Blog Archive

Wednesday, January 10, 2007

2007... Another Year... More Stuff...

As mentioned earlier, I have not been blogging due to time, internet & technology constraints!

I am trying to expand to "Africa" but I am constrained primarily to Kenya. In this regard, I try to post on Investing In Africa.

Investing in Africa has newsletter that provides an analysis on listed African firms from all parts of Sub-Saharan Africa. Even though it is a paid service, it is an excellent resource for those who want to look outside Kenya for investments.

NSE Index- It has risen over the 6000 mark but unless I have the guts on its composition & how it is calculated, I would not place much faith on the Index...

NSE website - Same old pathtic site. All talk, no action!

KPLC - It has shot out of the gate in 2007 in heavy anticipation of a bonus.
CMC - Another bloomer while investors wait for a bonus.

The PE & PEG are getting out of whack (IMHO) but there are a few stocks that seem price laggards even with decent performance.

BOC - Its rather idiotic to have BOC on ice/suspended from trading for over 6 months! It has performed rather well in spite of the drought in early 2005 & the price for BOC is expected to rise when trading resumes.

Carbacid - Its rather idiotic to have Carbacid on ice/suspended from trading for over 6 months! It has performed rather well but until the CMA &/or the tribunal decides on its fate regarding its acquisition by BOC, the shareholders are stuck if they want to sell. The good news is that since it is well managed the firm's shareholders do benefit from larger profits & dividends while trading is suspended.


Odegle said...

any thinking on MSC , sameer, express

glo said...

Im curious too about MSC. Whats ur take CT. By the way happy new year.

Anonymous said...

happy new year CT. there is someone posting on stockskenya calling himself/herself tusker baridi. could it be you. if not please visit the forum and put the record straight. whats your take on scangroup?

coldtusker said...

Odegle - I do not follow Sameer or Express with much interest but Express is in the shipping business which has benefitted from Kenya's economic growth.

I am not discussing share price but company "expectations".

They bought new trucks & new roads will cut down their operational costs.

Well managed with great potential for growth in air freight.

Glo - Thanx!

Anon - That is not me. Will definitely try and sort it out. I will have to "register" the name!

MSC - I will not comment on share price but there is a sugar "deficit" in the world as long as oil is at $55 or higher since Brazil converts sugar to ethanol.

India & China are becoming larger consumers as their per capita incomes increase.

Europe will cut subsidies to its farmers thus reducing supply while USA is under pressure to do the same.

Expect competition from other sources e.g. High Furctose Corn Syrup but the 3-5 year outlook is good.

Kenya govt will protect the industry since its politically sensitive. MSC is the most efficient thus they will do well.

Furthermore, MSC will start ethanol & power production in 2008.

Anonymous said...

Your beloved CMC dropped like a stone. any reason why?

coldtusker said...

Anon - My policy is not to answer to Anons... So no more "anons"

CMC is not my beloved! That would be KQ (so far - LOL)... Rather than share price I look at (intrinsic) VALUE...

On a serious note, 'love' a company NOT its shares! That is a mistake.

coldtusker said...

CMC - The rise in the share price was very baffling. I could not understand it. Emotions triumphed.

I am not a chartist but there was stability (multiple trades within a range)... at around 60/-, 120/-, 155/-.

Then it went nuts within a short span! Therefore, I see the lower price levels as a return to sanity!

Look at EACables, Barclays or ICDCI to understand the effect of speculation that drives prices to unsustainable levels. All 3 have fallen or will fall from their highs following the pre-split, split announcement or post split highs.

I try and divorce share prices from company performance.

2005-6 saw a commendable 20% increase in profits. I expect an even better 2006-7 with strong KShs, elections & better economic growth. I will not comment on the share price.

Underlying earnings will always win out in the end. The earnings (8.something) did not justify the price (290/-).

Kudrinketh said...

Thanx for responding to the annon.I find your observations very insightfull coz at least you dont get all sucked into the share prices.

Talking about KQ, that 75% oil price hedging at $70 a barrel is really looking BAD with oil prices headed for $45 a barrel.

I think they should have anticipated it since weather forecast for the US was for a warm winter.That was one really costly move by Naikuni.

And dont give me that argument that nobody can predict the weather,your hero Buffett lives and dies by his weather predictions of hurricanes,he is often right except in 2005 when he got it wrong and lost over a BILLION(yes Billion) dollars.

Talking about $45 dollars a barrel oil,local beneficiaries will be Total Kenya and Kenol.I've been loading on their shares coz with these low oil prices they have to report increased profit, and their shares have been trading at very attractive prices(P/E wise, not the silly split-induced low prices that stockskenya forum members go crazy about)

coldtusker said...

Kudri - My man Buffett does not live by weather predictions...

Read the letters... He figures there are good & bad years BUT the OVERALL premiums should equal/exceed the payouts i.e. Free Float.

Moreover, BH raises its rates after hurricanes since many insurers withdraw from the market. Adverse Selection...

coldtusker said...

KQ - I don't think KQ mentioned the hedge's strike price. Are you sure it $70?

Chances are KQ hedged at the higher prices since the fear, then, was higher not lower prices.
I would love it if KQ surprises us!

That said if KQ bought Call options (rather selling Puts or a swap hedge) then its a sunk cost thus paid for & life goes on!

KQ will burn off their positions by Mar 31 2007, thus no carryover into 2007-8. Plus they have the 25% unhedged benefit.

Overall, they are better off with lower prices than higher prices (hedge notwithstanding).

A bright spot might be if they fly more often in 3&4Q 2006-7 thus increasing their unhedged % of fuel costs.

Tough call unless we have more details on the types of hedges & strike prices they entered into.

Simonkabz said...

Happy new year cold tusker, though I prefer warm tusker. Watz ur view on Kenya-re? R they still on? Wot do u think on investing in Everready? Guddy.

coldtusker said...

Simon - KenRe... wait for the prospectus... chances are it will be sold at a discount to NAV since it buys the govt goodwill just before the elections!

Eveready - Not for me... but the price is great for speculators!