Bidvest Group Ltd., a diversified South African company specializing in food manufacturing and packaging, rose to a 22-year high before an expected earnings report for the half year through December.
The stock climbed 3.9 percent, the biggest gain since November 2011, to 245.77 rand in Johannesburg, the highest since at least August 1990, according to data compiled by Bloomberg.
Bidvest’s headline earnings per share excluding a year-earlier gain of 399 million rand ($45 million) would be be 17 percent to 19 percent higher for the six months through December last year, compared with the same period a year earlier, the Johannesburg-based company said on Feb. 19. It expects to report the results on or about March 4.
“Their trading statement has been a big factor in the recent week,” said Mark Hodgson, an analyst at Cape Town-based Avior Research Pty Ltd., in a phone interview. “There is a lot of feel-good factor.”
Bidvest shares have gained 14 percent this year, compared with a 1.4 percent rise in the 165-company FTSE/JSE Africa All-Share index.
“I am pretty confident that their earnings for the second half will be at a slower pace,” Hodgson said. “It depends on the South African economy. About 60 percent of their earnings are from the country.”
South African GDP probably grew at an annualized rate of 1.8 percent in the fourth quarter of 2012, according to a median estimate of 20 analysts surveyed by Bloomberg. The continent’s biggest economy is expected to expand 2.5 percent this year, down from a 3 percent estimate in Finance Minister’s Pravin Gordhan’s Oct. 25 mid-term budget.
Bidvest stock is trading at a relative strength index above 70 for a fifth straight day. A reading above 70 means the stock is overbought, according to technical analysts who follow price charts.