Mark du Toit, portfolio manager at OysterCatcher Investments, on what the smart money is doing

Mark du Toit, portfolio manager: OysterCatcher Investments

Buy: PPH (Pepkor)

Pepkor is a great business with a good management team. The business will benefit as inflation cools and interest rate cuts are announced. Consumers will then have relatively more money to spend in South African retail stores. Longer term, the expansion into Brazil will be the next growth phase for the business. The share now trades on an undemanding p:e of 15, for a company that can grow earnings above 15% a year.

Sell Mondi (MNP)

Mondi recently paid a special dividend related to the sale of its Russian operations. There is no further prospect for above-expectation dividend returns to shareholders. The European economy remains weak and so do containerboard prices. At the moment the Mondi share is pricing in a recovery in paper and packaging prices, but we think the pricing rebound that the market is now factoring in will take longer to materialise.