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Kenya Airways: Stock to watch...
Rank: Member Joined: 1/31/2007 Posts: 304
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VituVingiSana wrote:mwanahisa wrote:I attended the Investor Briefing and interestingly the cash flow hedges did not feature in the presentation. The fuel derivatives were a small loss and the Chairman was really happy with the fact that they had gotten a handle on these.
I am trying to establish what is the nature of the cash flow hedges to determine what is the likely position at the end of the year.
As I had predicted, operating profits were really good, so that was a positive outcome at least. If KQ wanted to pay off (terminate) the hedges as of 30 Sep 2010, they would have had to pay the 'loss' as shown in the Comprehensive Income... Of course, this 'deficit' could increase/decrease based on the Fuel prices as these Hedges come due... @VVS The hedges in question are not on fuel but on their foreign currency denominated obligations....for fuel hedges, as per their hf yr briefing the management have the matter under control.
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Rank: Chief Joined: 1/3/2007 Posts: 18,259 Location: Nairobi
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moneydust wrote:VituVingiSana wrote:mwanahisa wrote:I attended the Investor Briefing and interestingly the cash flow hedges did not feature in the presentation. The fuel derivatives were a small loss and the Chairman was really happy with the fact that they had gotten a handle on these.
I am trying to establish what is the nature of the cash flow hedges to determine what is the likely position at the end of the year.
As I had predicted, operating profits were really good, so that was a positive outcome at least. If KQ wanted to pay off (terminate) the hedges as of 30 Sep 2010, they would have had to pay the 'loss' as shown in the Comprehensive Income... Of course, this 'deficit' could increase/decrease based on the Fuel prices as these Hedges come due... @VVS The hedges in question are not on fuel but on their foreign currency denominated obligations....for fuel hedges, as per their hf yr briefing the management have the matter under control. Hmmm... the Presentation says 'cashflow' hedges not forex hedges... If KQ were to hedge forex it would be against a weaker KES (or stronger $) not a strong KES or weaker US$... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Guys today I've done a comprehensive research on KQ based on the Half year financials and commentary... At these levels KQ is a GREAT BUY so investors should not give a damn whether its going up or not right now all they should know is that the price will follo these results eventually... These are a few areas I found positive. 1. Positive cashflows
2. Forward P/E of 7-8
3. Price to book of 0.9
4. Economic growth and tourism growth
5. Fair management of derivatives
Though they were 2 MAIN negatives that could be responsible for the price stagnation. 1. Fairly poor dividend yield of 2.2%
2. The economic stimulus in the USA will lead to the weakening of the dollar hence hurting their revenues
But on a risk reward analysis KQ looks like a buy to me... IMHO p.s I do not own any KQ so research is unbiased Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Guys today I've done a comprehensive research on KQ based on the Half year financials and commentary... At these levels KQ is a GREAT BUY so investors should not give a damn whether its going up or not right now all they should know is that the price will follo these results eventually... These are a few areas I found positive. 1. Positive cashflows
2. Forward P/E of 7-8
3. Price to book of 0.9
4. Economic growth and tourism growth
5. Fair management of derivatives
Though they were 2 MAIN negatives that could be responsible for the price stagnation. 1. Fairly poor dividend yield of 2.2%
2. The economic stimulus in the USA will lead to the weakening of the dollar hence hurting their revenues
But on a risk reward analysis KQ looks like a buy to me... IMHO p.s I do not own any KQ so research is unbiased Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@guru. You r a great stock picker. I dont know how you do it, but ur good. The day ill sell my kq shares will be the end of an era. I cant wait. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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msafiri wrote:..Kenya Airways: Stock to watch... and we are still watching. Bytheway.. msafiri..why the name? KQ used the same name alternately on tweeter..coincidence? just asking. ..i could be wrong. And on other news.. @Guru267..nicely done. nevertheless.. i keep watching. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Their margins are so poor... Profitability will never be consistent Life is short. Live passionately.
