The Bidvest Group (BVT ZA)

The Bidvest Group is a service, trading and distribution company focused mainly in South Africa. The company specialises in services (including automotive, cleaning, security, landscaping, travel, banking, foreign exchange services, and indoor plants / flowers); private sector freight management; and commercial (which involves the manufacturing and distribution of electrical products, office stationery, office furniture, packaging closures and catering equipment and automotive retail; and others).

We retain our favourable long-term view of this company and view it as a key beneficiary of a continued, albeit slower, recovery in SA and UK economic growth and thematic support for hygiene services globally.

Technically, the price is above key support and in an inclining channel pattern, which makes the share attractive as in investing opportunity (see the black solid support trendline as well as the smaller parallel dotted inclining channel pattern). This reflects the most basic form of a bullish trend-higher highs and lower lows signalling an uptrend together with an appreciation in the share price.

Fading downside momentum, according to the Moving Average Convergence Divergence (MACD) histogram, supports the bullish trend. RSI (Relative Strength Index) forward calculations suggest that the stock will be in overbought territory at R300, which classifies our profit target of R241 as realistic. We suggest a low capital at risk allocation to this trade.

Technical analysis

The lower panel shows occurrences of the Three Outside Up Japanese candlestick pattern, indicated by a reading of 1.