Siboniso Nxumalo from Old Mutual Investments chose Reunert and Graeme Körner from Körner Perspective suggested investing in holding companies that are trading at excessive discounts to net asset value (NAV), including African Rainbow Capital, Ethos Capital and Remgro.
Nxumalo said: “My pick is an industrial company in SA called Reunert. We like the management, it’s a very stable company and we think that it’s not earning at its peak earnings. They have a solid balance sheet and I think the price is very attractive and it pays a fantastic dividend.”
Körner said: “What we’ve been talking about is the theme that the recovery is probably under way, so if you believe in the hypothesis that the markets will get better … these underlying portfolio holdings will recover, the NAVs will swell and over time, we believe, that those NAV discounts will narrow to more sensible levels.”