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Kenya airways Right Issue
Rank: Chief Joined: 5/31/2011 Posts: 5,121
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ProverB wrote:mwekez@ji wrote:
Something is not adding up in your figures.
How can you assume that the KQ would have generated the same revenue with so much additional shares/capital and borrowings.
How can you say that the company cannot grow by double digit yet its operations are doubling.
7 years in a row...kq has recorded increased revenues..while recording decline in operating margins (except for 2010-11)...meaning for every shilling in revenue..less and less remains as profits.. Operations doubling means more passengers vs more aggressive expenditure in getting those more passengers... it costs more per passenger and per unit of cargo on transit than it did years ago.. No doubt operations will double...but so will costs... shareholders are pumping new cash into KQ..this ain't KQ's money...ksh20billion plus..the issue is when shareholders will receive a return on that cash... definately not next year..  As long as the margins are positive, then the bottom line will increase with increase in revenues, right? There will be a lag in growing the bottom line but it will certainly grow, right?
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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mwekez@ji wrote:
As long as the margins are positive, then the bottom line will increase with increase in revenues, right?
There will be a lag in growing the bottom line but it will certainly grow, right?
Easiest way to follow KQ... focus on 1 shilling of revenues.. what percentage goes to costs..what percentage ends up as profit ..the more that remains as profit..the better the efficiency of KQ operations.. ..other factors can be misleading.. eg..ever popular growth in passenger numbers..increase in planes and flight routes.. etc.. ..follow the shilling. # ..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: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@proverb welcome back , you finished it in one post, real fundamental analysis...
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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ProverB wrote:mwekez@ji wrote:
As long as the margins are positive, then the bottom line will increase with increase in revenues, right?
There will be a lag in growing the bottom line but it will certainly grow, right?
Easiest way to follow KQ... focus on 1 shilling of revenues.. what percentage goes to costs..what percentage ends up as profit ..the more that remains as profit..the better the efficiency of KQ operations.. ..other factors can be misleading.. eg..ever popular growth in passenger numbers..increase in planes and flight routes.. etc.. ..follow the shilling. # As long as Marginal Revenue > Marginal Cost, then KQ will tick ... as long as the shilling is followed by less than one shilling in cost, then KQ will tick ...
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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WTH, some KQ rights have traded, at 5 cents!!! Circa 330,000 rights. Must be one of the big moneyed boys. Just seen it in NSE report.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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... .. ..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: 3/12/2010 Posts: 1,199 Location: Eastlander
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mwekez@ji wrote:WTH, some KQ rights have traded, at 5 cents!!! Circa 330,000 rights. Must be one of the big moneyed boys. Just seen it in NSE report. ..only because it couldn't trade lower than stipulated 14.00.. This ought to be a sign of what general market thinks of the share valuation.. it is worth way cheaper than 14.00 Assuming Institutional investors keep their word and take up rights due them..and the same for foreign investors.. ..local individuals control about 22% of total shares issued.. translating to 400Million new share in retail trader hands... :) ..to assume the share price will not feel supply pressures hence drop would be really a long short...especially in the short to medium term.. I still retain.. ideal price..is sub 10bob.. ..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: User Joined: 1/24/2012 Posts: 1,675 Location: In Da Hood
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the index jumped to 3400 . wow !
and quarterly report of the nse shows foreigners were busy buying . aiiigh .
yenyewe.... if you bought your shares during the 3072 lows just keep them
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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QW25091985 wrote:the index jumped to 3400 . wow !
and quarterly report of the nse shows foreigners were busy buying . aiiigh .
yenyewe.... if you bought your shares during the 3072 lows just keep them And it has jumped with good turnover, over 500M. What the next point if such turnover is maintained?
