We spoke to Anthea Gardner, managing partner at Cartesian Capital, to find out what stocks might be suitable for that special person in your life, depending on their particular likes:
For the health-conscious person
While a gym towel might get stinky and a health gadget could become outdated, Aspen Pharma (stock code: APN) shares have produced outstanding returns for shareholders since first listing in 1997.
Led by its founder and 2016 Entrepreneur of the Year (All Africa Business Leaders), Stephen Saad, Aspen is one of only four competitors in the generics space and is the second-largest in the anticoagulant market.
“The share is currently trading well below its historic 12-month forward price-to- earnings ratio. Historically an acquisitive business, we expect 2017 earnings to get a boost from the recently concluded deals, which included purchases of the AstraZeneca and GlaxoSmithKline anaesthetics portfolio,” Gardner says.
For the person who believes in improving their knowledge constantly
Benjamin Franklin said that “an investment in education always pays the best interest”.
The JSE currently offers two options in the listed private schools space in Curro Holdings and AdvTech. “Our preferred option is AdvTech (stock code: ADH). This fast growing and resilient business fits neatly between the public school and highly priced private school divisions,” she says.
Gardner points out that after recently completing a capital raise where the World Bank took up a 2.5% stake in the business, AdvTech looks poised, to expand not only across the continent, but also into the private university division.
“Despite the share price’s 34% rally in 2016, we expect more upside as the group expands into a sector in high demand,” she notes.
For the foodie
Food is a product that is always in demand regardless of the market cycles and Western Cape-based food producer Rhodes Food Group (stock code RFG) has returned 130% to shareholders since listing on the JSE in October 2014.
Gardner says an intentional focus on core product categories and product innovation has yielded market share growth, with notable success in the fruit juice and baby food categories.
“The share currently trades on a forward price-to-earnings ratio of 17.1 times, which is slightly ahead of the peer group but must be contrasted with the business’ superior earnings growth profile. Post 2017 deal flow, we expect that management will be able to sustainably grow earnings at around 20% per annum and on this basis we think Rhodes is a worthy gift,” she says.
For the romantic at heart
While booking a weekend away could cost you an arm and a leg, investing in Sun International (stock code: SUI), represents an opportunity to buy a quality share at mispriced levels not often seen.
“We’re looking forward to the group’s unveiling of Times Square hotel and casino in Pretoria this year, which will be SA’s second-largest casino, and is set to contribute more than R1bn in annualised ebitda adding R32 per share in intrinsic value. 2017 is also the year the South American business, Sun Dreams, is fully incorporated in Sun International’s financials, resulting in material earnings accretion,” Gardner concludes.
Neesa Moodley has been a personal finance journalist for 12 years. You can find more of her articles here.