Grindrod Ltd., Africa’s largest shipping company, rose to its highest level in more than four years as investors bet on earnings growth driven by diversification into ports and terminals.
The stock advanced for the ninth time in 10 days, gaining as much as 3.4 percent to 19.41 rand in Johannesburg, its highest level on an intraday basis since September 2008. The shares have gained 22 percent this year, compared with an 11 percent rise in the four-member FTSE/JSE Africa Transport Index. The company has a market capitalization of 11.6 billion rand ($1.27 billion).
“Investors are probably betting that the operating changes over recent years and their investment in non-shipping infrastructure which includes, ports, terminals and rail concessions will generate higher returns in the future,” Paul Trilivas, an analyst at Value-Kwik, a Johannesburg-based equity research company, said in a phone interview.
Grindrod’s relative strength index is above 70 for a third straight day, according to data compiled by Bloomberg. A reading above 70 means the stock is overbought, according to technical analysts who follow price charts.
The company reported a 22 percent increase in full-year earnings per share excluding one-time items to 1.22 rand on Feb. 27. The final dividend was increased 28 percent to 15.4 cents a share, according to the statement.