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Stock Analysis for Kenyans Companies
Obi 1 Kanobi
#21 Posted : Thursday, May 21, 2009 3:13:00 PM
Rank: Elder


Joined: 7/23/2008
Posts: 3,017
@Ceaser.

I generally consider many factors before buying a share,but thats coz I am mostly a long term buyer. I hardly ever look at the numbers or the analysis,but I do read the financial statements and for this I look at the; a)cash from operations b) gearing c) operating profits

1. The company; The company's standing will determine my decision to buy,example for banks I will go for KCB over NBK/Co-op any day.

2. The economy and markets; I also look at the economic conditions and the markets the company is operating in,this will generally tell me how the company will perform. E.g I will not be buying tourism shares in awhile,

3. Mob psychology; Some companies just seem to have alot of attention,example Equity,I also through my hat with the group and ride the wave.

4. Historical price; I look at the price range over a one year period and use them to decide whether the company is under/over valued. Also the range breeds familiarity i.e,the fact that a share price was once 100 makes it easier to get there for a second time

5. Common sense; An example is Safcom,was valued at 5/= a year ago,now its trading at 3/=,the company if anything has grown since then,why not buy the share at the obvious discount. Same applies to most shares in the NSE that are currently selling at discounts

6. Unit share price; Its generally easier for a share with a unit price of 3/= to creep to 6/= without anyone raising an eyebrow than a share of 300/= rising to 600/=


I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
caesar
#22 Posted : Thursday, May 21, 2009 6:08:00 PM
Rank: Member


Joined: 5/25/2007
Posts: 149
'When buying shares,ask yourself,would you buy the whole company? ' slykt interesting comment

Good insight Obi
VituVingiSana
#23 Posted : Thursday, May 28, 2009 7:18:00 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,098
Location: Nairobi
slykat is quoting Warren Buffet (I think)

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
caesar
#24 Posted : Wednesday, June 03, 2009 1:44:00 PM
Rank: Member


Joined: 5/25/2007
Posts: 149





STOCK


BETA


NATIONAL BANK
1.85


SASINI TEA & COFFE
1.78


NATION MEDIA GROUP
1.71


KP&L
1.61


SAMEER AFRICA LTD
1.52


BARCLAYS BANK KENYA
1.43


ICDCI
1.41


KCB
1.4


NIC
1.34


EAST AFRICAN CABLE
1.29


GEORGE WILLIAMSON
1.22


DIAMOND TRUST
1.19


KENYA AIRWAYS
1.16


STANDARD CHARTERED BANK KENYA
1.15


CMC HOLDINGS
1.14


STANDARD NEWSPAPER
1.11


JUBILEE HOLDINGS LTD
1.06


CROWN BERGER
1.05


NSE INDEX
1


MUMIAS SUGAR
0.97


EQUITY BANK
0.94


CFC BANK
0.93


CITY TRUST
0.93


BAMBURI CEMENT LTD
0.92


EXPRESS KENYA LTD
0.92


BAT KENYA
0.87


ATHI RIVER MINING
0.85


KAKUZI
0.82


HFCK
0.81


KENGEN
0.72


REA VIPINGO
0.7


ACCESSKENYA
0.68


SCAN GROUP
0.67


CAR & GENERAL
0.66


UNGA GROUP
0.64


KENYA OIL
0.58


TOTAL KENYA
0.54


TPS EASTERN AFRICA
0.51


EVEREADY
0.49


UNILEVER TEA KENYA
0.43


EAST AFRICAN PORTLAND CEMENT
0.43


OLYMPIA CAPITAL HOLDINGS
0.4


EAST AFRICAN BREWERIES
0.39


PAN AFRICA INSURANCE
0.2


EAAGADS
0.15


KAPCHORUA TEA
0.15


MARSHALLS E.AFRICA
0.03


KENYA RE-INSURANCE
-0.42


A BAUMANN & CO
-0.74








CBR. 8.0000. 21-May-2009





The betas I was able to gather from http://mystocks.co.ke some even have Negative beta just like gold. For risk free rate I was thinking of using the CBR 8% until I read the article in business daily that inflation at 1 month fell by 6% from 25% to 19% with the drop in food prices.

It is about time the NSE,CBK,Investment Banks and all those data vendors to start clunching the numbers.
Guys what would you use as market premium on the NSE???
Obi 1 Kanobi
#25 Posted : Wednesday, June 03, 2009 2:56:00 PM
Rank: Elder


Joined: 7/23/2008
Posts: 3,017
@Ceaser,how does this Beta help with investment choice.

