Aguytrying wrote:guru267 wrote:mwanahisa wrote:@Gatheuzi, just curious how you get to a price of 150 based on fundamentals. Please do tell.
@mwanahisa this stock is worth more than that price on a forward basis...
If it continues with 100% profit growth until year end its P/E will shrink to below 10 and don't forget their many new branches that are bound to boost profits....
Q3 results will justify all the banks prices.... since KCB is moving at the same pace i see know need to chase diamond.... But if you're in neither choose one and buy quick...
And basing on the NMG and Jubilee Interim dividends i also expect bonus shares from them....
Im also eyeing this one keenly, Id say ppl should be in both, though for kcb, its a bit late.
@ Mwanahisa the historical PE of this stock is 7.67 and a current PE of 15. Based on the half year results like @ guru indicated the growth in profits was 100%.
For the purpose of the risk control let us assume the profits grow by only 50% then the EPS at end of 2010 will be 11.51 and at current price of 117, the PE is at 10.
A bank with that level of growth should be fairly valued at around a PE of 15 at minimum so the price is 15X10 = Ksh150.
If it decides to join Equity or HF at PEs of 25 then you can see 250.
Disclaimer: I own DTB so my opinion may be subjective.
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.