Stock Watch - Stock Picks — Standard Bank and Humana Inc
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Gerbrand Smit from NEFG Fund Managers chose Standard Bank as his stock pick of the day and Jean Pierre Verster from Protea Capital Management chose Humana Inc
Smit said: "Standard Bak ss trading at about 9 — 9.5% PE multiple for the full year's earnings, which is in the long term cheap for them, probably 20% undervalued. I think everybody were worried about the downgrade and I think it's already priced into most our banking stocks locally. These guys have been resilient on the earnings front, much better than most of the other companies on the local front.They are all well positioned in Africa and the IT spend is gone so there's lots of positives for them. I think going forward it probably won't shoot the lights out but I think you'll get a dividend of 6,5% and another 4% or 5% growth out of earnings."
Verster said: "Humana is a health insurer and they had a deal with discovery. I've got a bit of a cold at the moment so it made me look at the healthcare stocks and Humana is one of the big US health insurers. The US healthcare sector is in chaos, a lot of political interference there, you've got the Medicare system for people of 65 years or older or those younger than that but with disabilities and then the Medicaid system which has got a different coverage and then you've got these for-profit health insurers that sell their packages for coverage including for coverage for prescription drugs as they call them in the US and Humana is one of the big players. It has a lot of potential to integrate further across the health-care chain and also it is more focused on their Medicaid and Medicare market. If there is any change to the overall structure of the Republicans coming in and making some changes or even some of the Democratic candidates making changes after November next year it could be to use the Medicaid chassis and rather use that as the base of a new US healthcare system and because Humana focuses more on the Medicaid system they're very well positioned if tha
Smit said: "Standard Bak ss trading at about 9 — 9.5% PE multiple for the full year's earnings, which is in the long term cheap for them, probably 20% undervalued. I think everybody were worried about the downgrade and I think it's already priced into most our banking stocks locally. These guys have been resilient on the earnings front, much better than most of the other companies on the local front.They are all well positioned in Africa and the IT spend is gone so there's lots of positives for them. I think going forward it probably won't shoot the lights out but I think you'll get a dividend of 6,5% and another 4% or 5% growth out of earnings."
Verster said: "Humana is a health insurer and they had a deal with discovery. I've got a bit of a cold at the moment so it made me look at the healthcare stocks and Humana is one of the big US health insurers. The US healthcare sector is in chaos, a lot of political interference there, you've got the Medicare system for people of 65 years or older or those younger than that but with disabilities and then the Medicaid system which has got a different coverage and then you've got these for-profit health insurers that sell their packages for coverage including for coverage for prescription drugs as they call them in the US and Humana is one of the big players. It has a lot of potential to integrate further across the health-care chain and also it is more focused on their Medicaid and Medicare market. If there is any change to the overall structure of the Republicans coming in and making some changes or even some of the Democratic candidates making changes after November next year it could be to use the Medicaid chassis and rather use that as the base of a new US healthcare system and because Humana focuses more on the Medicaid system they're very well positioned if tha