Happy with long-term stocks

Finweek English Edition - - MARKETPLACE -

As I al­ways do dur­ing the hol­i­days, I re­viewed my portfolio and made sure all my long-term stocks still de­serve to be in my portfolio. The short an­swer is I re­main happy to hold them all. Some, such as Wool­worths* and Richemont*, had a rough 2016 as their re­spec­tive share prices dropped. But fall­ing prices don’t bother me – they merely cre­ate the op­por­tu­nity to buy more, as I have been do­ing. At around 7 000c Woolies is on a for­ward price-to-earn­ings ra­tio (P/E) of some 14.5 times (this as­sumes a mod­est 6% HEPS growth for the full year end­ing June 2017). I con­sider that cheap and am ex­pect­ing the re­tailer to be one of the best per­form­ers in my portfolio for 2017 as it rerates to a P/E closer to 20 times, mean­ing a price of over R100.

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