Ericsson wrote:VituVingiSana wrote:The shares listed are ESOP shares and they can't be sold without following the ESOP rules. The dilution was captured in the FY 2017 Annual Report.
I like KK but I am completely out of cash
Warren Buffett: "Socks or stocks, we like them when they are on sale" so I am going to recycle my KK dividend into more KK shares.
Given what Ohana & his team have done in the past 5 years, I am OK with KK for the next 5 years if they can manage KK in a similar manner.
The catch is that GoK is poorly managed and the pain goes all the way down.
That said FY 2018 and FY 2019 are looking to be awful for the Kenyan economy and NSE. Look at GoK:
- 57% of revenues used to service debt
- Revenue targets may be missed
- 50% debt is FX
- SGR/ICD is still a mess
- SGR is not cashflow positive
- More debt as SGR heads west to UG
- Massive power projects (excess supply) which GoK has to subsidize
- Higher taxes
I am only buying firms with positive cashflow, low debt and good management but that's not a guarantee of success. Perhaps one should buy FX (USD, etc).
Contradicted yourself by buying ARM holding onto Centum whose debt ain't low
ARM was uncharacteristic for me and I gave my reasons for buying a (few) ARM. It's a pity I did not have the info as to what the banks were thinking at the time. In my books, they are worth zero.
Value Investing (buying at a discount to NAV) isn't guaranteed to produce a winner.
Centum: Tier 2 holding. The LTV is less than 50% + I am buying at 50% of NAV. FY18 and FY19 will be very slow/awful for their real estate business. I will hold on. Value Investing (buying at a discount to NAV) isn't guaranteed to produce a winner but I have done well using that approach.
On the other hand, given how KE is being (poorly) managed, perhaps it's time to buy FX.
The core portfolio (80%) remains the same:
I&M - Not easy for banks in FY18/19 Risk: Loan defaults and fraud
KenRe - Plods along but lots of cash. Risk: Politics
KK - Ohana has done well. Debt = Inventory. Risk: Squeezed margins
Unga - Profitable but I do NOT trust the Ndegwas. I want to exit but at a better price. Risk: Shady tactics
Tier 2
Centum - Bought more at sub-30 given the 50%+ discount to stated NAV.
Risk: Write-down of asset values ((Akiira, Amu, Sidian, Two Rivers)
Equity - I remain a JM fan but I (luckily) significantly reduced my position. Risk: Defaults and fraud
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett