Podcast: An investment check list

Simon BrownJSE Direct, Latest

An investment check list

An investment check list

Simon Shares

  • Everybody is freaking out on the Capital&Counties (JSE code: CCO) sell-off, some 50% off the highs of January. Really driven by three things: it had been flying, stronger ZAR against Sterling and concerns about Brexit. Long term not an issue, so if you love the stock nows your chance to get more cheaper.
  • Kristia van Heerden (Just One Lap CEO) tweeted some thoughts from last week’s podcast where I spoke about expectations. Her comment was that managing expectations doesn’t start with investing. It’s also about debt, hating on your job. These need fixing long before investing and certainly no investment will make your job better or the debt suddenly disappear.

Gary Booysen Portfolio Manager Rand Swiss

Gary did a great presentation for the JSE Power Hour last week. In it he looked at current market conditions, volatility and how to manage a share portfolio in these conditions. In this chat Simon also focuses one of his stock picks AdaptIT (JSE code: ADI) and his checklist. The checklist (below) is a simple first filter to find quality stocks worth investigating further. The full video is here.

The check list:

  • 3 year total return +20%
  • Increasing revenue over 5 years
  • Increasing earnings over 5 years
  • Increasing dividends
  • Increasing gross margin
  • Increasing ROE
  • Outstanding shares stable or decreasing
  • PE, P/B, P/S, PEG, FPE in range
  • Current ratio, LT-Debt/Equity
  • Management quality

We Get Mail

  • Ros
    • Once I’ve put my annual R30,000 into my TFSA, and I’ve also reached my tax-deductible limit in terms of my RA contribution, would it still be better to invest within the RA for the tax advantages it provides on withdrawal? Or should I just buy ETFs directly?
  • Brenda
    • My daughter is now in Grade 10. Over the years I have been saving in unit trusts for her university fees. I stopped the monthly debit orders at the beginning of the year when I realised that the performance did not justify the fees. I now have almost R500k in two unit trust. On the one hand I do want some capital protection but also want growth with some income so that she can have funds for a car, deposit for a flat etc. I know that I can do better investing in the market. Should I :
  1. Liquidate the unit trust and open a trading account in her name?
  2. Start with about five shares – I am considering Coronation, Old Mutual, Steinhoff, Discovery and Mediclinic.

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