Chantal Marx of FNB Wealth & Investments on what the smart money is doing
24 November 2022 - 05:00
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Chantal Marx, head of research at FNB Wealth & Investments
BUY:Mondi
This is a stock I’ve liked for some time. One of the reasons the share has been under pressure is its exposure to Russia — it had biological assets and a manufacturing operation in that country, but it has sold the business and the share has done nothing. Yet it generates a lot of cash, and has a high return on equity and return on invested capital. There is good thematic support for its products; it’s defensive given its involvement in nondiscretionary products, going into a cyclical downturn. And then technically, it’s starting to look a little better. Trading volumes are improving and there are a few momentum indicators telling us that something is happening there. Together with the fundamentals, it’s a double buy signal.
SELL: Investec
We are taking profits in Investec, which has run incredibly hard. We were telling clients a month ago it was a hard-core buy as it was so beaten down. Even after the results were released recently, the share price continued to do well. I don’t hate it; I think it’s a good-quality business, but now it just looks like it’s run a little too hard.
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BROKERS’ NOTES: Buy Mondi, sell Investec
Chantal Marx of FNB Wealth & Investments on what the smart money is doing
Chantal Marx, head of research at FNB Wealth & Investments
BUY: Mondi
This is a stock I’ve liked for some time. One of the reasons the share has been under pressure is its exposure to Russia — it had biological assets and a manufacturing operation in that country, but it has sold the business and the share has done nothing. Yet it generates a lot of cash, and has a high return on equity and return on invested capital. There is good thematic support for its products; it’s defensive given its involvement in nondiscretionary products, going into a cyclical downturn. And then technically, it’s starting to look a little better. Trading volumes are improving and there are a few momentum indicators telling us that something is happening there. Together with the fundamentals, it’s a double buy signal.
SELL: Investec
We are taking profits in Investec, which has run incredibly hard. We were telling clients a month ago it was a hard-core buy as it was so beaten down. Even after the results were released recently, the share price continued to do well. I don’t hate it; I think it’s a good-quality business, but now it just looks like it’s run a little too hard.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.