Our opinion on the current state of ISA

Nov 13, 2023

ISA Holdings (ISA) is a small Alt-X listed IT company offering network, internet, and information security in sub-Saharan Africa. The company claims to employ some of the leading IT security specialists and to have the tools and experience to offer effective information security solutions. In its results for the six months to 31st August 2023 the company reported turnover up 42% and earnings per share (EPS) up 27%. The company said, "Profit before other income and expenses increased by 22% during the current reporting period to R23.1 million, representing a gross margin of 47% compared to 55% in the prior reporting period". This looks like a good quality IT company that is profitable but has gone through a tough time. The problem is that the share is thinly traded with only about R19 000 worth of shares changing hands on average each day. This makes it dangerous for private investors to buy a meaningful number of shares, however, on a P:E of 9,21 and a dividend yield of 8,68% the shares look like good value.