Finding that perfect share

Transcription

1 Finding that perfect share Simon Brown JSE Power Hour 9th March 2017 #JSE

2 Disclaimer The information and opinions stated in this presentation / document / video / webinar are of a general nature, have been prepared solely for information purposes and do not constitute any advice or recommendation to conclude any transaction or enter into any agreement. It is strongly recommended that every recipient seek appropriate professional advice before acting on any information contained herein. Whilst every care has been taken in preparing this document, no representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or representations. All information contained herein is subject to change after publication at any time without notice. The past performance of any investment product is not an indication of future performance.

3 Process ü Satellite / core ü Core ü Exchanged Traded Funds (ETFs) ü Tax-free ü Satellite ü Stocks ü Value / blue chips / mid cap / small cap

4 ETFs Long term portfolio Decades Capital growth is the focus Cash returns / dividends not my current focus Cost aware

5 Satellite / Core Exchange Traded Funds (ETFs) Tax-free My portfolio è

6 My portfolio Trading 10% BIL, CPI, CLH, DSY, FBR, MFL, CFR, SOL, SHP & WHL Lazy, ALSI & NFEMOM Second tier 10% TON, SNV & CGR Till death 30% Core ETFs 50% CSEW40, DBXWD & PTXTEN My portfolio è

7 Satellite Growth High PE high growth potential Value Buy quality when cheap Income Focus on high dividend yielding stocks / ETPs Small / mid

8 Irreplaceable and impenetrable Be selective Buy at right price (cheap) An hold Basic fundamentals PE (value) / DY (cash) / NAV (balance sheet) Buy winning stocks in winning sectors

9 Porters 5 Forces

10 CPI* Substitute products BTC, cashless,?? New entrants Customer power Supply power Competitive industry Legislative risks? Possible, unlikely Need Reserve Bank Absolutely (change banks) But do we? Do we change to CPI? n/a? Absolutely Reserve Bank

11 CPI* Good Cost to customer Access / simplicity Cost-to-income Bad Bad debts Big banks?

12 SHP* Substitute products New entrants Customer power Supply power Competitive industry Legislative risks? None, we need to eat Could shop else where Possible, but very hard (CHP) Absolutely (change brand) But price / location Zero Absolutely None

13 SHP* Good Margins Rest of Africa Low cost / Low LSM Bad PIK, SPP, MSM

14 Fundamental charts Chart over seven years PE Use data points at financial mid & year end Fundamental charts

15 Woolies Details, follow link from è

16 Woolies (7201c) Buying up to 9195c

17 Doing the math Average PE / forward PE * current share price WHL Average PE ~ 18.9x Forward PE ~ 14.8x Current share price 7201c = 18.9 / 14.8 * 7201c = 9195c

18 Recap Know your company Know why you bought it Buy the best Sector Stock within sector

19

20 Questions?

21 Contact Simon Brown

22 Disclaimer The information and opinions stated in this presentation / document / video / webinar are of a general nature, have been prepared solely for information purposes and do not constitute any advice or recommendation to conclude any transaction or enter into any agreement. It is strongly recommended that every recipient seek appropriate professional advice before acting on any information contained herein. Whilst every care has been taken in preparing this document, no representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or representations. All information contained herein is subject to change after publication at any time without notice. The past performance of any investment product is not an indication of future performance.