Caroline Cremen from Adviceworx chose Richemont as her stock pick of the day and Gerbrand Smit from NeFG Fund Management chose Aspen Pharmacare. Cremen said the China effect has dampened Richemont’s stock price. “Richemont is a quality company and a rand hedge, completely out of SA. Richemont has also managed to keep its brand in demand despite the ‘smart watch’ era, the company managed to cut costs and still grow market share and profits.” Smit said Aspen has brilliant entrepreneurial management and the owners still have the original shares that they owned in the company. “They may have added a lot of debt to the balance sheet but also added similar levels of cash flow to the balance sheet. Stock is trading at R259 a share on a 13 price-earnings (PE) multiple and if Aspen do their synergies they are talking about, you’re actually buying these stocks at a 10 PE multiple 18 months out.”
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