Picture: ISTOCK
Picture: ISTOCK

Chantal Marx from FNB Securities chose KAP Industrial as her stock pick of the day and Nick Crail from Ashburton Investments chose Vodacom.

Marx said KAP was a classic SA Inc stock. “A few things that have weighed on the share price, the first and probably most significant being that it happened to be in the same vicinity as Steinhoff when they blew up. They didn’t really have any kind of relationship with Steinhoff from a sourcing, acquisition or management perspective, but Steinhoff was one of KAP’s largest shareholders and Steinhoff had to start selling KAP shares in order to finance some of their debt repayments.

“It’s gone down to below R8 and it’s still a really well-run business although it’s a little bit boring, but boring is good and if we expect economic growth to accelerate over time and we think that structural reforms actually are going to come through, eventually, KAP is a very good way to play that and it looks exceptionally cheap,” she said.

Crail said that from a technological perspective, internet data would continue to be a significant driver.

“Vodacom has a significant market lead in SA and they have other opportunities in Kenya.… The current price at R138 was last seen around five years ago and a lot of cash could be generated.”

Chantal Marx from FNB Securities talks to Business Day TV about KAP Industrial and Nick Crail from Ashburton Investments discusses Vodacom


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