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: User Joined: 1/24/2012 Posts: 1,675 Location: In Da Hood
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mwekez@ji wrote:QW25091985 wrote:the index jumped to 3400 . wow !
and quarterly report of the nse shows foreigners were busy buying . aiiigh .
yenyewe.... if you bought your shares during the 3072 lows just keep them And it has jumped with good turnover, over 500M. What the next point if such turnover is maintained? 3500 is gonna be sliced through . if such bullishness is maintained even after book closure for most of this stocks i think they will rally .. but i'd rather wait for book closure to see what next . Lol. i think wanjiku will be caught napping again and will be forced to buy the stocks at a high price
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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ProverB wrote:mwekez@ji wrote:WTH, some KQ rights have traded, at 5 cents!!! Circa 330,000 rights. Must be one of the big moneyed boys. Just seen it in NSE report. ..only because it couldn't trade lower than stipulated 14.00.. This ought to be a sign of what general market thinks of the share valuation.. it is worth way cheaper than 14.00 Assuming Institutional investors keep their word and take up rights due them..and the same for foreign investors.. ..local individuals control about 22% of total shares issued.. translating to 400Million new share in retail trader hands... :) ..to assume the share price will not feel supply pressures hence drop would be really a long short...especially in the short to medium term.. I still retain.. ideal price..is sub 10bob.. “At a price of five cents per right, we expect demand to be healthy at this price level,” the brokerage firm had said in its Tuesday market report. Mr Nderi also attributed the low demand to lack of block sales, which would attract institutional investors.I retain, the ideal price ... is >15.10
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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There is a reason I don't talk about KQ this days...take a hint from my silence.
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Rank: User Joined: 1/24/2012 Posts: 1,675 Location: In Da Hood
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ProverB wrote:mwekez@ji wrote:WTH, some KQ rights have traded, at 5 cents!!! Circa 330,000 rights. Must be one of the big moneyed boys. Just seen it in NSE report. ..only because it couldn't trade lower than stipulated 14.00.. This ought to be a sign of what general market thinks of the share valuation.. it is worth way cheaper than 14.00 Assuming Institutional investors keep their word and take up rights due them..and the same for foreign investors.. ..local individuals control about 22% of total shares issued.. translating to 400Million new share in retail trader hands... :) ..to assume the share price will not feel supply pressures hence drop would be really a long short...especially in the short to medium term.. I still retain.. ideal price..is sub 10bob.. eiiiish ! come down my friend . some of us are trying to make money with this rights issue . 
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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QW25091985 wrote:ProverB wrote:mwekez@ji wrote:WTH, some KQ rights have traded, at 5 cents!!! Circa 330,000 rights. Must be one of the big moneyed boys. Just seen it in NSE report. ..only because it couldn't trade lower than stipulated 14.00.. This ought to be a sign of what general market thinks of the share valuation.. it is worth way cheaper than 14.00 Assuming Institutional investors keep their word and take up rights due them..and the same for foreign investors.. ..local individuals control about 22% of total shares issued.. translating to 400Million new share in retail trader hands... :) ..to assume the share price will not feel supply pressures hence drop would be really a long short...especially in the short to medium term.. I still retain.. ideal price..is sub 10bob.. eiiiish ! come down my friend . some of us are trying to make money with this rights issue . Circa 14 has held for a while now. All wanjiku should place their offers here to create the bulk shares that qualified/institutional investors want. Then KQ will be all institutional Otherwise, this tiny volumes will drive this counter to single digit. and if the volumes supplied remain tiny even at single digit, then it will stay there for a loooooooooooong time~!
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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KQ Rights Issue: A Grand Plan Facing Strong Headwinds My 7 page report on KQ on this link http://contrarianinvesti...-facing-strong-headwinds
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Rank: Member Joined: 1/29/2011 Posts: 257
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Excellent piece @ the deal "All intelligent investing is value investing -- acquiring more than you are paying for. You must value the business in order to value the stock." - Charlie Munger.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Excellent piece indeed. Even Bankelele is directing guyz to your write-up. 2 questions: 1. How did you arrive at the KES 12 2. According to you, whats the ideal price for this share/the minimum price that the share should ideally trade
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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