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BRITAK IPO: The Money Maker
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mwanahisa
#131 Posted : Wednesday, June 29, 2011 11:13:42 AM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
guru267 wrote:
So issued shares will be 2.15billion after the IPO not 1.07
... That changes alot..


Based on last year's results the Pre- IPO EPS on the basis of 1.5 B shares is Kshs 1.81, DPS is Kshs 0.13 while NAV is Kshs 7.05. At an issue price of Kshs 9, PE would be 4.97, Dividend yield 1.48% and PBV is 1.28.

Other than the dividend yield, these appear to be good numbers (and hence fairly cheap). The problem however is that 2010 was an extraordinary year for British American. If we go back for the last 5 years unfortunately the picture will not be so rosy.

All the same, depending on what spin the company and its PR and advertising agents put on it, I think it will sell.
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guru267
#132 Posted : Wednesday, June 29, 2011 11:28:46 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
mwanahisa wrote:
the deal wrote:
@Mwanahisa thanks for the correction....i will update my blog accordingly...uhmm there is nothing cheap then


So noted. BTW, you have done some very good work on this company. I am generally in agreement with your sentiments on the company given the variable nature of the company's profits over the year with its over reliance on investment income (and especially on Fair Value Gains on Financial Assets through Profit & Loss which is the worst of the lot in terms of its unreliability).


That figure is the downfall of many companies that fail to manage it. Its not even a cash flow.. You cant feel or use those gains for anything.


Investment income should include:
1. Rental income
2. Dividend income
3. Interest income
4. Share of profits in private equity and associates in which they have a share
5. Gains on asset disposals (should not be frequent)

For sustainable income, investment companies should try eliminate:
1. Net fair value gains thru profit & loss (look at britak)
2. Revaluations of assets
3. Frequent asset disposals(unless its their business)..

By observing the importance of each factor to the investment company you are looking at you will make the right decisions when choosing..
Mark 12:29
Deuteronomy 4:16
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  | | Edit by user: Wednesday, June 29, 2011 11:31 AM | Reason: Not specified
mwanahisa
#133 Posted : Wednesday, June 29, 2011 11:33:36 AM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
the deal wrote:
Their 11% stake in Equity Bank, Makes up 26% of their assets now this is subject to alot of market risk I.e 1H 2011 the Equity share is down by over 10%...do the math and you will see how much the balance sheet has taken a knock aulready


Actually, the Equity price has lost slightly less than 5% year to date while HF has lost about 10%. British American considers these to be strategic stakes and most likely will not have traded in them. However, if their Asset Management is as good as is being vaunted, I would expect that they will found some other trading positions to offset these losses.
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mwekez@ji
#134 Posted : Wednesday, June 29, 2011 11:44:53 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
selah wrote:
And now I cant access their site is anybody experiencing the same problem?


@selah, same here.

@mwanahisa, please send me the annual reports to email address 2mwekezaji@gmail.com
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mwanahisa
#135 Posted : Wednesday, June 29, 2011 11:52:25 AM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
@2mwekezaji. Sorry, I do not have the reports on the device that I am using ATM. I suggest that you download them from their site (when it is back online). If it does not come back by end of day, I will upload them on a file sharing site.
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Aguytrying
#136 Posted : Wednesday, June 29, 2011 11:52:27 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Whoa! This i why i love wazua. Learning everyday. When i grow up i want to be like, mwanahisa, guru, the deal.
The investor's chief problem - and even his worst enemy - is likely to be himself
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Borsenmakler
#137 Posted : Wednesday, June 29, 2011 11:55:45 AM
Rank: New-farer

Joined: 6/22/2010
Posts: 39
Location: Nairobi
Yeah, its 2.15 billion shares, and kes. 9 it aint cheap while looking at the big picture.
Spread love like violence.
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mwanahisa
#138 Posted : Wednesday, June 29, 2011 11:58:06 AM
Rank: Elder

Joined: 6/2/2008
Posts: 1,438
@guru267, I am in complete agreement with your observations regarding British American's quality of earnings. Obviously comparing BA with Jubilee which I know you love (and in which I also have considerable stakes), the choice between the two is a no brainer.

However, as @aguytrying has noted, this could very well be a compelling smash and grab job. And it could very well turn out to be a good investment in the medium term after the IPO speculators/profiteers shakeout (I intend to be one of them).

As you know, the market does not always follow pure fundamentals. See where CFCIH is trading with its very weak earnings numbers.
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the deal
#139 Posted : Wednesday, June 29, 2011 12:06:02 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Update we rate the company EXPENSIVE compared to its peers check here
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guru267
#140 Posted : Wednesday, June 29, 2011 12:11:40 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
mwanahisa wrote:
@guru267, I am in complete agreement with your observations regarding British American's quality of earnings. Obviously comparing BA with Jubilee which I know you love (and in which I also have considerable stakes), the choice between the two is a no brainer.

However, as @aguytrying has noted, this could very well be a compelling smash and grab job. And it could very well turn out to be a good investment in the medium term after the IPO speculators/profiteers shakeout (I intend to be one of them).

As you know, the market does not always follow pure fundamentals. See where CFCIH is trading with its very weak earnings numbers.



Im also looking to get in and out but with limited funds because their is substantial risk in this one..
Mark 12:29
Deuteronomy 4:16
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