Why this analyst is picking these JSE stocks to weather the COVID-19 storm

The COVID-19 pandemic has wreaked havoc on the global economy, causing uncertainty and volatility in financial markets. Amidst this crisis, investors are looking for safe havens and opportunities to weather the storm. Stephen Meintjes, Head of Research at Momentum Securities, has identified top stock picks that he believes will withstand the challenges posed by the pandemic and emerge stronger on the other side. Meintjes' top picks include Naspers and Prosus, exception stocks such as Afrimat and Raubex, and the Telco sector giants Vodacom and MTN. These selections are based on the increased demand for online services and data consumption during the lockdown period. Let's delve deeper into Meintjes' insights on these stocks and the rationale behind his recommendations. Starting with Naspers and Prosus, Meintjes highlights their resilience and growth potential amidst the COVID-19 crisis. Both companies have a diverse portfolio of investments, with a strong focus on e-commerce, payments, fintech, and food delivery services. While the media sector remains a small part of their business, their exposure to high-growth sectors such as technology and online services has been a key driver of their performance. Meintjes emphasizes Naspers and Prosus' strategic positioning in the market and their ability to capitalize on the shift towards digital platforms. Moving on to exception stocks like Afrimat and Raubex, Meintjes points out the potential benefits of infrastructure spending initiatives by the government. Despite the challenges facing the construction sector in South Africa, these companies are well-positioned to capitalize on opportunities in infrastructure development. Afrimat, with its strong balance sheet and acquisition strategy, is poised for growth in the coming months. Similarly, Raubex is expected to benefit from government projects and ongoing demand for construction services. In the telecom sector, Meintjes identifies Vodacom and MTN as key players that stand to gain from the increased demand for online connectivity and data services. With more people relying on digital communication tools and mobile data during the lockdown, telecom companies have experienced a surge in usage and are expected to maintain strong performance in the future. Meintjes highlights the importance of investing in sectors that are essential during times of crisis, such as telecommunications, to ensure long-term stability and growth. When discussing resource stocks like Harmony and Anglo Gold, Meintjes acknowledges the challenges faced by these companies due to the shutdown of mining operations during the pandemic. While South African production has been significantly impacted, Anglo Gold is better positioned to weather the storm compared to Harmony. The rise in the gold price has had a positive impact on companies like DRD and Pan African Resources, which focus on surface operations and have seen an increase in their profitability. Meintjes also mentions the progress made by platinum miners in ramping up production and remaining optimistic about the future outlook. Overall, Meintjes' stock picks offer a strategic blend of stability and growth potential in a volatile market environment. By diversifying across different sectors and focusing on companies with strong fundamentals, investors can navigate the challenges posed by the COVID-19 crisis and position themselves for long-term success. As the economic landscape continues to evolve, staying informed and adapting to changing market dynamics will be essential for investors looking to make smart investment decisions.