Great value for the long term
I have held Shoprite shares for over a decade, adding whenever it was offering value, and we had two recent pieces of news that make me an even happier shareholder.
First, the Steinhoff deal has been cancelled after the parties couldn’t agree on price. This is great news in my view as I own Shoprite for a simple reason – it is an African low-LSM food retailer. I have no interest in Pep and the other Steinhoff brands.
Second were the excellent results, with the rest of Africa delivering top numbers while even local numbers were strong. People will always have to eat, and we’ll always have poorer, price-conscious shoppers. Shoprite not only fulfils both needs but is the best at doing it. None of its competitors even come close. Post the cancelled deal and results, the share has moved up some 10%, but on a forward price-toearnings ratio (P/E) of 18 times and a dividend yield over 2%, the stock is offering great value for long-term shareholders.