Movers and Shakers this Past Week - Plus 3 to buy and 2 to sell
Industrials down 3%
Industrials took the brunt of weaker markets last week as concerns regarding the economic outlook post US elections weighed on sentiment. Woolies was down 6,3% and several other industrial shares fell by approximately 4%.
Naspers down 7,9%
Rand strength and weakness in social media stocks put pressure on Naspers. Facebook was down 8,6% while Groupon fell 19%. Some analysts feel FB has reached its highest growth rate and that slower growth should be expected in future.
Oil down 10,1%
Oil prices were sharply lower as implementation of OPEC production cuts were called into question. Sasol fell 5% as the stronger Rand added to general market weakness; the JSE All Share Index was 2,4% softer over the week.
Gold stocks up 3,8%
Gold stocks bucked the trend; caution has led to a rally in the GOLD price as global investors sit on the side lines ahead of the US elections.
Two Stocks to Buy
Buy Mediclinic (149,00)
Reasonably valued again?
Mediclinic shares look attractive after a 30% retracement since finalising the merger with Al Noor Hospital group. Healthcare is seen as defensive and has performed well in this market. Delays and regulatory changes in the UAE are being overcome. The forward PE has unwound to 18x, which compares favourably with the rest of the sector.
New Management Structure.
Richemont has announced a management restructure after the group posted a fall in sales and profits across all main operating regions. Richemont feels the changes are necessary to respond to the industry crisis.
Two Stcoks To Sell
Gold’s recent trot back above $1300 and a good trading statement from Sybanye has pushed the share price in the last week. A correction can be expected with concerns around the US economic outlook.
Sell Rand vs US Dollar
Rand overbought on politicking...
The Rand touched one year highs against the US Dollar last week on positive sentiment in the wake of the NPA’s withdrawal of charges on Pravin Gordhan and the high court instruction to the Public Protectors to release the report on State Capture. Focus is likely to shift back to global issues this week and some weakness can be expected. Find out how to invest and protect yourself from the rand financial time bomb here.
Guy Algeo is Director of Prodigy Asset Management.