WATCH: Stock picks — BMW and TFG

Nic Norman-Smith from Lentus Asset Management chose BMW as his stock pick of the day and Chantal Marx from FNB Securities chose TFG.

Norman-Smith said BMW was one of the few car makers that generated high margins.

“When buying BMW stocks, you’re buying into the manufacturer at a very low PE [price-earnings ratio], you’re buying into their finance book as they lend and finance around half of the cars that they sell and they have excess cash on their balance sheet as well,” he said.

Marx said there was still value in SA Inc stocks. 

“If you look at the health of the South African consumer, they have de-leveraged quite a bit over the past few years, which means that they are ready to take on credit and TFG is your play on credit in the South African consumption space.  TFG has also done some improvements to better their merchandising propositions like being quicker to market, responding to different fashion trends, manufacturing a lot of their own goods. They also offer a very handsome dividend yield at the moment,” she said.