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Rank: Veteran Joined: 3/16/2009 Posts: 1,464
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@Guru,
Personally I think the low dividend yield is almost solely responsible for the 'stagnation' in share price
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Rank: Elder Joined: 7/21/2010 Posts: 6,192 Location: nairobi
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This guys are good dividend payers wacha rako. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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I blame it on the Insititutional investors....who have decided to exit at the wrong time...this is a big risk to the NSE...once the foreigners exit the NSE will rock.
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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mlennyma wrote:This guys are good dividend payers wacha rako. he's talking on historical dividend yield.. all those years the stock traded over 60 with shs0.70 dividend.. the lower the price the higher the Div Yield hence "Good" dividend paying..compare to price. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Veteran Joined: 7/24/2008 Posts: 781
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the deal wrote:I blame it on the Insititutional investors....who have decided to exit at the wrong time...this is a big risk to the NSE...once the foreigners exit the NSE will rock. no need to worry...the foreigners will most probably waltz their way in by the end of this month to early next year. The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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Rank: Chief Joined: 1/3/2007 Posts: 18,259 Location: Nairobi
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Based on the cash needs of KQ the dividend may be just 1/-... It is a growth firm at the moment... KQ 'spoilt' us with dividends coz most high growth firms do not pay dividends... KQ is planning to buy/lease planes worth over $1bn [KES 82 billion] in the next 3 years... The deposits required are at least $25mn... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/2/2008 Posts: 1,438
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VituVingiSana wrote:Based on the cash needs of KQ the dividend may be just 1/-... It is a growth firm at the moment... KQ 'spoilt' us with dividends coz most high growth firms do not pay dividends...
KQ is planning to buy/lease planes worth over $1bn [KES 82 billion] in the next 3 years... The deposits required are at least $25mn... When did KQ ever spoil us? The highest dividend KQ has ever paid in a financial year has been Kshs 1.75. As a matter of fact KQ's dividend payout ratio has been fairly low except in the last couple of years where it rose even though KQ slashed the dividend. I guess they felt that they could not go lower than Kshs 1, in spite of the hard times (lower EPS).
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Rank: Chief Joined: 1/3/2007 Posts: 18,259 Location: Nairobi
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mwanahisa wrote:VituVingiSana wrote:Based on the cash needs of KQ the dividend may be just 1/-... It is a growth firm at the moment... KQ 'spoilt' us with dividends coz most high growth firms do not pay dividends...
KQ is planning to buy/lease planes worth over $1bn [KES 82 billion] in the next 3 years... The deposits required are at least $25mn... When did KQ ever spoil us? The highest dividend KQ has ever paid in a financial year has been Kshs 1.75. As a matter of fact KQ's dividend payout ratio has been fairly low except in the last couple of years where it rose even though KQ slashed the dividend. I guess they felt that they could not go lower than Kshs 1, in spite of the hard times (lower EPS). LOL... 'Spoilt' meaning that for a growth firm they even gave anything... That said I like a dividend too... Many high(er) growth firms pay a zero (or small) dividend to expand... Also many lenders prefer low/zero dividends coz that leaves the cash in the business... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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As long as the insititutions continue to dump the stock...KQ will tank...just pray for a big buyer to come along cos KQ has expanded n the expansion is starting to pay off big time...
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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I cant wait myself to see this Great Stock start the upward surge. i think we are were we were in late Nov 2004, early Dec 2004 when KQ suddenly began the take off past KES 10 to reach an all time high of KES 34 when TN announced the results in late May 2005. And it didnt stop there, by the time investors were going for the AGM in Sept, the stock was trading post 70!!!! For those who haven't boarded this plane, i suggest you consider flying KQ! Disclaimer! History doesnt have to repeat itself! @SufficientlyP
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Uhmmm maybe we need to trade at a Trailing PE of below 10 to clear the excess supply...42.50 anyone?
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Rank: Elder Joined: 12/6/2008 Posts: 3,558
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SShhhh, hush kidogo please, tunajaribu kupanda! Meru Holiness
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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Still watching. 
Thank God that is what i chose to do.
low of 42.00..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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