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ARM Cement 9M15 EPS Plunge
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dunkang
#31 Posted : Monday, January 25, 2016 7:04:06 AM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
Receive with simplicity everything that happens to you.” ― Rashi

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Aguytrying
#32 Posted : Monday, January 25, 2016 11:43:10 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Whoa. The dilution happening to ARM is not small.

Current market cap at 35.00 is 17.5bn Kes

Incoming investment of preference shares is 12.5 bn Kes

After crunching some hypothetical numbers the eps will be diluted to become 55% of what it currently is. The last good/normal year it was 3.01 eps. 55% of 3.01 is 1.66 eps.

Current PE is 11.75, assuming this is maintained 11.75*1.66= 19.75.

So 1 ARM share should be at 19.75 when you factor in the dilution.

( some may argue. But they are preference shares? True, but the earn dividends and they WILL be converted, so other than not trading, they are dilutive to the equity, it would be wrong not to include them in the valuation)

If you use a pe of 10. 16.60 Kes per share.

Let's await the final numbers on the shares that will be issued, but it won't be far from this, depending on arm negotiating skills, I've pegged investors to buy price at 30.00 per share.
The investor's chief problem - and even his worst enemy - is likely to be himself
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obiero
#33 Posted : Tuesday, August 16, 2016 8:07:08 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,224
Location: nairobi
murchr wrote:
Aguytrying wrote:
murchr wrote:
Aguytrying wrote:
obiero wrote:
enyands wrote:
Spikes wrote:
I think as for speculative guyz 20 bob is a massive buyp.....we are just waiting for the whistle!



@spike Following

Is it only me, or does @spike remind u guys of @qw


Yeah, but espcially @realtreaty. It could even be him


@realtreaty cannot be QW..by the way the guy still has love for wazua, I saw him advising some people on FB to join wazua


Why can't he come back, we miss his humour. He used to be one of my friends here



Laughing out loudly Madam admin alimfukuza na mwiko moto...I guess he's still a member we'll know with time

CDC UK to pump in KES 14.1B into ARM
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Aguytrying
#34 Posted : Tuesday, August 16, 2016 1:13:22 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Aguytrying wrote:
Whoa. The dilution happening to ARM is not small.

Current market cap at 35.00 is 17.5bn Kes

Incoming investment of preference shares is 12.5 bn Kes

After crunching some hypothetical numbers the eps will be diluted to become 55% of what it currently is. The last good/normal year it was 3.01 eps. 55% of 3.01 is 1.66 eps.

Current PE is 11.75, assuming this is maintained 11.75*1.66= 19.75.

So 1 ARM share should be at 19.75 when you factor in the dilution.

( some may argue. But they are preference shares? True, but the earn dividends and they WILL be converted, so other than not trading, they are dilutive to the equity, it would be wrong not to include them in the valuation)

If you use a pe of 10. 16.60 Kes per share.

Let's await the final numbers on the shares that will be issued, but it won't be far from this, depending on arm negotiating skills, I've pegged investors to buy price at 30.00 per share.


Those with interest int ARM what is the impact on dilution by the new investment esp on EPS and PE??
The investor's chief problem - and even his worst enemy - is likely to be himself
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Ericsson
#35 Posted : Tuesday, August 16, 2016 1:24:14 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,808
Location: NAIROBI
It is not preference shares being created but ordinary to accomodate CDC.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#36 Posted : Tuesday, August 16, 2016 2:12:05 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Aguytrying wrote:
Aguytrying wrote:
Whoa. The dilution happening to ARM is not small.

Current market cap at 35.00 is 17.5bn Kes

Incoming investment of preference shares is 12.5 bn Kes

After crunching some hypothetical numbers the eps will be diluted to become 55% of what it currently is. The last good/normal year it was 3.01 eps. 55% of 3.01 is 1.66 eps.

Current PE is 11.75, assuming this is maintained 11.75*1.66= 19.75.

So 1 ARM share should be at 19.75 when you factor in the dilution.

( some may argue. But they are preference shares? True, but the earn dividends and they WILL be converted, so other than not trading, they are dilutive to the equity, it would be wrong not to include them in the valuation)

If you use a pe of 10. 16.60 Kes per share.

Let's await the final numbers on the shares that will be issued, but it won't be far from this, depending on arm negotiating skills, I've pegged investors to buy price at 30.00 per share.


Those with interest int ARM what is the impact on dilution by the new investment esp on EPS and PE??

@Aguy - I don't have shares in ARM but there might not be a dilution in the EPS since CDC is putting in new cash at a "not-so-cheap" price. Think Helios' investment in Equity which helped Equity super-charge growth. The current PER is meaningless if the EPS is negative.

I am not 100% sure but thanks to the CDC cash, the banks have gone easy on ARM which was struggling for Working Capital. Even the CP folks are now voluntarily renewing their CPs.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Aguytrying
#37 Posted : Tuesday, August 16, 2016 4:16:33 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
VituVingiSana wrote:
Aguytrying wrote:
Aguytrying wrote:
Whoa. The dilution happening to ARM is not small.

Current market cap at 35.00 is 17.5bn Kes

Incoming investment of preference shares is 12.5 bn Kes

After crunching some hypothetical numbers the eps will be diluted to become 55% of what it currently is. The last good/normal year it was 3.01 eps. 55% of 3.01 is 1.66 eps.

Current PE is 11.75, assuming this is maintained 11.75*1.66= 19.75.

So 1 ARM share should be at 19.75 when you factor in the dilution.

( some may argue. But they are preference shares? True, but the earn dividends and they WILL be converted, so other than not trading, they are dilutive to the equity, it would be wrong not to include them in the valuation)

If you use a pe of 10. 16.60 Kes per share.

Let's await the final numbers on the shares that will be issued, but it won't be far from this, depending on arm negotiating skills, I've pegged investors to buy price at 30.00 per share.


Those with interest int ARM what is the impact on dilution by the new investment esp on EPS and PE??

@Aguy - I don't have shares in ARM but there might not be a dilution in the EPS since CDC is putting in new cash at a "not-so-cheap" price. Think Helios' investment in Equity which helped Equity super-charge growth. The current PER is meaningless if the EPS is negative.

I am not 100% sure but thanks to the CDC cash, the banks have gone easy on ARM which was struggling for Working Capital. Even the CP folks are now voluntarily renewing their CPs.


I hear you. However as long as new shares are created the EPS must get diluted. Unless the dilution is small, but i understand its almost equal to the market cap of ARM so should be significant. I'll try crunch the numbers using the last good 'Normal' year.
The investor's chief problem - and even his worst enemy - is likely to be himself
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Fyatu
#38 Posted : Wednesday, August 17, 2016 12:03:51 PM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
ARM shareholders are facing a 40% dilution. The company is also creating another 21 million shares under Employee Share Ownership Programme (ESOP). All in all, this stock is a gem
Dumb money becomes dumb only when it listens to smart money
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