Great value for the long term

Finweek English Edition - - MARKET PLACE - *The writer owns shares in Sho­prite.

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.

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