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Safaricom: time to sell as Michael Joseph to retire at the end of 2010
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sparkly
#41 Posted : Saturday, March 20, 2010 3:38:18 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
sheep wrote:
yep! by all metrics Safcom is overvalued.

@sheep i am confident of saf in the long run as long as it retains its dominant position and market leader status, regardless of the CEO. If the competition starts to eat into saf's mkt share significantly then i will be worried.
Life is short. Live passionately.
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the deal
#42 Posted : Saturday, March 20, 2010 4:14:57 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
safcom is a growth stock hence the high p.e...muzungus knows this thats why they buy it like crazy...theyre not looking at june,theyre looking at 3 years...mpesa has over 7 mil subscribers...its the only 3G network in kenya...dont forget the stock buy back...vodacom did that recently...
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sheep
#43 Posted : Saturday, March 20, 2010 4:22:19 PM
Rank: Veteran

Joined: 7/24/2008
Posts: 781
Competition is already gobbling Safcom market share,especially YU.The economics of safcom are bad,voice revenues are on the decline and they are safcoms bread and butter.The sideshows Mpesa and data cannot sufficiently boost the bottom line to justify a p/e of 20+.Some foreigners somewhere will be left scratching their heads.
The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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VituVingiSana
#44 Posted : Saturday, March 20, 2010 4:34:59 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@proverB: I understand where you are coming from lakini the answer I got from safcom was they felt GoK over-priced the shares 2 years ago but feel the price is undervalued now i.e. Safaricom needed 2 years to justify the current price.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#45 Posted : Saturday, March 20, 2010 4:36:54 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@sheep - Wacha madharao... ;-) Kwani safcom ate ur mbuzi?

safcom @ PER of 20???? Please give me the math...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sheep
#46 Posted : Saturday, March 20, 2010 4:50:44 PM
Rank: Veteran

Joined: 7/24/2008
Posts: 781
@VVS
P/E not PER...
The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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VituVingiSana
#47 Posted : Saturday, March 20, 2010 5:14:28 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@sheep What is P/E?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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ProverB
#48 Posted : Saturday, March 20, 2010 9:00:17 PM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
@sheep..we did some data collection in eastlands in November-Dec last year..for an advertisor magazine... for every 1 subscriber of Yu..we found 35 guys holding safaricom..including the yu guy!!.. safaricom isn't losing market share soon..

wherever there a cellphon network coverage..safcom is there..the only challenge they have is on data..the "hot spot" idea sucks!!..u use a safcom modem in tao and westlands..move out of cbd..u r better off with Yu or orange..

my argument is that they need to find better way of operating.. Revenues of 70.4 Billion 2008..translatin to 1.76 bob a SHARE!!!!..and profit before tax per share of 38CENTS...margin of 21.7.... out of every shilling collected in revenue..safcom had 20CENTs as profit before tax.. decline from 2007..likely decline further 2009.. why pay 5 Bob for it? unless for totally speculative reasons?

Fundamentally..will profitabilty growth rate beat cost rate of Debt they now have??..they can't afford negative growth rate..

minimum rate of growth should, in the very list be equal to growth in cost of overal debt finance.. i.e... cost of both the 463.4million mid term note maturing in 2014.. (interest is prevailing T.Bill rate+1.85)...
plus the 7Billion bond maturing in 2014 too (fixed interest rate of 12.25%)
..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
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mwanafunzi
#49 Posted : Sunday, March 21, 2010 7:24:30 AM
Rank: Member

Joined: 12/3/2008
Posts: 113
Well said,two years and no gains just airtime dividends am out tommorow before we hit below 5,with the huge supply i saw on friday downward pressure is inevitable.
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sparkly
#50 Posted : Sunday, March 21, 2010 6:04:29 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
mwanafunzi wrote:
Well said,two years and no gains just airtime dividends am out tommorow before we hit below 5,with the huge supply i saw on friday downward pressure is inevitable.

how much did you buy at?
Life is short. Live passionately.
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