Stock Watch

Stock Watch - Stock Picks — ARM & Fortress


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Mark du Toit from Courtney Capital Private Wealth chose African Rainbow Minerals as his stock pick of the day and Ashraf Mohamed from Arqaam Capital chose Fortress REIT.
du Toit said: "We like the fact that we have seen a lot of supplies coming out of the comodities space over the last ten years. At this point these companies are going to be throwing off a lot of free cash flow and ARM are still in the single digits multiple PE and it's a diversified miner so you get a bit more protection from the fact that they have more than one revenue stream.
Mohamed said: "I think there has been a lot of cleaning up within that group. They have an entirely new management team. Mark Stevens, one of the "old guard" has now officially stepped down and they offer a 13% forward dividend yield which is very attractive so you are now getting paid to take the risk. I like shares that pay you to take the risk. Most of their risks like NAV write downs have been taken into the share price so from this point onwards and it might take a while, you are waiting for that catalyst and for the buyers to say, yes these earnings are clean and we are comfortable, which will lead to the buy in. They have a very good management team in place now and I think the quality of earnings will demonstrate that."
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