ACTIVITY 2/2011:

DATE: 06/01/2011

PURCHASE OF KENOL KOBIL 30,000 SHARES @ KSH 10.00.
Cost of transaction = Ksh 300,000
Add 1.82% transaction cost = Ksh 5460
Total Cost of Activity: Ksh 305,460

Cash at Hand after Activity 2/2011: Ksh 259,446

RATIONALE OF ACTIVITY

As the market rallies, Kenol Kobil is among the few shares that seems to have been forgotten.

Strengths
1. A penny stock
2. High liquidity
3. Good dividend policy (last year it paid out 37.5% of profits as dividends).
4. Coming from a previous year poor results, its EPS for current trading year should be greater by about 40-50% ie EPS of 1.2 - 1.3
5. Its currently trading at a P/E of about 11. With a 40-50% growth in EPS and maintaining the same P/E (11), the share should be trading at the Ksh 14-15 range by May 2011.
6. The only other listed Oil stock at the NSE ie Total is trading at a P/E of 17-18.
7. Aggressive expansion such that Kenyan market contributes less than 40% of company revenue hence reduced risk from single market exposure (a major weakness for Total(K))

Threats
1. Price regulation - Petrol (15% of oil products consumed in Kenya), Diesel (40%) and kerosine (8%) had a Ksh 6 reduction for petrol, Ksh 2 rise for Diesel and a Ksh 7 rise for kerosine. Thus the effect on revenue is not significant. The price of LPG (13kg) has risen from Ksh 1800 to Ksh 2600 - I doubt the 44% price rise can all be attributed to pirates.

A 15% capital gain in the next two months is expected.

Happy hunting.

ACTIVITY 2/2011:

DATE: 06/01/2011

PURCHASE OF KENOL KOBIL 30,000 SHARES @ KSH 10.00.
Cost of transaction = Ksh 300,000
Add 1.82% transaction cost = Ksh 5460
Total Cost of Activity: Ksh 305,460

Cash at Hand after Activity 2/2011: Ksh 259,446

RATIONALE OF ACTIVITY

As the market rallies, Kenol Kobil is among the few shares that seems to have been forgotten.

Strengths
1. A penny stock
2. High liquidity
3. Good dividend policy (last year it paid out 37.5% of profits as dividends).
4. Coming from a previous year poor results, its EPS for current trading year should be greater by about 40-50% ie EPS of 1.2 - 1.3
5. Its currently trading at a P/E of about 11. With a 40-50% growth in EPS and maintaining the same P/E (11), the share should be trading at the Ksh 14-15 range by May 2011.
6. The only other listed Oil stock at the NSE ie Total is trading at a P/E of 17-18.
7. Aggressive expansion such that Kenyan market contributes less than 40% of company revenue hence reduced risk from single market exposure (a major weakness for Total(K))

Threats
1. Price regulation - Petrol (15% of oil products consumed in Kenya), Diesel (40%) and kerosine (8%) had a Ksh 6 reduction for petrol, Ksh 2 rise for Diesel and a Ksh 7 rise for kerosine. Thus the effect on revenue is not significant. The price of LPG (13kg) has risen from Ksh 1800 to Ksh 2600 - I doubt the 44% price rise can all be attributed to pirates.

A 15% capital gain in the next two months is expected.

Happy hunting.

KCB is a stock with value.At a p/e of 15 it should be headed towards 32 by March. And with its business strategy, especially S&L, profits will be high.The profit growth will be comparable to Equity which is at a P/E of 25.44. Equity is likely to reach a max and profits will be taken before it rallies again

do you know something that we dont?