Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

Net 1 UEPS Rewards Outweigh The Risks

Executive Summary:

  • Near- term issues like CPS volume weakness and the legal challenge to the SASSA contract are major overhangs on the stock
  • Underlying businesses are strong
  • Financial Services business, Net 1 Mobile business and margin expansion opportunities are underappreciated
  • Stock has 40-50% upside as the near-term concerns subside


Net 1 UEPS Technologies Inc. (NASDAQ:UEPS) stock has declined by 25-30% over the last 5-6 months. Besides the broader concerns around emerging markets, investors are worried about the legal issues surrounding the SASSA contract.

Correction seems overdone as the core businesses are growing nicely and expect to sustain this high growth. A quality platform with a dominant share and a business with high sustainable revenue growth are...

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