I guess if you can't win with facts,you can always pen bile-laced,xenophobic rants to distract everyone.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
caesar
#26 Posted : Wednesday, June 03, 2009 4:49:00 PM
Rank: Member


Joined: 5/25/2007
Posts: 149
Obi 1

1. You have to determine the companies Weighted cost of capital (WACC) using capm the beta,Market risk premium and risk free rate,and capital structure

2. You also have to determine if the projects undertaken by the company you are investing in have a return that is greater than the company's WACC

If yes this company is creating wealth if not,if this company is also investing in new projects it is destroying shareholders wealth.

Then you can reconcile the your company valuation with the market presumed valuation to determine if it is Undervalued,correctly valued or overvalued.

Even if you use the discounted cashflow method of valuation you also need to have a

CF/r-g r will also have to be the Wacc

NSE does not provide any platforms for sophisticated analysis,even the wanna be investment bankers do not provide traditional value based metrics thus international investors left the market.

The international cannot understand the Kenyan market. They thought Safaricom would bring this sophistication,all what ended is some old guys shouting big words and processing transactions without doing much analysis.



Uhuru has an opportunity here. With good fundamental analytics the NSE
Hi-Lo
#27 Posted : Thursday, June 04, 2009 5:24:00 AM
Rank: Member


Joined: 10/5/2007
Posts: 91
@Ceasar...it's great to see one trying all tricks to get their portfolio out of the sewer...but I think the beta numbers you've presented (assuming ytd Jun/09) may be faulty. For one...there's no way Mumias could have beta&lt;1 if we're referring to a volatility index...that it swings a bit more softly than NSE...No,MSC really wild!!

To others interested...these financial/statistical functions are elegantly available in Excel...eg beta=Covar(Rs,Rm)/Var(Rm) where COVAR,VAR functions are in the spreadsheet...simple

Playing the stock market without insider info...is like buying a cow in the moonlight.
stocksguru
#28 Posted : Thursday, June 04, 2009 7:37:00 AM
Rank: Member


Joined: 4/19/2007
Posts: 68
@ceaser,are you building a podium to malign the mystocks guys? The figures you have posted are 1) very wrong,(NBK cannot be more volatile than EQTY which in turn cannot be less volatile than the market standard,neither can NMG be more volatile than ACCS) 2) They do not reflect what mystocks guys have published. Get the proper beta values here http://live.mystocks.co.ke/scorecard.php (look at the last column).

@hi-lo ua formulae is timam
Ruchwarsteve
#29 Posted : Thursday, June 04, 2009 10:17:00 AM
Rank: Member


Joined: 4/8/2009
Posts: 34
I am an individual investor,not an employee,not a supplier,not a creditor,and not a customer. All these characters are interested in different pages of the financial statement. Individual investors should stop wasting time doing what management does best and what suppliers do best. 90% of individual investor's attention should be on those usually hidden pages in Financial Statements namely - CONSOLIDATED STATEMENT OF CHANGES IN EQUITY. This pages will bear you out. Good luck!

RUCHWARSTEVE -super surfing
caesar
#30 Posted : Thursday, June 04, 2009 2:25:00 PM
Rank: Member


Joined: 5/25/2007
Posts: 149
Hi-Lo,please would you use those 'simple' models and come up with some empirical results for all of us in SK to use.

Stocksguru I am not against mystock guys it is that their beta is useless also.




stocksguru
#31 Posted : Thursday, June 04, 2009 2:58:00 PM
Rank: Member


Joined: 4/19/2007
Posts: 68
@ceasar,stop hating... evidently this is where you were headed from the start,challenge guys based on a competitors work,post false figures and quote the competitor,then rubbish the competitor as useless.

the figure you posted are incorrect and most of all dont tally with your quoted source.

Care to explain...
caesar
#32 Posted : Thursday, June 04, 2009 7:35:00 PM
Rank: Member


Joined: 5/25/2007
Posts: 149
Sincerely I am not against mystocks

My point is highlighting the need for reliable fundamental data. If our market finds an established source like bloomberg,McKinsey or if those guys in Mystocks,or Ally Khan Satchu,or the other data vendors set up a base for fundamental analysis.

And the Main companies ie Safaricom and Equity float ADR's. International investors will have refrence indicators. It will make our market alittle bit mature these people will come in draws and we can all get rich






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