Hot Stocks: Nedbank Private Wealth’s Burgess picks Mondi

Nedbank Private Wealth's Kyle Burgess recently shared his insights on why he believes Mondi is the hot stock to watch this week. Mondi, a global paper packaging company, is currently trading at a price-to-earnings ratio below 10, well below its long-term average. Additionally, Mondi offers a strong dividend yield of approximately 4.5%, making it an attractive investment opportunity. The company's diversified business operations across the globe provide it with exposure to high currency earnings, further enhancing its appeal to investors. Burgess highlighted these factors as key reasons to consider adding Mondi to investment portfolios. CNBC Africa delved into the details of Burgess's analysis and the reasons behind his bullish outlook on Mondi. Burgess emphasized Mondi's strategic focus on packaging, particularly corrugated boxing, which has seen increased demand in the era of online shopping. By pivoting towards packaging over glossy paper products, Mondi has positioned itself as a leader in an industry experiencing growing demand. Moreover, Burgess noted that Mondi's global diversification is a significant advantage, especially as South African investors seek to hedge against domestic uncertainties. Reflecting on past ventures by South African companies to expand internationally, Burgess pointed out the importance of carefully managing such expansions to avoid pitfalls. He mentioned previous attempts by companies like Woolworths to diversify globally, which did not yield the desired results. With Mondi, however, Burgess sees a promising opportunity for investors, leveraging the company's global presence and focus on packaging solutions. As Burgess concluded, the paper sector emerges as a potential winner, with Mondi standing out as a strong contender in the market.