CHOOSE WIN­NERS

Finweek English Edition - - INVESTMENT -

We al­ways say one should stick with the win­ners as they tend to con­tinue to win while the slow ones con­tinue to lag. Sure, some­times that re­la­tion­ship does change, such as when Shoprite* over­took Pick n Pay as the coun­try’s lead­ing food re­tailer – but that hap­pens slowly and sel­dom. Win­ners use their po­si­tion as num­ber one to ce­ment that po­si­tion as they have bet­ter cash f low, bet­ter mar­gins, bet­ter ne­go­ti­at­ing power with sup­pli­ers and cus­tomers, while the lag­gards are con­sis­tently on the back foot. This is per­fectly il­lus­trated by the re­cent trad­ing up­date from Digi­core with HEPS ex­pected to be 73%-75% lower while MiX Telem­at­ics storms ahead. Sure, Digi­core may well start grow­ing prof­its again but by then MiX Telem­at­ics will be very far ahead both in earn­ings and share price growth, at a much lower risk.

Digi­core Hold­ings

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