Buffett Buys UnitedHealth, should you? | The Google Listing with a Twist Turns 21

🌍 Worldwide Markets Ep. 644 – 20 August 2024

🎙️ Hosted by Simon Brown

This week’s episode dives into Buffett’s latest moves, Google’s iconic IPO, and big results from Standard Bank, MTN, and Sasol. Here’s what you need to know:

📈 Buffett Buys UnitedHealth – Should You Follow?

Berkshire Hathaway picked up UnitedHealth (UNH).
Stock has fallen from $600 → $308 due to federal investigations ⚖️.
On paper, valuation looks attractive:
- Forward PE ~19 (below long-term average).
- Price-to-book ~2.9 vs decade average of 4.9.
Analysts split: 2 sells, 5 holds, 12 buys, 6 strong buys.
⚠️ Simon’s take: “Don’t blindly follow Buffett. Healthcare is a regulatory minefield. Use it as a starting point, not a buy signal.”

🩺 Healthcare Investing Alternatives

Johnson & Johnson* (JNJ) – more stable exposure.
Healthcare services & REITs (e.g. hospitals, medical equipment).
ETFs on JSE:
- Satrix Healthcare Innovation ETF (STXHLT).
- Signia’s healthcare exposure sits in their active funds.
Note: Active ETFs will soon be added to local databases ✅.

🏦 Standard Bank Results

ROE: 19.1% – huge number.
Forward PE: 8 (cheap vs historical 10.1).
Dividend yield: 6.6% 💰.
Price-to-book: 1.4 (in line with decade average).
Expanding strongly across Africa 🌍.
Simon: “Boring, quality portfolio stock. I like it, but waiting for cheaper entry near 240.”

Standard Bank | Weekly

📱 MTN Results

Headline numbers looked great due to base effects from currency collapses in Ghana 🇬🇭 & Nigeria 🇳🇬.
Market unimpressed: stock fell 8% 📉.
Still strong 1-year return: +77% (incl. dividends +83%).
Forward PE ~13.5 vs long-term 25 → appears undervalued.
Risks: exec churn, CAPEX-heavy, regulatory hurdles.
Simon: “Not a fan of telcos – data is just a utility.”

🛢️ Sasol Update

Stock bounced from R50 → R100.
Weak oil price outlook could hurt 📉.
Operations improving, second-half expected stronger.
Simon’s take: “Not a long-term hold. More of a trade: buy around R100, maybe ride it to R140, then get out.”

Sasol Weekly

🔎 Google’s IPO Turns 21 🎂

IPO’d in 2004 via Dutch Auction – gave retail investors equal footing vs institutions.
Raised $1.66bn at $85/share.
Today’s market cap ~ $2.5 trillion 🤯.
Return: ~8,000% since IPO 🚀.
Fun fact: for years, Domino’s Pizza IPO (same week) had similar returns 🍕 vs 🔍, but Google pulled ahead.
Regulatory cloud: pending US judgment in August could hit stock short term ⚖️ → Simon says: “If it falls, I’ll be buying.”

💡 Key Takeaways

Don’t just copy Buffett – do your homework 📝.
Healthcare remains risky but ETFs & REITs offer cleaner exposure.
Standard Bank looks solid, MTN looks risky, Sasol looks tradable.
Google’s IPO remains one of the best investments of all time – and could still offer value despite regulation headwinds.

👉 Worldwide Markets is powered by Standard Bank Global Markets and Shyft – the app that gives you the cheapest forex rates anytime, anywhere 🌍📱.

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

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Wednesdays are all about hard-core investing and trading with Simon Brown’s famous JSE Direct podcast. JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.

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