healthcare workers.

It trades at the steepest discount to enterprise value (EV), around 45%, when compared to its listed JSE peers, and has a dividend yield of around 8%.

Much of this discount could be ascribed to its low liquidity and listing status on the Cape Town Stock Exchange (CTSE) – that is the opportunity.

There has recently been a restructuring and reorganisation at its largest shareholder BuD Group, which holds roughly 46% of BuD.

Whispers suggest that the stake may ultimately be sold. The value unlock for shareholders could be seen as the process ripples through Assupol’s share price.

CA & S – Target 850 cents

CA & S moved its listing from the Cape Town Stock Exchange to the JSE in mid-2022 as part of the unbundling of PSG Group. PSG unbundled its majority stake as part of its own de-listing process.

CA & S is a collective of well-established FMCG service businesses operating throughout Southern Africa.

It has a distribution network of 35,000 retail outlets in South Africa, Botswana, Zambia, Zimbabwe, Namibia, Eswatini, Mozambique, and Lesotho.

Clark said an earnings multiple of 9x to December 2022 for a stock with a consistent track record and a clear runway for growth seems rather miserly.

Curro Holdings – Target 1,600 cents

Curro Holdings is a JSE-listed private education company offering schooling to learners from early childhood to Grade 12.

Clark’s perception and recommendation on Curro changed in mid-2022 when he anticipated that a revision to the company’s expansionary strategy would improve prospects and earnings.

“A site visit I undertook in late 2022 was encouraging, and new management, a new CEO, deputy CEO and CFO were appointed,” he said.

Curro has cleaned up the debtor profile and has a better quality payer base while picking up organic growth of new learner entrants as the state education system continues to buckle.

“I forecast solid and increasing earnings growth as the company transitions away from out-and-out expansion,” he said.

“I see an opportunity in the medium term. I maintain my late-2022 buy stance and 1,600 cent target.”

Kaap Agri – Target 5,500 cents

Retail business Kaap Agri will soon be renamed KAL Group to reflect its broad retail business.

“In my 17 years of covering Kaap Agri, this is the lowest PE rating I have witnessed for the stock in a decade,” he said.

“It is an astonishingly cheap entry point for a retailer that has shown consistent CAGR growth of 15% for over a decade with scope to improve underlying earnings growth.”

Mustek – Target 1,800 cents

Hardware and technology services company Mustek had a troubled 2022 with the global slowdown hurting results and the death of its founder and CEO David Kan.

Clark expects some form of corporate activity within Mustek following the passing of Kan. “The stock has suffered persistently with a low PE rating, and I believe management has had enough,” he said.

“Given the NAV of nearly 2,400 cents and a share price of 1,465 cents, one will never get NAV, but there is an upside in Mustek from a recovery from the depressed hardware market.”

Nampak – Target 250 cents

Nampak had a turbulent few months, collapsing over 70% and sending out the begging bowl for a highly dilutive R2 billion rights issue.

I cannot see Nampak going bust. “The South African canned foods and beverage sector would suffer if Nampak did go belly up, so a compromise will probably occur among all stakeholders,” he said.

“With a valuation of R450 million, Nampak is my 2023 “wild card.” Widows and orphans stay away, but for a risk-tolerant individual, Nampak could be a great 2023 risk/reward scenario.”

Novus Holdings – Target 550 cents

Novus Holdings is one of southern Africa’s largest print production and manufacturing operations.

Novus has done an R800 million deal to acquire the South African education assets of Pearson, a leading provider of textbooks. It could add 50 cents a share to earnings.

The current valuation and rating of Novus is starting to look highly compelling. Novus is one of those few small caps that will show growth and a material PE unwind,” he said.

TWK Investments – Target 6,500 cents

TWK is a diversified group of companies operating in the agriculture, forestry, grain, financial services, and motor and tyre industries.

It has been the best-performing agricultural sector counter over five years and has shot the lights out in terms of earnings and share price performance.

“At 5,200 cents with a bumper FY2023 results period ahead and a positive update from the recent AGM, I added TWK to my top stocks portfolio as a mid-cap agri blue-chip in the making,” he said.

York Timbers – Target 300 cents

York Timbers is an integrated forestry company that owns both plantations and processing plants. It converts forest products into saleable lumber and plywood applications.

York Timbers wants to raise R250 million to make it possible to increase the age at which trees are harvested – from 20 years to 23 years.

“At 202 cents with the rights heftily oversubscribed, the largest shareholder diluted, and the activist now in prime control, York has to be a reasonable asset for recovery,” he said.


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