INVSTR Stock Picks
Some seasoned INVSTRs might say “Sell in May and Go Away” but our very own “Buffett of Bothaville” says “Buy in June and sing a tune”.
Here is a couple of his medium to long-term stock picks INVSTRs should take note of as some might have you singing with joy.
Henno Nel's top 3 stock picks are:
Dis-Chem Pharmacies Limited (DCP)
Dischem announced plans to offer Covid-19 vaccines through their retail outlets, this can be a major plus point since the state is not doing too well with their vaccine rollout programme, people will be looking at alternatives, and Dis-chem is one of them. Dis-Chem says it has the capability to vaccinate 800,000 people per month! As more and more people are shopping online, the Group experienced significant online sales growth of 260.7%!
I also anticipate that Dis-chem will continue to see a growth in online sales which will also boost the Group's revenue. Dischem announced earnings per share (EPS) and headline earnings per share (HEPS) are both 77.8 cents per share, an increase of 11.8%.
During the twelve-month period from 1 March 2020 to 28 February 2021, Dis-Chem recorded Group revenue growth of 9.6% to R26.3 billion.
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Afrimat Limited is a very well-diversified company that announced what will be its biggest acquisition to date, being the acquisition of the Gravenhage manganese mining right and associated assets in the Northern Cape.
According to Afrimat CEO Mr. van Heerden, “Manganese is another mineral that has a better margin through the cycle than any of our other businesses; it has a much bigger market and it earns foreign currency, so it gives us a hedge against the rand.”
“Afrimat CEO Andries van Heerden says the group has achieved a compound average growth rate in profit after tax of 22% between February 2009 and February 2021 and the diversification has made the group more resilient.” - MoneyWeb
In Afrimat's Audited summary consolidated financial statements for the year ended 28 February 2021, they reported that the Group’s revenue is up by 11,8% to R3,7 billion, their Operating profit is up 47,5% to R886,3 million.
Afrimat has a focused and managed team, they also learned from the 2008 financial crisis, and their stock price proved it during the COVID-19 crash.
Their purchase of the manganese mine Gravenhage in the Northern Cape was a great move and their results proved it and looking at their results this is only the beginning.
Which makes it a perfect stock for long term INVSTRs.
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Harmony Gold Mining Company Limited (HAR)
Harmony is a gold and copper mining and exploration company that operates in South Africa and Papua New Guinea, one of the world’s premier new gold-copper regions.
“JSE-listed Harmony posted a 360% increase in adjusted earnings before interest, taxation, depreciation and amortisation of R9.4 billion from R2.05bn a year earlier on the improved gold price, better grades and production numbers post the acquisition of Mponeng.” -IOL News
Harmony acquired Mponeng from AngloGold Ashanti in 2020, they enjoyed a 23% higher rand gold price at R868 964/kg during the 9 months ended March 2021 and posted a 13.5% increase in production to 34 969kg (1 124 274 oz)
The acquisition of Mponeng, also known as the richest mine in South Africa, was a great move forward, and looking at their results they have struck gold, literally!
For medium to long term INVSTRs who love the mining industry, this is definitely a stock to look at!
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Informed decisions
If you are a medium to long term investor these are great local stocks, on the platform, these are also great well-diversified stocks and all of them have proven to be "pandemic proof". You can clearly see that the pandemic didn't affect these stocks as much as other stocks.
The two mining companies bought great mines with a lot of potential and Dis-chem is becoming a rising star when it comes to online shopping.
Remember not to panic sell, and make sure you invest in companies you understand!
New to investing
and want to learn more about other INVSTRs stock picks?
Read: Three (Ess)ential Stock Picks
Henno Nel
INVSTR
Source: Henno Nel, Money Web
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