The Finance Ghost’s Supernatural Stocks 2025 wrap

It feels like just yesterday that I was doing the wrap for 2024, the first year of Supernatural Stocks on Moneyweb. The second year is already behind us now, with so much exciting stuff happening in the market this year.

I’ll certainly remember 2025 for being that rarest of things: a South African bull market! Long may it continue.

Just like last year, the team gave me the list of the top podcasts for the year. I’m not surprised at all that we kick off with Sasol, which remains the most talked about and popular stock for retail investors in South Africa.

Five miracles and a dream

When I covered Sasol in May, it was in the aftermath of the Capital Markets Day. The share price had reacted positively to management’s strategy, reversing most of the losses experienced in the first few months of the year.

The theme of the strategy went roughly like this: the chemicals business was the major source of upside, with the idea being that the oil business – the fuels – would need to do the best it could in an environment of stubbornly low Brent crude prices.

Listen/read:
Sasol: Five miracles and a dream
Has Sasol’s long recovery finally taken hold?

Brent crude has plummeted 22% this year in dollars. One of the risks I raised in the podcast is that I’m bearish on oil prices, with my expectation being that they go sideways. I didn’t expect them to drop like this though!

At the time of the Capital Markets Day, Sasol noted a goal to get to a breakeven price per barrel of $50, but they are currently running above that level. Brent crude is now trading below $60. That’s not exactly a lot of fat, now is it?

You would therefore expect Sasol to be doing extremely badly this year.

Instead, the share price is up nearly 17% year to date!

It’s been a rollercoaster ride though, with volatility as a feature rather than a bug when it comes to Sasol.

The upswing has been driven by better coal quality and production at the Secunda Operations, along with improved recent sales volumes in fuels. They’ve also seen a significant uptick in revenue and earnings before interest, taxation, depreciation and amortisation [Ebitda] in the International Chemicals business.

Chemicals Africa has been a less positive story.

And of course, one of the key drivers of the share price has been improved sentiment towards South Africa and a hope that our infrastructure is on the mend.

In that podcast, I set out the five miracles that Sasol needed to reach their dream.

The first was for the oil price to remain where it was, which hasn’t happened. The second miracle was for improvement in South African infrastructure, something that we are starting to see at least. The third miracle was for Ebitda to triple in the chemicals business – let’s wait and see exactly what a “significant” improvement means.

The fourth was to avoid a global recession that takes oil close to $50/barrel – sadly that seems to be happening even without a recession. And the fifth was for the world to avoid global stagflation where there’s low growth and stubbornly high interest rates – the good news is that rates have been coming down.

Read:
Sasol CEO sees chemical business potentially listing by 2028
Why is Sasol at such a deep discount to fair value?
Sasol sees solid start to FY26 despite macro headwinds

Sasol punters were rewarded this year depending on when they bought in, but for me the juice isn’t worth the squeeze here. There’s a lot of volatility here to get a return that was way below so many other options on the JSE.

You can also listen to this podcast on iono.fm here.

Virgin Active: smoothie operators

The second most popular podcast was in June, dealing with Virgin Active as the next value catalyst in the Brait structure after Premier was separately listed.

Listen/read: Virgin Active: Smoothie operators

I noted the presentation given by Brait that showed a planned evolution of Virgin Active from gyms into a full wellness offering, while also highlighting how good Kauai is.

Kauai is such a good example of a blue ocean strategy, having taken a completely different approach to quick-service restaurant food that has proven to be exactly the right positioning in an era in which people are more aware of what they are eating.

The bloody red ocean of competition in unhealthy hamburgers isn’t where you want to be right now.

So what happened in the subsequent six months? Based on September 2025 numbers as the latest available financials, Virgin Active was 59.2% of Brait’s assets.

The maintainable Ebitda used to value Virgin Active was essentially flat year-on-year, yet the valuation multiple used by the company to value the stake was higher.

Now that does seem a bit odd, and you do need to be sceptical of these things when you see them, while considering whether that is correct based on the global context and where the assets are.

Here’s the really interesting thing though: in the prior year, maintainable Ebitda was very different to the Ebitda they were actually achieving.

In the latest period, achieved Ebitda grew substantially and got very close to the maintainable Ebitda number. It’s like your personal trainer setting you a goal and then you taking a year to get there!

There’s been a substantial increase in capex at Virgin Active, so you have to be slightly careful of relying on Ebitda here. Ebitda is a measure of profits before any depreciation expenses, so it would be a flattering measure for a company that has embarked on a large capex push.

