WATCH: Stock picks — Discovery and Mustek

Graeme Körner from Körner Perspective chose Discovery as his stock pick of the day and Alex Duys from Umthombo Wealth chose Mustek.

Körner said that Discovery remains a good business, an SA Inc stock.

“But what is likeable about this stock is that they are continually adding value to the business, for example, building a bank, an insurance company and Vitality in the UK. They are doing the right things.”

Duys said Mustek was not a “particularly high quality business”, but it does generate good cash flow.

“To give an example, if one looks at the previous year, their buybacks and dividends equalled about 20% of a market cap and they continue to buy more stock back. At some stage they will look to delist. The key for this business is to try and get their capital structure right and the stock is currently trading at about half book value.”