Stock Watch - Stock pick — City Lodge and Royal Dutch Shell
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Graeme Körner from Körner Perspective chose City Lodge as his stock pick of the day and Drikus Combrinck from Capicraft chose Royal Dutch Shell.
Körner said: "If you fast-track six months, things will start returning to normal. City Lodge was a business that I think bored a lot of people because it just did well. If you look over the last couple of years they were delivering earnings of around a R8 a share. I'm not saying they're going to get back to that in a hurry but there's quite a lot of pent up business travel and I would assume that City Lodge would be a beneficiary of that."
Combrink said: "I picked it a while ago, and the stock is Royal Dutch Shell, it's worth at least double and if the oil price goes to $50 next year. They have cut the dividend by about 65% and it still remains at 3% dividend. They are quite profitable at $40 which most oil producers can't say. Once the oil recovers in 2 to 3 years time you will have a higher oil price than you had pre Covid."
Körner said: "If you fast-track six months, things will start returning to normal. City Lodge was a business that I think bored a lot of people because it just did well. If you look over the last couple of years they were delivering earnings of around a R8 a share. I'm not saying they're going to get back to that in a hurry but there's quite a lot of pent up business travel and I would assume that City Lodge would be a beneficiary of that."
Combrink said: "I picked it a while ago, and the stock is Royal Dutch Shell, it's worth at least double and if the oil price goes to $50 next year. They have cut the dividend by about 65% and it still remains at 3% dividend. They are quite profitable at $40 which most oil producers can't say. Once the oil recovers in 2 to 3 years time you will have a higher oil price than you had pre Covid."