@guru267, ProverB has given you a pretty good method. I would suggest you think of it in the same way you would think before buying a house. It's both an art and a science without exact answers. And think about it as if you were buying the whole company.
PE is important to inform you whether the market has over-priced or under-priced the thing you are buying. It's very similar to how when you go to a market and find massive discounts on offer, you buy as much as you can. If the market is over-priced u don't buy.
Assets and Liabilities are an important check but as you know some companies make more money with less assets and some with huge assets make less returns on assets. So preferably a great company with sufficient protection and ground in the market, whose price is supported by its net assets and brand, with steadily rising profits and with sound management etc.

Low ROE...

Here we go again praising HF with only 4000 active mortgages. Purely speculative i have happy memories of this stock in 2006 moving 16/- to 65. Enjoy your ride with all talk about a hostile takeover. It never happened in 2006 and i hardly think it will happen now.

Guru, i don't see room for collaboration between the HF and Eqt. If you look at HF results I don't think equity did much to help HF mobilise deposits from its members. HF will also need long-term deposits to help it lower its mortgage rates or an outright infusion of capital to enable it lend to big projects. HF is only good value due to its institutional memory in dealing with kenya's mortgage market. Equity simply has to take over HF and convert it into its mortgage department, that way it can leverage on equity's balance sheet and customer base. I would say a price of 26/- is good for a takeover. Remember Transcentury also wanted to take over HF until someone leaked the info and the price doubled to 32, its dejavu all over again

Co-op bank was the first to open a strong mortgage dept. (as opposed to subsidiary) to ensure the lending capability is pegged to the banks strength. KCB noted the strategy and hurriedly absorbed their S&L.

Equity's strategy is even better because they will not only have a mortgage dept. but with many years of experience plus EB capital base. The shareholders of HF should realise that they are better off with 30% of a bigger company than owning 100% of a small non performing unit.