Italtile has for some time been IM’s preferred company in the JSE’s brittle building materials sector.In September 2019 we recommended a long Italtile, short Cashbuild play. It was a profitable trade, as Cashbuild subsequently heavily underperformed. In February we reiterated Italtile was the stock to follow in the sector, and being long on it remained profitable.Then Covid-19 swept SA and the JSE succumbed to a bloodbath of selling. Hardly anything was immune. Both Italtile and Cashbuild were hit; the latter was savaged. But they have recovered from their late-March lows. The performance in the year to date is: Italtile -22.4% and Cashbuild -30.3%.Each counter has its strength and each is a leader in its market segment. Each has a strong balance sheet and sits on acres of cash, which will protect it after the lockdown.IM continues to prefer Italtile for the post Covid-19 environment. Its product range is predominantly in the refurbishment and upgrade segment. House-building post th...

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