Three (Ess)ential Stock Picks

INVSTR Stock Picks

Investing is the one tool that allows you to grow your capital over a long period whilst managing your risk. Peter Lynch said that “It takes remarkable patience to hold on to a stock in a company that excites you, but which everybody else seems to ignore. You begin to think everybody else is right and you are wrong. But where the fundamentals are promising, patience is often rewarded.” It is this philosophy that I hold dear when I invest.

Easy ZAR

MTN Group Limited (MTN)

MTN is a pan-African mobile operator which operates in over 21 markets. The group recently released its Quarter 1(Q1) update which showed that despite a reduction in their subscriber’s base by 1.7 million to 277.9 million due to the restrictions and regulation in the Nigerian market, the company revenue for Q1 was up by 17.8%.

My interest in the company lies in their ambitious 2025 strategy as well as their fintech business and the potential to unlock value as a result of the bundled according to news in the media, if this happens, it could create value for us shareholders unbundling of the fintech unit by 2022, if this happens, it could create value for us shareholders. The company did not pay a dividend during the last financial results but as a dividend lover, I hope they will resume their dividend payments.

I have slowly been buying this company over the last year when the share price was between R60 and R70 with the knowledge that the price at this level undervalued. This stock and I have a love relationship going on, however, I always keep my eye out for possible scandal or two given their history of being fined in the jurisdictions in which they operate.

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Easy TFSA

CoreShares PrefTrax ETF (PREFTX)

Coreshare Preftrax – As most people know I love my dividend income and one of the Exchange Traded Funds that gives me income is the Coreshare Preference share, Exchange Traded Funds (ETF). I have this ETF in my Tax-free account and enjoy getting a quarterly dividend from this ETF.

The top 10 constituents of this ETF include the major banks. Preferences shares take precedent over Ordinary “Normal shares” of a company's shares, so the dividend flow must be serviced to preference shareholders first, as this debt/equity instrument. When buying an Exchange Traded Fund, I like to look at the minimum disclosure document (MDD) to see the past performance and the total expense ratio, which is related to fund operating and management fees of an ETF, ideally the lower this percentage the fee is the better.

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Easy USD

Sea Limited (SE)

SEA Limited which was previously known as Garena was established in 2009, the company is a global consumer internet company based in Singapore. This company three core businesses across digital entertainment, e-commerce, digital payments and financial services. I like this company because of its diversity and how it has grown from being a digital entertainment company to add on the other core business which has resulted in them having 3 core businesses.

The digital entertainment unit known as Garena, Shopee is the mobile e-commerce business, it has been hailed as the next Amazon of Indonesia, the e-commerce arm recently ventured into Brazil to enter the Latin America America market where Mercardo Libra has enjoyed dominance, Shopee has the potential to grow in this region, Shopee is also looking to move into Mexico as part of expanding its Latin America region.

SeaMoney the digital finance company is relatively new. Garena and Shopee are currently the two profitable operations whilst Sea Money is still in its infancy. The company has experienced phenomenal growth in their revenue, however, it is in a growth phase and has yet to make a profit. Based on the business growth to date and the potential of Sea, I believe this stock might become my next multi-bagger, a stock that gives returns that are several times their cost price.

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