Rank: Chief Joined: 5/31/2011 Posts: 5,121
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stocksmaster wrote:mwekez@ji wrote:youcan'tstopusnow wrote:mwekez@ji wrote:erifloss wrote:trizher wrote:
This is unreal....why put the announcement 1 and a half moons away?........any ideas?
I think it might be coz they are preparing to offer shares under ESOP soon as they had earlier announced and don't want an early drop in price if or when they release a timetable for the same due to dilution. Most ESOP have a lock in period of at least 3 years. KK ESOP is not likely to be an excemption to that lock in. In that case, the current share price will not be affected directly by the ESOP as the ESOP share be available for trading after the lock period They'll be getting a share of the dividends The dividend cake will have to be shared by many company owners. EPS & PE ratios will be affected. Definitely there will be dilution. At least if they create a lock in period, the ESOP shares will not drive down the share price in the medium term. If they dont create a good lock in period, this stock is doomed The Dilutional Effect on the issue of 140M ESOP shares is: 140M/1472M x 100% = 9.5% Half year 2011 vs Half Year 2010 (Net Profit) will be > 50%. If my shareholding is to be diluted at 9.5% so that employees are motivated to give me a return on my investment of > 50%, thats makes investment sense!! Am gaining > 40% in EPS, so how can the share be doomed? For the year 2011,this company if it maintains the momentum will be posting an EPS of between Ksh 2 - Ksh 2.2 and with its generous dividend policy, the total dividends for 2011 should be approximately between Ksh 0.75 - Ksh 1.00. As i posted earlier, any price below Ksh 15 for this share is a steal. My exit target for my sizeable KK holding is a price of Ksh 20 in March 2013 (100% capital gain in 20 months). Happy hunting. @stocksmaster, the profit growth of over 50% is great. If KK is able to maintain such growth it will be a very good thing. However, your advice on the buying price of KK is too high. If I get a buyer at such a price, I will happily sell all my remaining portion of KK. This share is currently experiencing a struggle to move past 10.50. Also do not brush off the 9.5% dilution as insignificant, time will tell that it is significant
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