Our opinion on the current state of 4SIGHT(4SI)

4Sight is a Mauritian company that specializes in investing in technologies and companies associated with the "4th Industrial Revolution." This revolution is characterized by cyber-physical systems that integrate cloud computing and the internet of things, exemplified by the development of "smart factories." The company operates in two main areas: mining & manufacturing, and software, cloud, and enterprise solutions. It employs 400 people and serves 3000 customers across 30 countries, with 42% of its income derived from outside South Africa.

Since its listing in October 2017, 4Sight's share price has experienced significant volatility. Initially listed at 235c, the share price plummeted to around 13c by September 2019 but has since rallied to 31c. The company does not yet pay dividends, reflecting its growth-focused strategy. On 6th October 2020, the company announced a significant buyback of 30.6% of its issued ordinary shares and finalized the sale of Digitata for just over R90 million.

In its financial results for the year ending 31st December 2023, 4Sight reported a 34.9% increase in revenue and a 127.8% rise in headline earnings per share (HEPS). The company attributed the increase in other income mainly to forex currency gains of R2.9 million, compared to a loss of R1.2 million in the prior period. Total operating expenses for the period rose by 24.1% to R348.6 million from R280.8 million in the previous year.

For the 14 months ending 29th February 2024, 4Sight estimated that HEPS would range between 5.742c and 6.128c, compared with 2.379c per share for the period ended 31 December 2022. Notably, the company has changed its financial year-end to 29th February from 31st December. We added this share to the Winning Shares List on 3rd August 2023 at 31c, and it has since climbed to 79c.

Technically, the share qualifies as a penny stock, with an average daily trade value of about R158,000, making it accessible to private investors. It entered a strong uptrend following its latest results, although this uptrend may have temporarily plateaued. As such, 4Sight represents a challenging investment to evaluate without a deep understanding of the technologies driving the 4th industrial revolution, suggesting the use of a strict stop-loss strategy to manage investment risk.