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CFC Stanbic Rights
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msafiri
#1 Posted : Tuesday, September 11, 2012 3:55:52 PM
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Location: Bermuda
CFC Stanbic is one of the most undervalued stocks on the NSE (price to book value of 0.60) i.e the market value is less than book value and trailing PE is less than 6. The rights which start trading are at a 30% discount. So long as they trade at sub KES 10 prices, the rights represent incredible value. For a full report sign up at:

http://www.ashantiresear...esearch-reports_12.html

When you see clouds gathering, prepare to catch rainwater. - African proverb
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Ericsson
#2 Posted : Tuesday, September 11, 2012 5:32:59 PM
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The company is underperforming with the huge assets it has.
The profits are so low compared to the assets they have.
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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msafiri
#3 Posted : Wednesday, September 12, 2012 8:19:07 AM
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True...the company is under-performing relative to assets. However, strong performance of a company does not necessarily mean that its shares are good value - CFC Stanbic is a good value pick. It reports significant profits which are growing by the year and its market value is below book value (by 40%!). CFC's performance has not been as stellar as that of Equity, KCB, CO-OP, the market has however over-punished the stock - a reversion to mean is inevitable.
When you see clouds gathering, prepare to catch rainwater. - African proverb
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VituVingiSana
#4 Posted : Wednesday, September 12, 2012 9:42:27 AM
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The lowest RoE or RoA among its peers. Banks with 1/2 the asset size e.g. I&M, NIC & DTB make the same level of profits.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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msafiri
#5 Posted : Wednesday, September 12, 2012 10:48:19 AM
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Yes,true very low ROE and ROA - ROE - 11%, NIC 29%, ROA 2% vs 6% compared to NIC (based on June 30, 2012 results) however the Price to book value at 0.61 compared to 1.2 for NIC makes this a cheap stock - some slashing of costs will push CFC Stanbic way ahead of NIC in terms of profits.
When you see clouds gathering, prepare to catch rainwater. - African proverb
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VituVingiSana
#6 Posted : Wednesday, September 12, 2012 11:14:28 AM
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msafiri wrote:
Yes,true very low ROE and ROA - ROE - 11%, NIC 29%, ROA 2% vs 6% compared to NIC (based on June 30, 2012 results) however the Price to book value at 0.61 compared to 1.2 for NIC makes this a cheap stock - some slashing of costs will push CFC Stanbic way ahead of NIC in terms of profits.
The issue that I have is that we have been hearing that story for years. I am not saying it cannot happen but the culture at CFC Stanbic (post-CFC) is not conducive to SMEs which will be tomorrow's blue-chips.

Compare NIC, DTB and I&M [All 3 are public firms. I&M's proxy = City Trust] to CFC Stanbic (post CFC).

The 3 have grown their balance sheets, profits & expanded regionally. They were much smaller than CFCStanbic 5 years ago but have maintained a gradual yet 30%+ y-o-y growth in profits. It's about culture, flexibility & being nimble.

CFCStanbic is not allowed to expand into EAC where Stanbic exists e.g. Uganda whereas:
NIC is going into Uganda & is in TZ.
DTBK has a UG & TZ subsidiary. Also in Burundi. Plans for RW.
I&M is not in Uganda but in TZ & Rwanda (as of July 2012). And Mauritius.

Kenya is a mature/competitive banking market vs EAC. Can CFCStanbic (not Standard Bank of SA aka Stanbic) enter S.Sudan? I am sure NIC/DTB/I&M will enter SS within 3 years. Equity, Coop & KCB have already made the move.

If CFCStanbic can sweat the assets & reduce the costs then, yes, I agree. At this point I am skeptical.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Ericsson
#7 Posted : Wednesday, September 12, 2012 12:21:16 PM
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CFCStanbic are in South Sudan;they opened their first branch this year
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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VituVingiSana
#8 Posted : Wednesday, September 12, 2012 1:02:13 PM
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Ericsson wrote:
CFCStanbic are in South Sudan;they opened their first branch this year
CFCStanbic or Stanbic?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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xxxxx
#9 Posted : Wednesday, September 12, 2012 1:32:04 PM
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VituVingiSana wrote:
Ericsson wrote:
CFCStanbic are in South Sudan;they opened their first branch this year
CFCStanbic or Stanbic?


It is definitely CFC Stanbic and apparently part of the funds from this rights issue are to be dedicated towards the South Sudan business.
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VituVingiSana
#10 Posted : Wednesday, September 12, 2012 1:38:29 PM
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xxxxx wrote:
VituVingiSana wrote:
Ericsson wrote:
CFCStanbic are in South Sudan;they opened their first branch this year
CFCStanbic or Stanbic?

It is definitely CFC Stanbic and apparently part of the funds from this rights issue are to be dedicated towards the South Sudan business.
Thanks.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mwekez@ji
#11 Posted : Wednesday, September 12, 2012 1:48:32 PM
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The rights issue opened today. Where is the IM?
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xxxxx
#12 Posted : Wednesday, September 12, 2012 7:52:21 PM
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mwekez@ji wrote:
The rights issue opened today. Where is the IM?



http://www.cfcstanbicban...2012%20September%205.pdf
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mwekez@ji
#13 Posted : Thursday, September 13, 2012 8:43:43 AM
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@X5, muchas gracias
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StatMeister
#14 Posted : Monday, October 08, 2012 1:31:08 PM
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rights and shares heading south, dilution
A bad day fishing is better than a good day at work
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StatMeister
#15 Posted : Tuesday, October 09, 2012 12:25:30 PM
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The share dilution implies a pre-rights price of 42 is equivalent to post-rights price of 29.

but why is the insurance also down-trending?
A bad day fishing is better than a good day at work
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hisah
#16 Posted : Tuesday, October 09, 2012 4:52:01 PM
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This CFC behaviour is bizarre... Almost like KQ. Is something smoldering beneath the carpet...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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VituVingiSana
#17 Posted : Wednesday, October 10, 2012 12:42:25 AM
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This is a subtle takeover by Standard Bank of South Africa at a discount. Watch this space.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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FUNKY
#18 Posted : Wednesday, October 24, 2012 11:24:33 AM
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There has been a trade of 3 million shares at 38/- today...
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xxxxx
#19 Posted : Wednesday, October 24, 2012 12:47:49 PM
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FUNKY wrote:
There has been a trade of 3 million shares at 38/- today...


May be the rights issue was undersubscribedd'oh! d'oh! d'oh! d'oh!
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hisah
#20 Posted : Wednesday, October 24, 2012 3:01:36 PM
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Joined: 8/4/2010
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FUNKY wrote:
There has been a trade of 3 million shares at 38/- today...


A turnover of 114M with a day low of 35.25/- This thing is pointing south. Also this volume of 3M share is the 2nd highest in the last 5yrs. The highest being 6M shares back in May 2011.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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