Identifying opportunities in SA markets

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Are the chips all down? Or is this the greatest investment opportunity we may see in our lives? I believe there is a massive opportunity. The massive drop in share prices has opened up opportunities for investors who are in it for the long-haul, as uncertainty will show continued volatility in the short-term. 

As a global recession is virtually unavoidable, we have identified companies with three key traits that we believe will show resurgence. These companies have:

  • lower debt levels, 
  • higher cash levels 
  • companies not directly negatively impacted by the virus and its consequences and, 
  • companies with high growth potential, especially in the 4th industrial revolution.

Is this a case where Warren Buffet cautioned to be "fearful when others are greedy, and be greedy when others are fearful?"

JSE listed companies:

Prosus

With their largest holding company being Tencent Holdings Ltd (Chinese multinational conglomerate holding company), we believe the recent pullback created a great buying opportunity, as people are increasing time spent online at home. This is a great business to own at any time for the long term.

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Prosus on EasyEquities
Prosus-EasyEquities-share

Adcock Ingram

If you go to pharmaceutical stores, you will see that health-related products are not collecting dust on the shelves. Adcock provides various products related to fighting the flu. The Coronavirus pandemic might impact their sales positively. They also recently bought back some of their shares which is always a good sign of confidence from management.

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Adcock Ingram on EasyEquities
Adcock-Ingram-EasyEquities

Purple Group

Holding company of EasyEquities, GT247.com and Emperor Asset Management. We especially like EasyEquities:

  • Trade volumes increase in these volatile times
  • The number of clients continuously increase, with the company offering value to clients (simplistic, low fees, easy to use) and,
  • Where there’s value, there is a good quality business for the long term.

 It is still a small company in terms of market cap, however they have massive growth opportunities for the long term as they are changing the way people invest. Some people even call them the “Capitec of investing."

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Purple Group on EasyEquities
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Top 40 ETFs

When one is uncertain of exactly which individual shares to buy, ETF’s are always great options as you buy a basket of shares, which is a “safer” option - essentially 'Buying the market.'

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ETFs on EasyETFs
EasyETFs 

There are companies that we are currently steering clear of, even though their share prices have dropped enormously. The reason for this, is that we believe the global panic is not completely over, and that these companies might still feel the impact over the next few months as fear continues to loom.

That is after all how he made most of his wealth after the 2008 stock market crisis when he bought stocks at their absolute lows. Pandemics and crises like these have happened before, and markets always recover once global sentiment changes. 

READ:
Spotting Opportunities in US Markets

Higgo van Biljon
Easy user, Founder & CEO FinMeUp

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by Higgo van Biljon, Founder and Chief Executive Officer of FinMeUp as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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