Paul Nyakazeya, Group Digital Editor 
OLD Mutual Securities (OMSEC) says investors should buy stocks from Axia Corporation Limited (Axia), African Sun Limited (ASL), Turnall, Padenga and OK Zimbabwe for better returns.
This comes as the blue chip counters have traded exceptionally well in the third quarter at a time when most firms were failing to hold their own due to worsening economic conditions in the country.
According to OMSEC, Axia has been consistently growing despite constraints being experienced in the economy.
“We expect the company to grow more if the economic environment turns a corner for the better,” said the equities research firm in its portfolio manager’s digest review for the third report quarter.
Axia, which specialises in retailing leading fast moving consumer and durable goods, has three main business interests, a 50,01 percent stake in Distribution Group Africa their highest revenue earner, 66,67 percent shareholding in TV Sales and Home and 26 percent in Transerv, a vehicle sundries, spares and parts company.
OMSEC believes that recovery in disposable incomes would improve demand for its products, growth in market share and improved cash and nostro funds locally to ensure sustained supplies.
“Axia is oversold on both the relative strength index and moving average convergence and divergence scale. We advise taking advantage of the current stability in the share price and invest for long term gains,” the company said.
ASL owns major hotels in tourist hotspots in Zimbabwe that is Victoria Falls, the Nyanga Mountains region, Hwange National Park. Kariba and City Hotels in Harare, Bulawayo and Mutare.
“Following the completion of Victoria Falls Airport, tourist arrivals have improved markedly. The company’s profitability has improved on the back of debt and organisational restructuring. The lower debt should see previously high interest exepenses benefitting the bottom line and consequently the shareholder,” said OMSEC.
Tourist arrival growth and the ability of the company to meet its expenditure requirements in foreign currency has made the hotelier quite competitive.
Turnall has previously been saddled with debt distress and the management team has been able to turn around the company’s solvency position through operational cash flows and taking advantage of the depreciation of debt brought on by the currency devaluation.
“They have a cost structure that now allows them to export their products…The company’s relative strength index and moving average convergence divergence is in neutral territory. One should take up shares in the company as the fundamental outlook remains fairly optimistic,” said OMSEC.
OMSEC said Padenga has maintained its infrastructure well and is relatively concealed from the currency risk associated with Zimbabwe as the bulk of its crocodile skins are sold to European markets for foreign currency.
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