stocksmaster wrote:mwanahisa wrote:the deal wrote:they will be forced to issue a profit warning in their first year of listing...
@the deal, I have had a look again and I am forced to
concede that a profit warning in 2011 is a real possibility. Too much of their income in 2010 was tied to the fortunes of the stock market. It would have been great if the offer came in with H1 earnings update but I do not expect their IM will have incorporated it.
I have also tried to strip off the market premium from the NAVs for Equity Bank and HF. This
shaves off an incredible amount from the NAV, although arguably the same would happen to the likes of Centum.
With the foregoing, I would also advise folks to be extremely
cautious on this IPO and only buy what they can afford to speculate on. After the IPO is over we will be able to then reevaluate when H1 2011 figures will also come in. As the deal has indicated profits are
almost certain to be lower in 2011. So indeed @the deal, I agree it is a case of
"caveat emptor." That will of course not prevent me from speculating.
I agree with @ Deal (nice piece in your blog on this IPO).
The IPO price of Ksh 9 is rather high factoring in that the company will be hard pressed to replicate last years results in 2011. The BRITAK shareholders have timed the IPO to perfection (on their part) when the cow is at its fattest knowing an earnings famine is on the horizon.
I think i will stay out from this one but i have a feeling an opportunity to buy it at below IPO price will present itself before the year is over.
Happy hunting.
I hope @ Mwanahisa you never speculated on this one.
All forces are against this BRITAK share: A long bear run, expected fall in BRITAK profitability for 2011, very low P/E valuation of related Insuarance companies, heavy retail subscription during IPO without Institutional interest etc
Demand for this share will only appear as the share tends towards below the Ksh 4 mark.
Happy hunting.
x handle: @stocksmaster79