Who owns Centum is the first issue that comes to mind after reading the 2009/2010 annual report because unlike other listed companies they have not listed the top 10 shareholders and neither a shareholder breakdown.
I make the assumption that the top shareholder listing was a statutory requirement but I stand corrected. On the other end, just a thought, could Centum be planning to de-list?
There is also no listing of the companies in which Centum have invested just again is odd as it them makes it very difficult to carry out comprehensive fundamental analysis.
Centum is a very interesting counter and has no equal on the bourse as they are a fund like Berkshire Hathaway (
Berkshire Hathway) so it defeats the purpose to have Centum plus other listed counters or mutual funds in your portfolio.
For the armchair investor just keep buying Centum and let them handle the rest for you. As Warren Buffet says he has invested 98% of his money in the company.
From the annual report and the Chairman's letter is is clear that Centum is going through a major realignment in its investment strategy where there seems to be a greater emphasis on balancing their portfolio.
Not the way many of us do it by buying across different sectors of the listed companies but by true diversification. Most of centums holdings have been in listed equities but more recently there has been an increase in unquoted and also fixed income
There is an increase in fixed income securities such as a 500 M in corporate bonds and there seems to be the creation of a war chest shown with the holding of large call deposits.
The cash position stands at almost one third of the total portfolio value a sign that something big is in the offing.
Centum is very good at getting return for its shareholders by having a strong board presence, its main income is from dividend payout, over 65% is from subsidiary companies and unquoted investments.
This could be an explanation on why they have divested from Eveready, or it could just be a realignment strategy.
With so little information provided in the annual report all we can do is speculate.
I have a love hate relationship with this counter, like many of you I have sometimes allowed my self to be driven by public opinion of the major investors in Centum.
As was raised by a contributor on my post on Eveready whose only justification for not investing in the stock was that Merali was a majority investor.
When you are looking at fundamentals you need to be able to see beyond the public perception of directors and learn to look at the value to bring to the company.
For those who are more in tune with what is happening in the investment arena would have noted that the real estate investment trusts (REITs) bill is hanging around the corner and its will soon be tabled in parliament.
Centum is a barometer of the market and the fact that they have recently invested in a property management company, Kenya National Properties Ltd. is a clear indication that REITS will soon be here, I would not be surprised if the first property in the kitty is International House.
The acquisition of Rasimu Ltd was a very ingenius way to take control of a listed company in this case Carbacid.
Centum has very solid fundamentals and fits very well into many armchair investors portfolio, with the anticipated introduction of REITS and the launch of the grain exchange expected great things for the long term.
For those speculators and short term investors avoid this as there will be no dividend for yet another year as the company prepares for war.