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IS Carbacid a safe/sure bet?
Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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IS Carbacid a safe/sure bet? Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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Yes it is a very safe heaven at the current price as it cannot go below. It is a good BUY even as the price will sure reach back to the 180-200 levels and even keeping in mind they have a monopoly in the production of CO2 gas.
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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Ok. Am waiting for guru,mkonomtupu et. al. to advice. They have experience and i have some cash and transport to Nairobi! But i dont think KES180 can be reached before next years elections. do you? Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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If Carbacid is as great as you guys suggest....why did Centum sell??? look at the 1H results...they were quite dissapointing...i'm less bullish on industrial stocks...
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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Centum made money, and want to lose it (in real estate). I strongly think their decision was that they needed money for houses, and nothing to do with carbacid's performance! I have hopes in it! Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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Well Centum sold their share because they had almost tripled their value in Carbacid,any wise person would have done the same thing.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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the deal wrote:If Carbacid is as great as you guys suggest....why did Centum sell??? look at the 1H results...they were quite dissapointing...i'm less bullish on industrial stocks... Dude...r u serious???!!! Ur using centum as a yardstick!!!??!?!? -They did badly with KQ when they bought it at 120 -Uchumi wasnt great either -RVR was a flop just to name a few.... I also think selling Carb for them was a bubu!! Yes they doubled or close to tripled their cash but they get sucker punched by 30% tax on the other end. They pocketed 1.2B including divs Before tax, their cost was .418B which gives them a profit of 782M....after a 30% tax, it comes to 547.4M, Basically doubling their cash......
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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dunkang wrote:Centum made money, and want to lose it (in real estate). I strongly think their decision was that they needed money for houses, and nothing to do with carbacid's performance! I have hopes in it! heavily invested here too...if u look through their past performances, every four-five years, they have a slight dip in profits followed by an acceleration, wouldnt read too much into their HY as it is a fundamentally marvelous company...Buffett would prooly buy into it if he was in Kenya coz: - regular growth---check - Moat - -Check - fairly priced ---check
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Rank: Chief Joined: 1/3/2007 Posts: 18,221 Location: Nairobi
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Answer the question: No [There is no guarantee... Always a risk, no matter what. Even a solid past performer like Equity or BBK, etc] 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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@horton If a company is a monopoly and posts a drop in profits is a SELL..what would they do in face of a Bharti like onslaught?
Their MOAT is very weak if i had cash i would probably venture into this biz and give this guys a run for their money...anyways here is why i'm less bullish on Carbacid.
1. High electricity costs-look at your bill this month and put Carbacid in your perspective.
2. Super inflation- this will affect their non alcoholic segment
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@horton If a company is a monopoly and posts a drop in profits is a SELL..what would they do in face of a Bharti like onslaught?
Their MOAT is very weak if i had cash i would probably venture into this biz and give this guys a run for their money...anyways here is why i'm less bullish on Carbacid.
1. High electricity costs-look at your bill this month and put Carbacid in your perspective.
2. Super inflation- this will affect their non alcoholic segment
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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@deal, i agree fully with you on monopoly, though it is misleading to relate it with centum's exit. as a monopoly, even without cheap Chinese imports (read: eveready woes), they should be making more dough before compe arrives regardless of energy cost and dollar:shilling misbehavior. (Note, their raw materials are got from Nyandarua County, their market is Eastern African). Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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the deal wrote:@horton If a company is a monopoly and posts a drop in profits is a SELL..what would they do in face of a Bharti like onslaught?
Their MOAT is very weak if i had cash i would probably venture into this biz and give this guys a run for their money...anyways here is why i'm less bullish on Carbacid.
1. High electricity costs-look at your bill this month and put Carbacid in your perspective.
2. Super inflation- this will affect their non alcoholic segment
Well BOC and the other company..in Nyanza (spectra international I believe could be wrong about the name though) had (have) the money....they tried and failed miserably!! Pray tell...how is Carb's "moat weak"?? They have the most accessible source of CO2 in the region...even the mighty Linden group with all their resources know this quite well and they have burnt their fingers before in the CO2 match up.....there is also: -- LT contracts with soft drink manufacturers --Very High Net margins in the range of 40-50% show me another company on the NSE that can do over 40% in NM consistently?? --KO, PG have very strong businesses in their own rights as you know even they have a one off drop n profits...doesnt mean their business is "weak" its a mere speed bump carb is no exception....Carbs profits dropping by a mere 13% for the first time in 6-8 halves...does not constitute "fundamental weakness" I had spoken to the directors during at an AGM about a possible onslaught by the Linden group on Carb's CO2 turf but the director confidently told me that they should bring it on as Carb has been doing this business for over a very long time and have got really good at it...something BOC are wary of... --Zero leverage --Unlike BOC, Carbs business is still strong as there i no chinese made CO2 machines as is the case with BOCs core O2 business . There will never be an onslaught similar to bharti in this sector as it is : A- Not a Tech B- Quite specialized kinda like mining coz u gotta look for CO2 rich spots/fields to buy and the extract and these are far and few between... C- Market is not big enough for several players especially because of limited clientele and Reason B above Your reasons.... High electricity costs and Super inflation pretty much affects all industries in Kenya not just Carb.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@horton your post is well informed...i like such posts instead of facebook updates but its sad you dont mention what caused your carbacid to drop profits? it cant be a bump there is a problem...in that aspect Centum is ahead of you i.e lack of business...BOC is an ailing firm...i dont expect compe from...
