🌍 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.
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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
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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JSE – The JSE is a registered trademark of the JSE Limited.
JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.
