Happy with long-term stocks
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.