Through the unsettling times of the credit crunch, huge opportunities opened up on the local stock market. The problem was that most investors were so burned by the downturn that that wouldn’t consider getting back in after March 2009. But before most could clear their eyes, the JSE was up 26%, mostly influenced by net international investors purchasing R75.4bn of shares in 2009. One might feel that getting into the market now would be chasing the bull market a bit..
My picks for the year are as follows:
Archelor Mittal. I feel that as China has to support restocking of depleted reserves, and industries start to pick up – particularly the manufacturing, and later in 2010 the automobile industry, steel prices are set to rise. I’m buying at R105.00 and planning on selling at R150 in June/July. If you want to buy stocks like this but is still unsure when to sell, then you might be able to learn a thing or two on courses like the Invest Diva course.
Exxaro Resources. Eskom has recently secured My quick loans abroad to get out of jail. I feel the pressure of a recovering economy will demand higher electricity generation, and the initiation of sales to Medupi Power station to come in as a strong revenue after June 2010. Holding stock from R81.00. Planning on selling in August at R150 odd. Today it is R110.00.
Metorex. Recently Metorex announced the selling out of their Copper hedge. Although carrying a huge amount of debt on their balance sheet, should China remain on track to grow at 8%, the demand for electronics to increase, and the copper price to strengthen, I think the share has legs to R10.00 in November. I’m already in the share, but you can buy it for R5.30 today. Risk associated is the DRC political environment.
Firstrand. The risk adverse investors are diving into Standard Bank. With their ties to China and centralised model, they will do well. I think Firstrand, which is slightly more entrepreneurially focused, has a great range of opportunities though. It might sell out of Momentum or Outsurance, and rationalise its product offering. Corridor investing from India and China into Africa will help the group to make profits off a low base after a shocker two years. I also happen to work here and am impressed every day by the intellect and savvy insight that the employees have into opportunities. Buy in today at R19.00, sell in September for R26.00.
Bidvest. This company already shows fantastic internal diversifation across the services, financial and international industries. Offshore industries account for 40% of revenue, mostly in the catering and food services industry, and these will recover throughout the year. Services to 2010 World Cup and the possibility of acquisitions make this a good opportunity stock for me. But at R128.00 Hold through until December for a hopeful R190.00.
Summary is thus:
| Equity | Buy Price | Sell Price | Sell Date |
| Archelor Mittal | 105.00 | 150.00 | June |
| Exxaro | 110.00 | 150.00 | August |
| Metorex | 5.30 | 10.00 | November |
| Firstrand | 19.00 | 26.00 | September |
| Bidvest | 128.00 | 190.00 | December |
And for a bit of high risk fun stuff, I might long some Berkshire Hathaway and Google Single Stock Futures. Dont know if you knew you could trade these on the SA Futures Exchange. But you can. And you can buy your wife Louis Vuitton SSFs, instead of the handbag..Maybe..