Counterpoint Asset Management executive director, Piet Viljoen, has warned that top-performing stocks are not always great companies to hold for a long time.
Viljoen is one of South Africa’s most respected fund managers with over 25 years of experience in the investment industry.
He served as an economic analyst at the South African Reserve Bank and a portfolio manager at Allan Gray and Investec.
Viljoen left Investec to set up value manager RECM (Regarding Capital Management) in 2003, which merged with Counterpoint Asset Management in 2020.
He is currently the portfolio manager of the Counterpoint SCI Value Fund, which showed 26% growth over the last three years.
In a recent warning to investors about picking good companies, Viljoen posted a screenshot of the Sunday Times’ top 10 performing companies in 2015.
The top performing companies in 2015 included Fortress, Trustco, EOH, Taste Holdings, and Coronation.
“Most of the shares are down over 90%, and only a few are even sustainable businesses anymore,” Viljoen said.
He added that only one of the listed companies has a share price that is higher today than in 2015.
Viljoen added that many fund managers were criticised for not holding any of the top 10 stocks at the time, but they were vindicated looking at the current situation.
Brenthurst Wealth Management director Magnus Heystek also weighed in on the issue, saying its puts the “buy and hold through the cycle” theory to bed.
“Everything changes all the time at rapid speed. The current market is not the place for part-time amateurs,” he added.
Top performing stocks in 2015 and where they are now
The table below shows the share price of the top 10 performing companies in 2015 and where they are trading now.
|Top 10 Performing Shares in 2015|
|Company||2015 Share Price||Current Share Price||Change|
|Fortress REIT Ltd B||3200||430||-87%|
|Capital and Counties||9120||2602||-71%|