Sasol Deep Dive | Q1 2024 Review
Read below as Sasfin Wealth's Equity Analyst, Ntsika Ntsokolo, takes a deep dive into Sasol’s FY23.
Read below as Sasfin Wealth's Equity Analyst, Ntsika Ntsokolo, takes a deep dive into Sasol’s FY23.
Sasol has historically been viewed as a high-quality low growth stock. Its cyclicality is mainly due to its relationship with crude oil, which makes it a high beta stock that over time has rarely delivered an adequate risk‑adjusted return profile.
|
Performance Returns Table % (Annualised) |
|
Returns |
1M |
3M |
6M |
|
YTD |
1Y |
3Y |
5Y |
10Y |
20Y |
IPO |
|
SOL-ZA |
1.90 |
-23.81 |
-19.89 |
|
-2.10 |
-28.03 |
6.51 |
-14.38 |
-7.06 |
6.67 |
13.54 |
|
All share |
1.06 |
4.58 |
1.58 |
|
-3.11 |
0.59 |
9.84 |
10.79 |
8.60 |
13.70 |
9.60 |
|
Alpha |
0.84 |
-28.39 |
-21.48 |
|
1.01 |
-28.62 |
-3.33 |
-25.18 |
-15.67 |
-7.03 |
3.93 |
Source: Factset
The share is quite beaten up, down ~29% last year, with brent crude oil down only ~5% on the year. So, we do anticipate a short-term recovery in the share price, as it does historically run a high correlation with brent crude due to its fuels business.
After that, little is clear about the strategic direction the firm will take or how it will deal with its structural headwinds, which is why we would recommend staying out Sasol long term.
Sasol doesn’t seem to be in control of its own fate at the moment, and although we are optimistic about the group’s ability to adapt; until we get more clarity on the abovementioned concerns, we are cautiously pessimistic.
To read the full report click here.
