Sasol, Naspers and Capitec are some of the big names that have been selected by a variety of South African fund managers as their preferred stock picks on the JSE for 2022.
Biznews contacted four of South Africa’s best fund managers for its “share shootout”.
Veteran equity analyst David Shapiro suggested that Naspers and Prosus could be a turnaround story as developments in China seem to have calmed somewhat.
“I love to look for shares that are being absolutely pummelled,” Shapiro said.
“Even though I wouldn’t buy it now, I’m going to give Prosus or Naspers my vote simply because I think things will stabilise in the year ahead in China, and I think you will find a recovery in Tencent.”
Shapiro emphasised that he made his pick in the context of a share shootout, so he is taking a gamble.
One of South Africa’s best performing fund managers in 2021, Piet Viljoen, hedged his bets and went with Sasol and embroiled real estate company Rebosis — specifically Rebosis A shares.
“The world is not investing in oil and gas extraction enough to cope with demand, which will still be there for years and years to come, despite the best efforts,” said Viljoen.
“The world will still need oil, and I think we’ll see significantly higher oil prices because of the underinvestment in oil extraction capacity.”
Viljoen said that Rebosis was not well-liked, but that’s why it’s cheap.
“It had distributable earnings… of over R2.00 per share,” he said.
“They haven’t distributed any dividends, but the earnings are there, and they say they’ve done a deal where they sold the company for multiples of the current share price.”
Banking oracle Kokkie Kooyman sided with JSE darling Capitec. He believes that Gerrie Fourie and his team will continue to take market share despite valuation concerns.
“All the banks in South Africa are cheap. When preparing for this, I looked at the upsides, and it is difficult,” said Kooyman.
“You’ve got Absa and Nedbank trading at low valuations — very low valuations.”
However, due to the current uncertainty with the omicron variant, Kooyman said it’s always better to be with players with a proven track record of being on the front foot.
“In South Africa, these would be FirstRand and Capitec. My pick in this circumstance is Capitec.”
Lastly, Opportune Investments founder Chris Logan went with two risk-averse plays in Zeder and Stor-Age.
Like Kooyman, Logan said the high degree of uncertainty influenced his pick.
“Given the fact that markets have run hard, we are possibly faced with the rising interest rate environment, rising inflation and weak growth. Zeder should be largely immune to this.”
Similarly, Logan said that Stor-Age had shown itself to be immune to economic downturns and the pandemic.
“They recently reported great results. There are only nine other storage real estate investment trusts globally, and they are by far the cheapest of all of them,” stated Logan.
“It’s what I call a low-risk buy.”-BT
