Mediclinic International Ltd. (MDC) jumped to the highest on record after saying Coronation Asset Management Ltd. increased its holding in South Africa’s largest publicly traded private hospital group by market value.
Mediclinic climbed as much as 14 percent to 41.99 rand, the highest since at least 1990 when Bloomberg started compiling data on the shares, and traded at 36.91 rand at the close in Johannesburg. The stock is up 9.9 percent this year, outpacing a 6 percent gain for the FTSE/JSE Africa All Share Index (JALSH).
Coronation informed Mediclinic on Mar. 9 it had increased its holding to 8.45 percent from 4.47 percent, Mediclinic said in a statement today. The International Hospitals Network Partnership, an associate of Trilantic Capital Partners, reduced its interest from 10 percent to 6.01 percent.
“We think it’s a very attractive business and it’s not a liquid stock that’s easy to build a stake in,” Sarah-Jane Alexander, an equity analyst at Coronation said. “It should continue to grow its earnings quite strongly.”
Mediclinic trades at 14.2 times earnings for the year to March 31 2013, while the FTSE/JSE Africa All Share Index (JALSH) trades on 11.5 percent times 2012 earnings, according to Bloomberg consensus forecasts. The higher multiple is justified by the company’s geographic spread and the 46 percent of sales made in Switzerland, Alexander said.
“When a company like Coronation is buying it shows confidence as it’s assumed it’s done its homework,” Andrew Bryson, a Johannesburg-based derivatives trader at BoE Asset Management said by phone. “The underpin of a big unit trust buyer is good news for a company and there is always the chance it may buy more.”
Coronation managed assets of 274 billion rand ($36 billion) as of Dec. 31.
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