How we analyse a business - part 4

April 21, 2024

How we analyse a stock step 3/3

Please note that this is not financial advice. 

This is just a brief description of how we analyse stocks and it should be said that investors can dig a lot deeper than this.

To make this easier, we will break it down into 3 simple steps:

  1. Understanding the business 
  2. Financials 
  3. Researching leadership and management

In this article, we will start with step 3.

3/ Leadership and Management

A team of great people can make or break a business. Warren Buffet once purchased Wells Fargo shares simply because of the management team that was involved. Wells Fargo went on to outperform the market for 15 years. The bus will probably go somewhere great with great people on the bus.
People are a great asset.

Lets get into a short and oversimplified example of analysing leadership and management.

Pieter Engelbrecht (CEO)

Pieter Engelbrecht served as COO and Alternate Director of SHP for 11 years.
Since his appointment as CEO, he has led Shoprite to become SA's largest food retailer, low-price leader, and SA's largest private sector employer. He has a huge focus on driving down costs (which they do very well) and rapid expansion of the business.

He has played a vital role in the establishment of Shoprites position as the Number One retailer in Africa. Prior to being named CEO, Pieter Engelbrecht was appointed as Chief of Operations in 2005 and was personal assistant to the then CEO.

Anton De Bruyn (CFO)

Anton De Bruyn joined Shoprite Checkers in 2000 and was appointed as CFO in 2018. He served his articles at PwC and worked briefly at Harwill investments and Henderson investments.  He completed his studies at Stellenbosch University and Unisa.

Anton De Bruyn has more than 15 years of experience within the Shoprite Group and fits in his role as deputy General Manager of Group Finance.

Ram Harisunker (Executive Director)

Ram Harisunker has been working in the industry for a mind-warping 53 years.
53 years!

There is no doubt that he knows the industry like the back of his hand. He is responsible for operations in Eswatini and international sourcing.
He is currently the Divisional Manager at Shoprite of Kwazulu-Natal and Indian Ocean Islands operations. He has also served as General Manager of Mozambique, Indian Ocean Islands & India. He has been an Executive Director of Shoprite since November 2002.

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