Flash Note: Firstrand Ltd - A Long Term Technical Sell
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Summary: At a PE Ratio of 14, Firstrand appears elevated. This is in relation to it's peers, in the context of a below average SA growth rate as well as the increasing market competition. Additionally, at current levels, the market may not be discounting the R20bn execution risk of UK-based Aldermore while technically, warning signs are starting to flash. At R66.77, this share is a Portfolio Sell . I believe one has to consider the valuation of SA Banks and whether they are indeed "value". Yes, we have the traditional metrics which is often cited such as the sector's "low" PE Ratios and very attractive, above average Dividend Yields. While these attributes are welcomed, the SA economic conditions have been relatively poor for years, so one would think that banks would trade at decade/multi-year lows. Not so. E.g. Although Absa is lower YTD, it trades near multi-year highs. Firstrand, with it's last close at R66.77, trades a mere 13.5% off i