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Horton wrote:
I also think selling Carb for them was a bubu!! Yes they doubled or close to tripled their cash but they get sucker punched by 30% tax on the other end. They pocketed 1.2B including divs Before tax, their cost was .418B which gives them a profit of 782M....after a 30% tax, it comes to 547.4M, Basically doubling their cash......
@Horton you are WRONG on this one. I confirm to you that centum is exempted from paying tax on their investment income. The ONLY income they pay tax on is parking fees from their idle plot on uhuru highway and interest from bank deposits, which are paltry. If you look at the financial you will see. In fact the company has huge tax assets (refunds due from KRA). For this reason centum has been the biggest creator of wealth on the nse in the longterm! Life is short. Live passionately.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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@ Sparkly.....They are not tax exempt...they had a tax credit mainly because of their accumulated loss in RVR...
I personally don't reckon centum is crème de la crème of the NSE far from it, they go into the housing so late....its like going to the Rave at 6am on a monday morning...good idea if it was earlier....again...im not saying its terrible...its just not the best!!!
On their annual report, they have a "deferred Tax asset"...got the following excerpt from a certain website...used it on one of my term papers a few years ago...will provide link once i get it...
Deferred tax assets are usually intrinsically less certain because there may not be future profits to claim against. Large losses lead to high deferred tax assets, which can make a weak business look as though it is backed by a stronger balance sheet than is the case. This is the major motive for the use of measures that exclude deferred tax, such as tangible common equity. Deferred tax assets are intangibles.
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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WAZUANS, if u can remember that BOC tried to take over Carbacid, but failed coz they could not manage to convince 80% of the shareholders (they could only manage 71% of the shareholders). This was followed by the infamous CMA suspension. later the alliance nominees (read: SKN Matiba) sold their stake (22%) to centum. Its a known fact that the Matibas were the ones opposed to the take-over. Now that the BOC can manage to convince the required 80%, i, strongly believe that the Linde ground (BOC owners) or any other interested entinty, might try a take-over (this firm is a monopoly, who hates monoploies?!), which, to me, MUST push the share price to above 150 (if and only if it happens before Dec. 2011). I recommend this shares to anyone with cash, like me, now! Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Horton wrote: @ Sparkly.....They are not tax exempt...they had a tax credit mainly because of their accumulated loss in RVR...
I personally don't reckon centum is crème de la crème of the NSE far from it, they go into the housing so late....its like going to the Rave at 6am on a monday morning...good idea if it was earlier....again...im not saying its terrible...its just not the best!!!
On their annual report, they have a "deferred Tax asset"...got the following excerpt from a certain website...used it on one of my term papers a few years ago...will provide link once i get it...
Deferred tax assets are usually intrinsically less certain because there may not be future profits to claim against. Large losses lead to high deferred tax assets, which can make a weak business look as though it is backed by a stronger balance sheet than is the case. This is the major motive for the use of measures that exclude deferred tax, such as tangible common equity. Deferred tax assets are intangibles.
@horton, its true they are exempt, on INVESTMENT INCOME. Looking at their published financials you will see pbt for 2011 is 2.294B while pat is 2.292B. Tax was 2m. Investment income alone was 2.261 B. You would expect the tax to be around 30% i.e. 650m since centum has not made an accounting loss in recent memory. Deferred tax is just a accounting term to disclose the difference between depreciation rates on fixed assets for tax and accounting . Centum has insignificant fixed assets so deferred tax is not an issue. You will also note that deferred tax is a BS not P&L item. Life is short. Live passionately.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Centum's unrealised gains can not be taxed...but with no CGT in Kenya their sale of Carbacid was not taxed.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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dont agree with that....no one is tax exempt
Capital Gains tax affects companies but not individuals....i trade stocks thru my company,......unrealized are not taxed until u sell
I believe carb transactions were offset due to the tax credit on the loss they made on other investments like rvr
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