Pick N Pay Stores (JSE: PIK)

19.35 now, eish. Red again today.

19.35, bit of a wobble today.

19.35 now, down a bit today but holding.

@bombay_coach ja, and when the stores are busy it means the whole supply chain is moving, so PIK benefits across the board.

@jozi_janet but if people are broke they just buy less stuff, yeah? How does PIK make more money then?

Honestly the thing about Pick n Pay is everyone shops there, so when they do well it actually means people are spending money on groceries even when times are tough. That's why I reckon it's worth watching around the 20 level, lol.

@uncle_sakhile exactly, that's the whole thing right there.

Think of Pick n Pay like my spaza shop, ja. When the year ends and we've sold stuff for more than we spent on stock and wages, what's left over is profit, and the owners get paid a piece of that. That's a dividend, when the company hands cash to the people who own shares.

With an ETF you're buying a little piece of maybe forty different companies at once, so if Pick n Pay has a bad month you're still okay because you also own Shoprite and Naspers and others. With a single share like PIK, it's all your eggs in one basket, which means bigger wins or bigger losses depending on how the company does.

What's the difference between picking individual shares like PIK versus just buying an ETF?

@firsttime_frans so if they're losing customers to Shoprite, where's the profit coming from to pay that dividend?

Does PIK pay a dividend, or just the share price that goes up and down?

Pick n Pay sells you groceries, ja, and what's left over after they pay the staff and the suppliers and the rent, that goes to whoever owns shares in the company. Same thing at my spaza, except when I made profit I kept it all, but when you own a piece of Pick n Pay you get a slice of that leftover.

@bombay_coach ja, Shoprite's got the price advantage right now and that matters when money's tight.

PIK sitting on 19.78, just under that 20 level. Thing is, Pick n Pay's been losing ground to Shoprite on the cheap end of the market, and that's where people are shopping these days with load-shedding and everything else eating into budgets. Hard to get excited when your main competitor is eating your lunch.

R20.01! Come on!

20.01, through the line!

@firsttime_frans ja, we're knocking on the door. If the shops keep moving stock and holding margins, price follows. Simple.

@easystreet_jse ja, through 20 feels possible today

Hello R19.79, let's go!