10 stocks every Saffer should own

Moneyweb asked experts to choose one stock – besides Naspers – that we should own.

Moneyweb

36ONE BCI Equity Fund’s Evan Walker says: “It looks as though we are only at the beginning of a potential European economic recovery which should aid [packaging] consumption.” Mondi is in a strong position: there’s limited additional competitor capacity, and efficiency projects still to realise returns. Dis-Chem

Sanlam Investment Management’s Patrice Rassou says while very defensive, Dis-Chem has a clear expansion pathway. “It … is using a number of smaller formats to penetrate new regions.” Dis-Chem is leading the sector’s consolidation and will keep grabbing market share. Facebook

“…we shouldn’t limit ourselves to stocks listed in SA only,” says Fairtree Capital’s Jean Pierre Verster. Facebook is one of the world’s five largest companies by market cap. With social media’s huge impact on consumption, it keeps showing exceptional growth. PSG Group

“PSG offers investors a diverse portfolio of quality businesses….” says Gradidge-Mahura Investments’ Craig Gradidge. “It is run by a high-quality team with a solid track record of making good capital allocation decisions. They also have their own wealth linked to the performance of the portfolio….” Curro

“We may identify growth companies by their competitive advantage, operational leverage and strong management teams, or by their ability to take advantage of socioeconomic trends,” note STANLIB’s Herman van Velze and Theo Botha. This is the case with SA’s fastest-growing private education specialist. British American Tobacco (BAT)

“BAT is a very high-quality, defensive consumer stock, with a global footprint and forward-thinking management,” says Harvard House’s Michael Porter. “It also pays out regular and growing dividends, plus it’s a near-100% rand hedge share.” The company is well diversified, has limited exposure to SA’s weak economy, and well placed to capitalise on next-generation products. Discovery

“Discovery is an SA company that is leading the disruption of risk pricing in the life and health insurance industries, using technology and data,” says PSG Asset Management’s Shaun le Roux. “Their shared-value model (Vitality) is being adopted and co-branded by heavyweight insurers in all the world’s markets of size.”

He adds that it’s run by a management team with a track record of innovation, sizeable shareholding and willingness to invest for the long run. Shoprite

Marriott’s Brian Vambe says Shoprite’s major differentiator has been early investment in centralised distribution and logistics and close ties with suppliers, allowing it to control its own supply chain and reduce costs of stores incorporating big loading and storage areas. “…the group continues to seize new opportunities for growth while improving its value proposition to customers.”

Its share price and dividend payments have grown around 20% p.a. since 1997. Tiger Brands

“Tiger Brands is a very high-quality business with strong returns on invested capital through strong brands that is trading at an attractive price as an entry point,” says 27four Investment Managers’ Nadir Thokan.

“The return on invested capital within its core brands … remains phenomenally attractive with an average return on equity well above the average JSE-listed company.” Barloworld

“… higher commodity prices, a recovery in mining equipment orders and an improvement in the group’s DRC operations should drive the profit growth recovery in the 2017 and 2018 financial years. A declining interest rate cycle should also provide some underpin to new vehicle sales….” says Investec Asset Management’s John Thomson.

This article was first published on investor.moneyweb.co.za