WATCH: Stock picks — Hudaco and YeboYethu

Ricus Reeders from PSG Wealth chose Hudaco Industries as his stock pick of the day and Bright Khumalo from Vestact chose YeboYethu.

Reeders said Hudaco is “a historically brilliantly run company with a high return on equity”.

“You are picking it up at a starting price earnings of around 13, even if we do not have a normal balance in our economy.… [We are] sitting with a structural problem that’s going to carry on for longer, and this recession will go on longer, it’s at a cheap value as long as you don’t mind price volatility in the next year. In two to three years from now you ought to make your money back.”

YeboYethu is Vodacom’s empowerment transaction.

Khumalo said” “It is a brilliant company which is funded mostly by debt and is an extension of the Vodacom share price, plus minus the debt. The question is always whether a company can pay down its debts fast enough to realise a lot of equity for their shareholders, and looking at the current yield of what Vodacom is, I think they can do it. I think as a black shareholder it’s really a nice place to be currently.”