WATCH: Stock picks — Metair and Absa
Mark du Toit from Courtney Capital Private Wealth chose Metair Investments as his stock pick of the day and Ashraf Mohamed from Arqaam Capital chose Absa.
Du Toit said that Metair’s acquisition in Turkey is a bit unfortunate due to the current political situation, “but they still export a lot of batteries out of Turkey so the production costs in the factories are reduced due to their weakening currency. The revenue is protected as the batteries are exported in euros. The company was unfairly punished due to media hype about not needing car batteries as electric cars would be replacing petrol and diesel motor vehicles, but they are producing a record number of car batteries and are exploring lithium ion batteries as another possible revenue stream,” he said.
Mohamed pointed to Absa’ Portfolio Manager at Arqaam Capital chose Absa (ABG) as his stock pick of the day, with their R4,30 dividend coming up in the next ten days. Irrespective of the management team the business will turn around. They are coming of a fairly low base in a number of areas especially on corporate and investment banking clients have wanted certainty around how the structures would look which they now have. Absa can now go and hunt for that new business. The market has taken a jaded view on Absa and its trading to a discount in relation to all the other banks but if one looks two years out Absa will be showing the best earnings growth says Mohamed.
Mark du Toit from Courtney Capital Private Wealth talks to Business Day TV about Metair and Ashraf Mohamed from Arqaam Capital discusses Absa
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