This is the last edition of IM for 2025. Our next one will be at the end of February, at which time I sincerely hope the equity markets will still be holding up.
In closing out the year I asked the IM contributors to draw up their stock selections for 2026. With limited space for this note, I’ll get right to it:
LISTED ON THE JSE:
LARGE CAPS
Reinet Investments: Cash is king. Some great optionality here, with big portfolio positions cashed in. An opportunity to make new investments during a market correction that some feel is long overdue. Prospects for a special dividend must be good too.
Bidcorp: A classy company. With a wide spread of businesses across many economies, this superbly managed food services business should still produce tasty returns.
SMALL CAPS
Hosken Consolidated Investments (HCI): A Johnny-come-lately for value unlock. Other investment companies have closed the gap on intrinsic net assets by various value-unlocking actions. HCI has not signalled any such moves, but intensified pressure from shareholders might well change that in 2026.
Caxton & CTP: Printing money. Where else can you get an operating business that churns compelling cash flows together with a management team that has allocated capital well over the long term for next to nothing? Caxton’s share price pretty much only reflects its cash pile and its stake in listed packaging group Mpact. Surely the cheapest share on the JSE?
PROPERTY
Octodec: A value play with about 9,000 low-income rental apartments, mostly in the Joburg and Tshwane CBDs. It has lagged the Reit sector over the past two years, trades at a 46% discount to NAV and offers a dividend yield of nearly 10%.
Vukile Property Fund: Retail therapy specialists. This stock offers the best of both worlds (offshore and domestic), with its shopping centre portfolio split 65/35 between Iberia and South Africa. Portugal and Spain are set to outperform other Western European economies in GDP and tourism growth for at least the next two years.
LISTED OFFSHORE:
Watsco: Cool runner. The NYSE-listed company is the largest distributor of airconditioning, heating and refrigeration equipment, parts and supplies in the US. Recent regulatory changes to industry standards have caused a temporary disruption to the business. Still, with its long track record, market-leading position and debt-free balance sheet, the company should work through this transitional phase.
Heico Corp: Old-school tech. Established in 1957, this technology-driven company focuses on the aerospace, industrial, defence and electronics sectors. The business provides highly specialised parts for aircraft that require Federal Aviation Administration approval, a process that can take up to a decade for each part.
And for the smallest sliver of your portfolio, a selection of crypto: Zcash, Pax Gold, Cardano and Ripple.
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