Our opinion on the current state of BELL(BEL)

Bell (BEL) is a manufacturer and distributor of heavy equipment and earth-moving machinery used in the mining, construction, agriculture, and waste management industries. It has been directly impacted by the slowdown in construction since 2008 and the collapse of the mining industry. Bell's articulated dump trucks (ADTs) are exported worldwide from South Africa and Germany. The company also holds dealerships for several global manufacturers, giving it a product range of over 120 products. Roughly 60% of its business comes from outside South Africa. Bell employs 3,200 people, of whom 88.6% are based in South Africa.

The CEO of Bell, Gary Bell, has indicated to *Business Day* that the company would consider delisting, with 1A Bell making an offer to minority shareholders, though he did not disclose at what price. Some minority shareholders are now arguing that the board has a fiduciary duty to put the company up for sale to the highest bidder. On 18th February 2021, the company announced that a deal had been struck for 1A Bell to buy a further 31.4% of Bell, giving it a 70% stake at R10 per share—a 13% discount to the share price at that time.

In its results for the six months to 30th June 2024, the company reported revenue up 6% and headline earnings per share (HEPS) down 6%. Bell stated, "Demand for ADTs in the USA remained surprisingly strong, and despite high inventory levels across the entire industry, which made for a significantly more competitive environment, we were successful in improving our market share position over the period in this strategic market. Certain southern hemisphere markets for our ADT product, including South Africa and Zambia, where demand is traditionally driven by mining, proved more resilient than the northern hemisphere market across Europe and the UK."

In a trading statement for the year to 31st December 2024, the company estimated that HEPS would fall by at least 25%. Bell explained, "The expected decrease in earnings for the year ending 31 December 2024 is mainly due to these weaker conditions in most of the markets that the group is active in."

The share trades over R3 million worth of shares on average each day, making it suitable for private investors. There was an on-balance-volume (OBV) buy signal on 7th September 2023 at 1752c per share. Since then, the share price has risen to 4200c.

On 15th July 2024, the Bell family made a firm offer to buy out the 30% of Bell they did not own at R53 per share—an 82.3% premium to the 30-day volume-weighted average price (VWAP) of 3100c on 11th July 2024. However, the offer was not accepted at a general meeting of shareholders held on 12th September 2024, causing the share price to fall significantly.
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