Buy: RCL Foods
RCL Foods has been one of the worst performers on the JSE food producers index, down 34% year to date. The financial 2026 results, particularly the collapse in sugar profitability, have left the stock deeply unloved: headline earnings plummeted 33% to 105c a share as sugar operating profits dropped 44%. Problems in its baking and pet food businesses also left investors feeling queasy. However, there is a dark-horse recovery opportunity. The investment case rests on a simple proposition: RCL does not need everything to go right for the stock to recover. At just 6.4 times earnings, the market appears to be pricing in continued operational disappointment. A contrarian view is that an improving global sugar cycle — sugar prices have risen 40% so far — could result in a recovery in Selati, while an easing of the pet food disruption could provide the ingredients for a meaningful earnings and sentiment recovery into financial 2027. RCL qualifies as a speculative buy, with an initial target of 850c.
Sell: WeBuyCars
Listed in April 2024 at R18.75, second-hand car reseller WeBuyCars rallied to a high of R57.40 in October 2025. But sentiment stalled after co-founders Faan and Dirk van der Walt sold 18.7-million shares to raise R866.4m in February 2026 at R46.27, although both remain shareholders with a 5.81% stake. Since the sale, the stock has fallen 44%. With interest rates ticking higher and consumers seemingly more willing to buy a new, affordable Chinese vehicle stacked with options, warranties and service plans, new car price competition is putting pressure on used car margins. Used car prices are deflationary and manufacturers are becoming increasingly aggressive on pricing to win orders. With fuel prices rocketing, overall vehicle sales — new and used — may temper. WeBuyCars has a good business model and strategy, but in the current market it might be better to park the stock.
Anthony Clark is an analyst at Smalltalkdaily Research
