David Shapiro of Sasfin Wealth on what the smart money is doing
15 February 2024 - 05:00
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David Shapiro, chief global equity strategist: Sasfin Wealth
Buy: Hermès
I think the makers of the Birkin bag are proving to be the leading luxury play. Owning a Hermès product is the ultimate symbol if you’re aspirational and seeking social status. It beats LVMH by a long shot. Recent results revealed good performances across all regions, beating forecasts. Total revenue for 2023 hit €13.4bn, up 21%, with annual recurring operating profitability reaching its highest level ever at 42.1% of sales. The numbers show you how many really, really rich people there are in the world.
Sell: Tobacco
Last time I chose a booze company as my sell pick. I’m still negative on tobacco. I know companies such as British American Tobacco are shifting to noncombustibles and other alternative products but, regardless, the health authorities continue to seek ways to restrict sales across their entire range. If you’re a smoker or a vaper, you’re banished to a corner in basement 8. You’re an outcast. You’re not cool. That’s hardly the foundation on which to build growth. I know these companies generate big cash and pay attractive dividends, but so what?
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
BROKERS’ NOTES: Buy Hermès, sell tobacco
David Shapiro of Sasfin Wealth on what the smart money is doing
David Shapiro, chief global equity strategist: Sasfin Wealth
Buy: Hermès
I think the makers of the Birkin bag are proving to be the leading luxury play. Owning a Hermès product is the ultimate symbol if you’re aspirational and seeking social status. It beats LVMH by a long shot. Recent results revealed good performances across all regions, beating forecasts. Total revenue for 2023 hit €13.4bn, up 21%, with annual recurring operating profitability reaching its highest level ever at 42.1% of sales. The numbers show you how many really, really rich people there are in the world.
Sell: Tobacco
Last time I chose a booze company as my sell pick. I’m still negative on tobacco. I know companies such as British American Tobacco are shifting to noncombustibles and other alternative products but, regardless, the health authorities continue to seek ways to restrict sales across their entire range. If you’re a smoker or a vaper, you’re banished to a corner in basement 8. You’re an outcast. You’re not cool. That’s hardly the foundation on which to build growth. I know these companies generate big cash and pay attractive dividends, but so what?
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.