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Research Report: Kenyan Cement Stocks present a Mixed Bag
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the deal
#11 Posted : Monday, November 07, 2011 10:04:02 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
guru267 wrote:
the deal wrote:

ARM today reports a 61% drop in profits...debt to equity of 62% i knew it was a matter of time before their debts caught up with them.


@the deal Why would I sell ARM when revenues were up 37%?? Business is clearly still booming even with increased supply and competitionvfrom other players..

Exchange loss provisions can be written back as income at anytime the kshs improves so not much worries there..

Thats not to say that ARM is cheap, I just dont see any reason for it to fall.

When analysing a cement stock you focus on it's balance sheet i.e net debt/equity, cash flow/Share and energy costs...ARM has the weakest balance sheet among listed cement firms..in short ARM business model of borrowing to the neck is unsustainable...
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guru267
#12 Posted : Monday, November 07, 2011 10:24:10 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
the deal wrote:

When analysing a cement stock you focus on it's balance sheet i.e net debt/equity, cash flow/Share and energy costs...ARM has the weakest balance sheet among listed cement firms..in short ARM business model of borrowing to the neck is unsustainable...


If the debt is used to invest in projects that generate earnings and cashflow which can grow fast enough to service interest charges of the debt then I dont see what the problem is..

finance 101: Debt is always cheaper than equity my friend..
Mark 12:29
Deuteronomy 4:16
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Aguytrying
#13 Posted : Wednesday, May 09, 2012 11:01:52 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Now that ARM is on an explainable rally to heaven and bamburi is languishing at a low price.
Anyway, How is the cement industry shaping up as regards competition(national cement, increasing capacity from ARM, Bamburi)?
The investor's chief problem - and even his worst enemy - is likely to be himself
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