🌍 Worldwide Markets Ep. 644 – 20 August 2024

🎙️ Hosted by Simon Brown

This week's episode dives into Buffett's latest moves, Google's iconic IPO, and big results from Standard Bank, MTN, and Sasol. Here's what you need to know:

• Berkshire Hathaway picked up UnitedHealth (UNH).
• Stock has fallen from $600 → $308 due to federal investigations ⚖️.
• On paper, valuation looks attractive:
  • Forward PE ~19 (below long-term average).
  • Price-to-book ~2.9 vs decade average of 4.9.
• Analysts split: 2 sells, 5 holds, 12 buys, 6 strong buys.
• ⚠️ Simon's take: "Don't blindly follow Buffett. Healthcare is a regulatory minefield. Use it as a starting point, not a buy signal."

• Johnson & Johnson* (JNJ) – more stable exposure.
• Healthcare services & REITs (e.g. hospitals, medical equipment).
• ETFs on JSE:
  • Satrix Healthcare Innovation ETF (STXHLT).
  • Signia's healthcare exposure sits in their active funds.
• Note: Active ETFs will soon be added to local databases ✅.

• ROE: 19.1% – huge number.
• Forward PE: 8 (cheap vs historical 10.1).
• Dividend yield: 6.6% 💰.
• Price-to-book: 1.4 (in line with decade average).
• Expanding strongly across Africa 🌍.
• Simon: "Boring, quality portfolio stock. I like it, but waiting for cheaper entry near 240."

Standard Bank | Weekly

• Headline numbers looked great due to base effects from currency collapses in Ghana 🇬🇭 & Nigeria 🇳🇬.
• Market unimpressed: stock fell 8% 📉.
• Still strong 1-year return: +77% (incl. dividends +83%).
• Forward PE ~13.5 vs long-term 25 → appears undervalued.
• Risks: exec churn, CAPEX-heavy, regulatory hurdles.
• Simon: "Not a fan of telcos – data is just a utility."

• Stock bounced from R50 → R100.
• Weak oil price outlook could hurt 📉.
• Operations improving, second-half expected stronger.
• Simon's take: "Not a long-term hold. More of a trade: buy around R100, maybe ride it to R140, then get out."

• IPO'd in 2004 via Dutch Auction – gave retail investors equal footing vs institutions.
• Raised $1.66bn at $85/share.
• Today's market cap ~ $2.5 trillion 🤯.
• Return: ~8,000% since IPO 🚀.
• Fun fact: for years, Domino's Pizza IPO (same week) had similar returns 🍕 vs 🔍, but Google pulled ahead.
• Regulatory cloud: pending US judgment in August could hit stock short term ⚖️ → Simon says: "If it falls, I'll be buying."

• Don't just copy Buffett – do your homework 📝.
• Healthcare remains risky but ETFs & REITs offer cleaner exposure.
• Standard Bank looks solid, MTN looks risky, Sasol looks tradable.
• Google's IPO remains one of the best investments of all time – and could still offer value despite regulation headwinds.

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Simon Brown

* I hold ungeared positions.

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