@SPThropic, I can see @StockMaster in the hse.

@2012 there is no way there can be a correction in march if this is when corporate results are being announced by the banks and half year results by the industrials..

fastening my seatbelt.................vrooooooooooooooooooom

Anytime an economy grows, the growth is first reflected in the stock market since it's the most sensitive sector. @2012, i doubt there will be such a thing. My take is that the stock market is reaction to the recent growth in the 3rd quarter of 2010.

ACTIVITY 2/2011:

DATE: 06/01/2011

PURCHASE OF KENOL KOBIL 30,000 SHARES @ KSH 10.00.
Cost of transaction = Ksh 300,000
Add 1.82% transaction cost = Ksh 5460
Total Cost of Activity: Ksh 305,460

Cash at Hand after Activity 2/2011: Ksh 259,446

RATIONALE OF ACTIVITY

As the market rallies, Kenol Kobil is among the few shares that seems to have been forgotten.

Strengths
1. A penny stock
2. High liquidity
3. Good dividend policy (last year it paid out 37.5% of profits as dividends).
4. Coming from a previous year poor results, its EPS for current trading year should be greater by about 40-50% ie EPS of 1.2 - 1.3
5. Its currently trading at a P/E of about 11. With a 40-50% growth in EPS and maintaining the same P/E (11), the share should be trading at the Ksh 14-15 range by May 2011.
6. The only other listed Oil stock at the NSE ie Total is trading at a P/E of 17-18.
7. Aggressive expansion such that Kenyan market contributes less than 40% of company revenue hence reduced risk from single market exposure (a major weakness for Total(K))

Threats
1. Price regulation - Petrol (15% of oil products consumed in Kenya), Diesel (40%) and kerosine (8%) had a Ksh 6 reduction for petrol, Ksh 2 rise for Diesel and a Ksh 7 rise for kerosine. Thus the effect on revenue is not significant. The price of LPG (13kg) has risen from Ksh 1800 to Ksh 2600 - I doubt the 44% price rise can all be attributed to pirates.

A 15% capital gain in the next two months is expected.

Happy hunting.