Stock Watch - Stock Picks - Super Group and Vukile Property Fund
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Ashraf Mohamed from Arqaam Capital chose Super Group Ltd as his stock pick of the day and Mark du Toit from Courtney Capital Private Wealth chose Vukile Property Fund
Mohamed said: "My stock pick is Super Group, we have discussed the South African economy, we know how weak it is, we know how vehicle sales have been under pressure. However, I think we are coming to the bottom of that cycle in South Africa. The Australian business will remain under pressure on the motor vehicle sales side, on the logistics side there has been some margined compression but things are starting to pick up especially in Africa. We have seen a recession, although they have not admitted to it in Germany and we have also seen the German economy get some forward momentum. So, with that I think that the European logistics, African logistics and motor vehicles in SA will benefit and give it double digits earnings growth for the next twelve months."
du Toit said: "Sticking with the theme of quality stocks at the right price we like Vukile, we think their management team is particularly strong. We know Laurence Rapp and he is one of the smart, reliable and honest people and they have done a very good job at building up a very nice property portfolio. Roughly 50% in South Africa and 50% offshore - mainly in Spain. Spain is growing 3% GDP growth and 1% inflation so you have a tailwind there. Vukile is also trading at 8.5% dividend yield so at this price with this nice dividend yield, it's quite the stock to have"
Mohamed said: "My stock pick is Super Group, we have discussed the South African economy, we know how weak it is, we know how vehicle sales have been under pressure. However, I think we are coming to the bottom of that cycle in South Africa. The Australian business will remain under pressure on the motor vehicle sales side, on the logistics side there has been some margined compression but things are starting to pick up especially in Africa. We have seen a recession, although they have not admitted to it in Germany and we have also seen the German economy get some forward momentum. So, with that I think that the European logistics, African logistics and motor vehicles in SA will benefit and give it double digits earnings growth for the next twelve months."
du Toit said: "Sticking with the theme of quality stocks at the right price we like Vukile, we think their management team is particularly strong. We know Laurence Rapp and he is one of the smart, reliable and honest people and they have done a very good job at building up a very nice property portfolio. Roughly 50% in South Africa and 50% offshore - mainly in Spain. Spain is growing 3% GDP growth and 1% inflation so you have a tailwind there. Vukile is also trading at 8.5% dividend yield so at this price with this nice dividend yield, it's quite the stock to have"