Good question. If offered a good [20/-?] price within 18 months then I would sell. Ceteris paribus e.g. Inflation remains within 5-8%, GoK pays 13% or less, GoK (Per Capita Debt) remains the same, Fuel price formula remains the same, no PEV, etc.

I am not married to KK but if the price remains anemic then I will hold on for the future growth and dividends.

I use earnings yield and risk-free GoK returns. Ceteris paribus (not easy so I discount for it)
13.5% for risk-free 12yr paper but modified duration of 10yrs.
That's 355% aka 100 becomes 355 in 10yrs after compounding.
KK can make 2/- per share which is 15% EY. There will be some hits now & then but I expect at least a modest growth in EPS over 10 yrs. I will also get dividends which can be reinvested into KK or other savings.

I expect KK to receive KES 1.1bn from KPRL. Of this, KK has written off 600mn which is KES 0.40/share. There's another award vs KPC [google Nation or BD] and the net award after all the back and forth is estimated at 3bn [I think there are still appeals going back and forth but eventually KK will win]. That's 2/-.

So approx 2.50 isn't accounted for in the NAV. That's nothing to do with earnings from existing business.

2/- x 10 years = 20 [plus modest EPS growth but less dividends] = 20
Add 2.50 [not adjusted for inflation]
Dividends over 10 yrs @50cents = 5/-

27.50 in 10yrs assuming no increase in value of fixed assets e.g. Land
If I am offered 20/- in 2018 (Sep 2018), I might be slightly ahead of the T-Bonds.
If not, then enjoy the ride.
Ceteris paribus

I expect more in 10 yrs (total return) but I prefer to be conservative. Yes, to many banks at current prices. Yes, to KenRe.
I used 15% EY for KK but less in future years to be conservative and lower growth prospects within EAC as it grows larger.
I don't invest in more than 10 stock with 5 as core. The "second" 5 includes TPSEA, C&G, FTGH. No DJ for now until I have a better read on Two Rivers. If you remove Two Rivers then I like the rest of the biz. Two Rivers seemed rather empty to me. Many stores haven't opened, huge maintenance costs, pricey stores, etc.
No to KenGen and KPLC for now. The rot in KPLC will come out. Apparently, suppliers include some senior chaps in GoK. On KenGen, perhaps later but not interested at the moment. Except KenRe, I stay away from GoK firms.

Price controls (floors & caps) can destroy any industry. Look at the banks. The share prices for most, even the venerable Equity [all except Stanchart it seems] is down coz future prospects are diminished. Populist attempts have been made on M-Pesa as well. Even the millers are affected. Then there's the insurance industry too. Even taxis re: Uber. We might as well officially become a socialist country.

KK - There's little KK can do about margins set by a govt bureaucracy pushing a political agenda. Some populists even think existing margins are too high despite warnings that stations may not open in areas where land is deemed too pricey! I believe KK will slowly gain market share by increasing volumes & spreading fixed costs over more volumes which benefits the bottomline. It's not ideal. I see value for KK in some stations it owns which should be shut down & KK can sell/develop the properties.

That said, Ohana was clear about favoring higher margin products with no price controls e.g. LPG & lubricants. Fuel pays the bills. Other products pay for the vacations. New stations are being leased in areas where roads are opening up but not in expensive areas where lease costs are prohibitive.

Like the banks, I expect consolidation e.g. GAPCO sold to Total, Hashi to Lake Oil, etc. Price controls diminish competition by creating barriers to entry.

From my mathematicos, I will only jump in below 10/- probably wont get to those levels.

I exited at 13.10. looking for better value elsewhere.

Is@Obiero's account hacked

@Obiero any exchange bar hot tips about KK? Please share with us.

Yes mate. What I am seeing is total confluence. Check the last two analysis. The first one was in another discussion.



Will include supply and demand analysis when I get time.
Remember. Anything can happen

Hello mlennyma, Long time... IMHO, If bulls are able to pull their acts together and follow through, the following are potential sell targets:
Note: trend carefully at or around
target 1= 16.85
target 2= 18.3
target 3= 22.3
target 4= 29.1(most ambitious)

Supply and Demand analysis here
Hope this is helpful