Viljoen on PPC – Piet answers a worried community member’s query

BizNews community member Steven van den Bergh fears he may have fallen into a trap with his PPC shares. This after he listened to a podcast with Counterpoint’s Piet Viljoen. Stephen purchased his PPC shares at an average cost of 70c, and believes he should have sold in January this year when the CEO and other directors sold large amounts at around 550c. He’s still in positive territory but is concerned with the downward trend since January and asked if he should take the profit or continue to hold. Piet Viljoen had the following advice:

Hi Steve,

I worked through the numbers after their recent results, and it looks cheap. But they face two major headwinds: the cost of power (making cement is a very energy-intensive business) and a lack of construction activity. To make up your mind about owning the stock or not, you have to handicap those influences on the business.

The Counterpoint Value Fund doesn’t own PPC anymore. But that does not mean you should sell (or even buy) the share. I manage a portfolio of stocks, some of which do well, and others which will do poorly. On balance, all together, they do okay. But I almost never know which ones will do well in any specific period. I buy them when expectations embedded in the share price are depressed, and I sell them when expectations are heightened.

Read also:

• Piet Viljoen on Sasol’s windy sails; PPC’s insider selling
• What government infrastructure drive? PPC CEO Roland van Wijnen
• Value destruction at cement producer PPC: Figures that’ll make your eyes water – Ted Black