Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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watesh wrote:deadpoet wrote:watesh wrote:Kibe21 wrote:Pronounced dead in 2012 while trading @12/=.
8 years later and trading at covid discount of 21.50/= I'd say it's the right time to buy. What say you @Ericsson and the rest of wazua community? I am piling up this stock. In my opinion it's cheap on a valuation basis. First with the new dividend policy, we essentially have a guaranteed dividend every year that either goes up or stays the same. Their real estate investments are finally coming into the revenue section of the income statement since their first hand overs of the Vipingo Dev were to be in August and others December. They already sold land worth Ksh2.6 billion and it's still hasn't been recognized in the income statement till all the legal steps are done. Two new real estate projects have been announced in ideal locations. They have a sizeable cash pile ready to be deployed, talks are ongoing but I dont see anything being announced any time soon, maybe next year. Two Rivers has added a number of tenants this year and more to come. Ace Holding is close to breaking even. Debt has been fully paid down. Stock is cum dividend and it is trading lower than what it was trading in 2013. Headwinds: Longhorn (their biggest dividend payer currently) will be in challenges for the next 2 years minimum, Sidian bank is back to losses. Isuzu for sure has recorded decreased sales. Nas Servair hasnt been operational since airport was closed. Aren't all the above significant chunks of their portfolio? How do you know ACE is breaking even, and what's the likelihood they'll strike a geothermal well? That said, there is a proposed stock buyback plan, which has worked wonders for companies in the US. Based on their valuations, ACE is 2% of their assets (they were at 171 students as at March and break even is 210. CEO said in his most recent interview that they have not experienced any churn during the pandemic), Longhorn is 1.8%, Isuzu is 5.1%, Sidian is 5.4% (Had been in losses since interest rate cap, was finally profitable last year but now back into losses) so in total they are not that significant and it’s only Longhorn & Isuzu who have paid dividends to Centum. The geothermal is 3% of their portfolio and it's a 50 - 50 chance to get a well so don’t bank on it. They decided not to sink in more cash, the other investors will provide the funding. The most important asset for the company is its real estate portfolio which takes time to actually bring in money in the bank. Centum has ALOT of assets but the vast majority are not cash generating hence why there is a lag in the share price. They need time to mature first. I don't think the share buyback will not be happening in this financial year, the next one maybe. This is because of the low amount of cash they currently generate and a large number of opportunities available to them. However, Kirubi will mop up shares in the mean time as per the announcement he made. Two Rivers Mall, Centum stake is 28.6%. Old Mutual properties own 50% AVIC 19.1% ICDC 2.3% Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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