BUYER BEWARE:All financial data on KQ that is in print in newspapers and stocks websites have factored only 461,615,483 KQ Shares thus historical Eps of Kshs 7.65, Trailing p/e of 1.83 and Div of Kshs 1.50
You need to factor in new shares to have proper defined history..
Thus, on
1,94Billion Shares.. Historical
Eps is Kshs1.82,Div of Kshs 0.35 and at a share price of 14.00..this translates to a
trailing p/e of 7.69 and not 1.83 as reported in press and on Wazua's stock profiler..
http://www.wazua.co.ke/i...stor/stockssummary.aspx
Going forward, profit warning projected fall of 25% on earnings thus EPS expected for 2011-12 is Kshs1.36 and thus at price of 14.00, p/e shoots up to
10.29It is always advisable to buy a stock whose year-on-year earnings growth is about twice the p/e ...the only justification of buying KQ is that it grows it's earnings for next year by AT LEAST
20.6%... which is unlikely.
The projected earnings growth they expect is about 75%.. Hahahahahahahahahah! ..nice one..especially considering the fact that the reasons for profit warnings are not controllable by KQ and there's no probability of mitigating them should they persist in the new year..add on alshabaab, elections and all other crap kenya is known for..
the only price i'd consider is therefore..based on expected full year earnings of 2011-12, plus a dividend of at least Kshs0.35..is at most..9.50.
I doubt the dividend will happen though.
Growth in passenger & cargo numbers does not mean much unless accompanied by increasing profit margins per passenger and per unit of cargo..
diminishing operating margins imply KQ is spending more to increase passenger and cargo numbers than it is making for shareholders' troubles..
PS:About 22.86% of KQ is Owned by individuals..the rest is owned by KLM, Gvt and Institutional investors.. This implies over 400 Million shares will be held by individual shareholders...hence over supply for short term trading...even at prices of sub 10.bob..
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version