WATCH: Stock picks — Rand Merchant Bank and Gindrod Shipping

Deryck Janse van Rensburg from Anchor Securities chose Rand Merchant Bank as his stock pick of the day and Drikus Combrinck from Capicraft chose Grindrod Shipping.

Janse van Rensburg said “a sum of the parts calculation” on Rand Merchant Bank shows you get mostly Outsurance, Discovery and Momentum, “which is not doing too well at the moment but one should mainly focus on the Outsurance business. If you look at the past three to four years, it’s a business that has delivered 15% headlines earnings per share growth year on year and three to four years ago it was the same price, so technically it has gotten cheaper although it stayed at the same price.”

Combrinck said Grindrod Shipping shares have “taken a nosedive in the last few weeks, there is an indiscriminate sell in the market and it seems that the supply and demand equation for the shipping industry has turned for the better. If inflation rates go up globally it will benefit shipping companies.”