Boardroom Talk: Happy Gupta Arrest Day – and stock insights from Piet and Kokkie

Superb editorial leading our website this morning as BizNews.com editor Michael Appel applied first-hand experience and months of State Capture reporting to craft his op-ed on the Gupta arrests. The only area where he and I differ is our belief in whether this day would actually come. Click on the image below to access. .This week's BT has a very different theme:.___STEADY_PAYWALL___.If you haven't discovered it yet, the Corion Report is well worth a look. Produced a day or two after every month end, it provides a superb summary of how investment markets performed in the preceding four weeks. It's followed up with my monthly interview recorded for YouTube with Corion's chief investment officer David Bacher..The most recent edition, released last week, reflected especially good news for two money managers whose mettle has been tested over decades. Piet Viljoen's Counterpoint Value fund rules the roost in unit trust performance. And with his sector best in the one year, three month and one-month rankings, Denker Capital's Kokkie Kooyman financial specialist is also smiling..It's especially satisfying for Viljoen. Seven years ago he lost the mandate to operate the NedGroup Managed Fund, a unit trust he'd been running for 12 years. That public vote of no confidence must have hurt, although Viljoen certainly hid his feelings well. Listening again yesterday to our 2015 interview on the news reflects the man's resilience – and confidence in his process..Piet admitted that his deep value approach was "looking stupid". But yesterday's apparent fool has become today's genius. In the past three years his fund's value has doubled. The Corion Report puts the R744m fund at the top of all General Equity funds for the year to end May, with a return of 31.3%..The Counterpoint Value fund's success is in stark contrast, for instance, to the ten times bigger Coronation Equity fund, whose managers fish in the same stock pool. That heavily marketed unit trust actually lost money for its investors over the same period, giving them negative 2.1% in the same 12 months..I chatted to Viljoen yesterday, asking how he managed to produce such a great result – and, more importantly, whether he reckons it can be sustained. He was emphatic on both points..The superior return, he noted, was the result of a contrarian view of investing heavily in SA small cap stocks and some of their bigger brothers like MTN and Sasol that were "deeply undervalued". Plus, he completely avoided the Naspers/Prosus train crash, allocating a zero position to the JSE's largest individual counter. For context, Coronation (and many others) was a Naspers/Prosus bull..On the second point, Piet was equally forthright: "It's impossible to keep these kinds of returns rolling. SA assets have done incredibly well over the past few years. They're still not fully priced, but obviously not as cheap as they were when, for instance, we spoke about them at your first BizNews conference (in March 2021).".Viljoen will be back at BNC#4 at end August, the only keynote speaker to present at all four of our events. This time around, apart from sharing current favourites he'll also be debating another leading money manager, 36One's co-founder Cy Jacobs. That alone will be worth the trip to the Drakensberg. If you haven't secured your place yet, here's the link..For his part, Kooyman has had even longer stay in the wilderness as his specialty, financial stocks, have been neglected for most of the past decade. But they're now back with a vengeance, topping the Corion Report's sectoral tables for one-year (+31.6%); year to date (17.3%); three-month (9.5%) and one month (4.3%) periods..Unlike his cautious counterpart, Kokkie believes for him the good times have barely started. He says the recent rebound for financials – stronger even than resources stocks – comes after a wipeout during the previous 12 months. Banking profits, he adds, have recovered far more than their share prices..Kooyman shared: "When I was in Europe recently, the fund managers there were still shunning financials, calling them perennial under-performers and pointing out, for instance, that the share price of HSBC (West's biggest bank) is still below where it traded in the year 2000.."What they are missing is that because of inflation, interest rates are likely to rise and stay higher for an extended period. Higher interest rates are good for bank profit margins. The sector is overdue a proper re-rating and from what I can see, that's only just started.".Among JSE-listings, Kooyman is particularly excited about ABSA shares. He has a high regard for newly installed CEO Arrie Rautenbach and a tight executive team whose achievements in turning around the business have been considerable, although for most of the the investing public, the achievement is still "under the radar"..At the current share price around R180, ABSA stock trades where it was in January 2015. In those seven years, however, annual headline earnings have risen 43% (R18.6bn v R13bn) and net loans to customers are up 72% (R1 092bn v R636bn)..Equally important when looking ahead, ABSA's share of its core South African banking market rose in 2021, up to 20.1% (19.5%) in terms of total assets; to 22.2% (21.3%) of total advances; and 20.8% (20.2%) of total deposits. Kooyman says this is an incredible achievement by a management team which delivered despite highly publicized board level distractions..Bottom line: Follow Viljoen and invest for the long term. And like Kooyman, be aware of opportunities that present themselves every now and then. Time to buy some ABSA shares?.More for you to read today.Amazon's First Stock Split Since 1999 Takes Effect. The 20-for-1 split was approved by Amazon's board earlier this year.Highflying Tiger Global Humbled by Unraveling of Giant Tech Bet. The New York firm was a heavy investor in technology stocks and startups when the market peaked. The downturn has vaporized years of its gains.U.K.'s Boris Johnson Survives No-Confidence Vote Over Lockdown Parties. British prime minister suffered an unexpectedly large revolt from Conservative lawmakers, but will remain leader of party and government.Elon Musk threatens to end deal with Twitter. Tesla CEO accuses Twitter of not complying with his request for data on spam and fake accounts on social-media platform..NB FOR YOUR WALL STREET JOURNAL ACCESS….As a Premium subscriber you are entitled to full membership of wsj.com (normal price $29 a month). Be sure to action your access through the Premium link on the BizNews website. Because of The Wall Street Journal's credential requirements, be sure to create a password which has at least 8 characters and includes at least one letter and one number – NB it MAY NOT contain any special characters (ie #, !, @ etc). To maintain access to WSJ.com, you MUST enter our partner's website via Biznews Premium at least once a month. A final PS, if you had previously signed up for WSJ you'll need to clear the cookies from your device. Our helpdesk can assist – support@biznews.com

Boardroom Talk: Happy Gupta Arrest Day – and stock insights from Piet and Kokkie

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