Read: Virgin Active’s ‘third space’ plan with offices

As for Kauai, my understanding is that they are looking to expand offshore based on the success achieved in South Africa. I always prefer seeing organic offshore expansion instead of acquisitions, so I wish them the very best with that!

Will 2026 be the year in which we see a major corporate action around Virgin Active? Perhaps even a separate listing to build on the momentum in the latter part of 2025 around new listings on the JSE? I hope so!

You can also listen to this podcast on iono.fm here.

Who moved Spar’s cheese?

Another very popular podcast was a look at Spar in June. The trigger for that podcast was the decision by Spar to sell two of the remaining European businesses, including Switzerland that was starting to look like another Poland-esque disaster.

Listen: Spar turnaround still a work in progress

The reference to the moving of the cheese is of course a look at the disruption in this grocery sector from on-demand delivery.

Before scooters were all over our roads, Spar enjoyed a competitive advantage from having stores in convenience malls on busy routes. It was easy to pop in quickly and get whatever you need, usually with a great deli offering as well.

But now, that convenience is available on your cellphone.

To make it worse, Spar’s franchise model has made it impossible for them to meaningfully compete with Shoprite, Woolworths and even Pick n Pay when it comes to on-demand delivery.

Be honest: how many Spar-branded delivery vehicles have you seen on the road?

I noted in that podcast that there are some growth drivers in the group, like Spar Health and even Build it, but that things look tough overall. I had previously taken a small position in this turnaround some time ago – and I mean small – and I am currently sitting ever so slightly in the red.

Read:

That’s obviously a poor outcome, as there were far better uses for my capital elsewhere.

It’s a whole lot better than the situation I would find myself in if I bought at the start of 2025 though, as the share price has shed 33% of its value this year!

This turnaround has proven to be much harder than anyone thought, although 2026 does offer an opportunity in the form of Spar being able to focus purely on the businesses that actually work.

Recent corporate announcement talked about a “clear pathway to shareholder returns” – but the word “clear” is working very hard there.

They are by no means out of the woods, even if group net debt is much lower. Turnover growth remains weak in Southern Africa and Ireland as their remaining markets, with most of the improvement actually coming through in margins rather than top-line growth.

You can only drive margins for so long, so revenue growth is what we need to see in 2026.

There’s certainly all to play for.

You can also listen to this podcast on iono.fm here.

Woolworths needs to look in the mirror

Sho but retailers are popular hey! My podcast on Woolworths sits in fourth place. This one goes back to March.

Listen/read: Woolworths needs to look in the mirror

I raised concern around weak results from the group and what felt to me like a lack of acknowledgement from management of the issues. The problems in Fashion, Beauty and Home [FBH] were being blamed on external factors. The story was looking difficult to get behind.

Fast forward to the end of 2025 and where do we find ourselves?

Well, the share price is down 9% year-to-date, although that doesn’t look too bad when you consider The Foschini Group down 49%! Shoprite is down 7% as a victim of its valuation and a slowdown in the Supermarkets RSA growth rate.

The truth of it is that you didn’t want to own any of the major local retailers in 2025.

You would’ve been hurt offshore as well, with big names in apparel suffering greatly in the global trade environment. The most recent trading update from Woolworths covers the 19 weeks to 9 November. Encouragingly, Woolworths Food and FBH put in relatively similar growth rates of 7.7% and 6.2% respectively.

Listen/read: The risks of retail for investors

They’ve been increasing trading space in Food and reducing it in FBH to try and optimise the business and to respond to how people are behaving in an omnichannel retail environment.

Unfortunately, Australia continues to plague the group, with weak sales growth of 3.3% in Country Road Group and a hint that margins are under pressure.

It doesn’t exactly fill the market with confidence when the year has been capped off by the CEO of Woolworths selling nearly R37 million in shares. The retail sector has a reputation for misalignment between management and investors and this kind of thing doesn’t help.

You can also listen to this podcast on iono.fm here.

Onwards to 2026

As we look ahead to 2026, I’m encouraged by the fact that the fifth most popular podcast in 2025 dealt with the concept of ‘Should I stay or should I go? When to sell and when to reduce’.

This tells me that the Supernatural Stocks audience on Moneyweb is open to thinking deeply about how different strategies can work in the market versus just looking at single stock opportunities. I’ll certainly take this into account as we head into a new year. Thank you for listening.

It was a juicy year of exciting turnarounds, a strong local bull market and a global environment of geopolitical upheaval and many, many questions around whether AI is a bubble or not.

That question will surely be answered for us in 2026.

But the bigger question is whether the South African market can keep up the strong momentum. Personally, I think that it can.

There’s nowhere else in the world that I would rather be right now.

Have a wonderful break and I look forward to seeing you in January!

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