Over the weekend an article was praising Stefanutti Stocks which is a construction company listed on the Johannesburg Stock Exchange known as the JSE. back during lockdowns in May 2020 the share price was sitting at a low of R0.14c which is under $0.01c and is more like $.0088c so a very cheap stock. Since then the stock has risen by 4986% climbing above R50 per share.
This may seem like a great return, but we are talking 6 years here and the big turn off for myself is the investment is in Rands. The Rand has fluctuated over that time between R16.11 and 19.28 to the dollar and is currently at around R16.33 which is worrying as the Dollar has weakened.
The Stefanutti stock has done very well if one compares it to the likes of Nvidia the R1000 investment back in May 2020 till now would have been worth R14000 so a 14 x since then.
Personally I want nothing to do with South African shares and there is no FOMO what so ever seeing this Stefanutti share price doing a 50 x over 6 years. The interest on my part is zero as the risk of having shares in Rands is not the same as having these in Dollars, Euro's or GBP due to the depreciation risks. On top of that you have a government hungry for taxes that will take a minimum of 40% on whatever is made.
If one had invested in Bitcoin back in May 2020 the price was $8K and is now at around $77.5k so nearly a 9.5 x return even when the prices are down and more importantly the value is in USD and nor Rands. The Bitcoin high of $126K reflects how the price has dropped and is literally 40% down.
What I find interesting is why the Stefanutti stocks rose so sharply over this period and was not over the entire period of 6 years and more like the last 2 years. Stefanutti are a large construction company doing roads, dams, airport runways, buildings and construction in the mining industry. The company operates throughout Africa and the Middle East and the order book of projects they have currently is very healthy.
Back in 2024 the company had completed the Kusile Power station and was owed hundreds of millions in payments from the SA Government. This payment came through in 2025 being R588 million and bolstered their revenue and profitability for the year. The company ended up increasing their operational profit by R388 million due to the outstanding payment. In real terms the operating profit was actually R328 million and not the skewed R689 million due to the very late government payment which was more of a settlement.
The company has not paid any dividends and this for investors is all about the share price and even though the books look very healthy the stock price long term holds risk. Looking at the stock chart things look to be on the up, but they do not tell the true story. We know most retail investors do zero research and you do wonder how many have jumped in seeing how the price has been on the up and suggest the price will continue to rise for a short period before the bigger investors sell off leaving retail holding the bag. I am always wary of seeing these types of articles as someone is benefitting behind the scenes having this article printed hoping for exit liquidity to arrive.