WATCH: Stock picks — Absa and Astral Foods
Graeme Körner from Körner Perspective chose Absa as his stock pick of the day and Sekgabo Molelekoa from Umthombo Wealth chose Astral Foods.
Körner said that “without a permanent CEO, Absa and other banks are said to be shrinking violets. We are taking a view that the elections will go according to plan and should get some of that pent up energy in the economy going. When you buy Absa, you’re buying a decent franchise that is free of the shackles of Barclays. You’re buying it on a sub-nine price-earnings ratio and a dividend yield of over 7%.”
Molelekoa said: “You could argue that Astral posted peak margins last year, but we’ve been seeing that production numbers from a farming point of view are looking better than expected towards the end of 2019. Feed costs should also not accelerate as much as we thought, so even if you apply the same costs as you did in 2017 (before the peak margin) you will still come out with a good looking valuation.”
Graeme Körner from Körner Perspective and Sekgabo Molelekoa from Umthombo Wealth talk to Business Day TV
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