Ashraf Mohamed, independent analyst
Buy: Karooooo
Its expansion into Southeast Asia, where in the past financial year revenue grew 32%, and the much-anticipated agreements with new corporates in Europe, will definitely provide upside. It is a software as a service company and has really pivoted away from the tracking business to a services business. Its software helps companies become more efficient in terms of logistics and moving products around. The group has very strong cash flow, it paid out a handsome dividend and market growth in South Africa has been in excess of 10% over the past three years.
Sell: Shoprite
In the near term I think it’s discounted all the good news and even though it does have some upside, I think it’s going to be capped out by the ability of the consumer to spend. In addition, the supply chain for fresh produce is still not working that well given load-shedding challenges, so that poses a risk to the margin. Given the way it does distribution, I think it will be a bit more affected than other retailers.