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The best JSE TOP40 listed shares in 2021

In the below article we identify the best performing JSE TOP40 listed shares, highlighting broker ratings, price targets as well as a technical trading view on these companies right now.

In the below article we identify the top performing companies listed on the JSE TOP 40 Index, highlighting broker ratings, price targets as well as a technical trading view on these companies.

JSE Top40 Index price performance
The JSE Top 40 Index has had a mixed year with the net effect being a gain of around 7.4% year to date. As of the 14th of September 2021: The MTN Group, Aspen Pharmacare and Sasol Ltd have led gains on the index.

Top 3 companies on the JSE Top 40 Index in 2021 so far

The below table information is as of the 14th of September 2021, with consensus broker ratings and price targets sourced from Refinitiv data.

1. The MTN Group

Company LT Broker Rating No. of Brokers LT Target Price Share Price Discount/Premium to Target
The MTN Group Buy 11 120.7 126.48 4.79%

The MTN Group has been the best performing share on the JSE Top40 index year to date. Gains have followed an improving balance sheet post regulatory fines / headwinds which have plagued the company in the past.

In recent news MTN Nigeria has managed to renew its operating license for a further ten years. MTN Nigeria accounts for roughly a third of group revenue. The group has also managed to expand its fintech mobile money payment platform through a partnership with Flutterwave, which will allow increased reach for payments across Africa.

MTN has been looking to exit some of the higher risk Middle Eastern territories in which it operates, and increase focus on the African operations. In recent times, the group has abandoned its operations in Syria and is currently assessing its options in Afghanistan and Yemen. MTN is said to be in conversation with international buyers for the potential sale of its wireless business in Afghanistan.

The company while still remaining a ‘buy’ and in investor favour, trades at a premium to what is deemed a longer term fair value of R120.7 a share.

MTN -Technical Analysis

The long term trend for MTN remains up. We have however seen a short term correction of this trend, reaching a low of 11960. The price does look to have ended this correction with a bullish price reversal. This price reversal is supported by a move out of oversold territory. 13585 is the favoured upside target from the move, while traders who are long might consider using a close below the 11960 level as a stop loss indication for the trade.

2. Aspen Pharmacare

Company LT Broker Rating No. of Brokers LT Target Price Share Price Discount/Premium to Target
Aspen Pharmacare Buy 5 193 224.23 16.18%

Aspen Pharmacare has been the second best performing share on the JSE Top 40 Index in 2021, having added more than 80% over the period (as of the 14th of September 2021).

The group has recently posted a strong set of results in which investors would have applauded the groups large reduction in debt, improved cash flow, dividend reinstatement and favourable forward guidance. For more information of the recent Aspen results and guidance, click here.

While Aspen remains a ‘buy’ as per a consensus of analyst ratings, the share prices has run well ahead (+16%) of the long term price target.

Aspen – Technical Analysis

The steepening trend lines on the chart above highlight a strong trend acceleration for the share price of Aspen. This is often considered a precursor to a price ‘blow off’ in technical analysis terms i.e. suggestion of a short term correction to follow.

Trend followers would not look to short the overbought signal but might prefer to buy into weakness should it occur. Should a correction manifest a confluence of support at the 20000 level might be the first area where trend followers might look for long entry into the share.

3. Sasol

Company LT Broker Rating No. of Brokers LT Target Price Share Price Discount/Premium to Target
Sasol Ltd Buy 5 273.3 241.38 -11.68%

The share price of Sasol has rallied nearly 80% year to date (as of the 14th of September 2021) following a much improved performance from the group’s chemicals business and stabilization of the company’s balance sheet. Over the last financial year, $3.8bn in asset sales have helped Sasol to significantly deleverage the business as it reduces its debt burden to levels ahead of guidance.

A consensus of long term analyst price targets suggest that Sasol could still see a double digit price gain to follow from current levels.

Sasol - Technical Analysis

The share price of Sasol has broken above the 22700 resistance level, a move which now sees 25350 as the next upside resistance target. The move higher has however moved the share price back into overbought territory.

This is not considered a signal to short the share price, but rather a suggestion that traders looking for long positions might be able to do so at more favourable price levels. A pullback from current levels is considered buyable provided that the lower level of support at 19670 is not broken.

In summary

  • The MTN Group, Aspen Pharmacare and Sasol are the best performing JSE TOP40 share in 2021 year to date

  • MTN, Aspen and Sasol continue to carry an average broker rating of ‘buy’

  • MTN and Aspen share prices have exceeded long term price targets

  • Sasol continues to trade at a discount to its long term analyst price target

  • The MTN share price looks to be resuming its longer term uptrend at present

  • The Aspen share price looks to be overheated in the short term

  • The Sasol share price has produced an upside breakout

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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