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Housing Finance: HFCK a diamond in the rough
Rank: Chief Joined: 5/31/2011 Posts: 5,121
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@dave.kim, #KYI - Know Your Investments
HF is a financial intermediary. Notice 2008 it raised KES 2B via a rights issue. 2010 it raised KES 7B via a bond issue. 2012 it has raised KES 3B via bond issue (2nd tranche). HF has also raised funds via other sources. This money is not to be held as cash and cash equivalents but is to be used in the banks core business/operation (lending) in order to generate income.
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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guru267 wrote:Mukiri wrote:dave.kim wrote:I continued doing my homework and checked the financials from 2007 and the cash flow has been negative ever since. These guys have been spending more money than they are making.Thats it!Am cashing out In December? Boss, you are brave! If what you say is true, I'll wait for a 17 thereabouts mid to end of next month. Should i be made to believe that some investors are not aware of the cash position/solvency of their investments BEFORE investing?? Half baked investing if i ever seen some!!  Madam, you are the expert. When I bought this share, I expected magic. It has made me some money, albeit very little. I come from the skul of 'Make-your-money-and-jump-into-the-next-money-making-bus' When the stock starts behaving, I'll gladly come back. But I'll never shy away from considering advice, no matter how preposterous it sounds. And I'm glad it came out, now you (the expert) has allied any doubts, no? Market behavior varies, from one monkey to the other 
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Rank: Member Joined: 6/25/2010 Posts: 176
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guru267 wrote:dave.kim wrote:I continued doing my homework and checked the financials from 2007 and the cash flow has been negative ever since. These guys have been spending more money than they are making.Thats it!Am cashing out Are you sure you can really read a cashflow statement?? On a cashflow statement there are two sections "cash from operations" and the "closing cash balance"The cash from operations should always be positive.. That said, the cash balance can be negative every year without causing any problems! So from a cashflow point of view there are no problems with HFCK! Guru am talking about net cash flows from operating activities. I also asked myself questions considering that equity and britam are increasing their shareholding. But it is what it is. Check out the annual reports and see the breakdown for yourself. Rule No.1 is never lose money. Rule No.2 is never forget rule number one
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Rank: Member Joined: 6/25/2010 Posts: 176
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mwekez@ji wrote:@dave.kim, #KYI - Know Your Investments
HF is a financial intermediary. Notice 2008 it raised KES 2B via a rights issue. 2010 it raised KES 7B via a bond issue. 2012 it has raised KES 3B via bond issue (2nd tranche). HF has also raised funds via other sources. This money is not to be held as cash and cash equivalents but is to be used in the banks core business/operation (lending) in order to generate income.
And that 7B for 2010 was included in the cashflow statement as Operating Cash Flow. Shouldnt it have been reflected in the Cash Flow from Financial activities??Also that is what led to the positive CFO in 2010 report. I was also a keen investor in HF until I realised this.Correct me if am wrong but shouldnt it be a cause of concern if CFO is negative 5 years straight?? Rule No.1 is never lose money. Rule No.2 is never forget rule number one
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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dave.kim wrote:Guru am talking about net cash flows from operating activities. I also asked myself questions considering that equity and britam are increasing their shareholding. But it is what it is. Check out the annual reports and see the breakdown for yourself. Yeah you are right.. A company with negative operational cash is unhealthy but not in all situations! It is possible that a company like hfck may find itself in this situation because it finances most of its core business with bonds and loans instead of using customer deposits like commercial banks which until recently it could not access!! Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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dave.kim wrote:mwekez@ji wrote:@dave.kim, #KYI - Know Your Investments
HF is a financial intermediary. Notice 2008 it raised KES 2B via a rights issue. 2010 it raised KES 7B via a bond issue. 2012 it has raised KES 3B via bond issue (2nd tranche). HF has also raised funds via other sources. This money is not to be held as cash and cash equivalents but is to be used in the banks core business/operation (lending) in order to generate income.
And that 7B for 2010 was included in the cashflow statement as Operating Cash Flow. Shouldnt it have been reflected in the Cash Flow from Financial activities??Also that is what led to the positive CFO in 2010 report. I was also a keen investor in HF until I realised this.Correct me if am wrong but shouldnt it be a cause of concern if CFO is negative 5 years straight?? Banks do financial intermediation and therefore any money received via bonds/customer deposits/borrowings are considered operating cashflows. (this is unlike non-banks e.g. manufacturing companies). Check the negative Net cash flows from operating activities and notice they are as a result of the bank having funds that needed to be allocated to operations/core business/lending 2008; KES (739,715,000) – KES 2B raised via right issue in the year needed to applied from this point 2009; KES (265,520,000) 2010; KES 6,118,593,000 – KES 7B raised via bond issue in the year needed to applied from this point 2011; KES (2,812,166,000) Notice cash and cash equivalents held at the end of the given years meaning the Bank was very liquid and needed to apply the funds in operations/core business/lending 2008; KES 2,772,499,000 2009; KES 2,426,258,000 2010; KES 8,286,656,000 2011; KES 5,108,217,000 Above reflects all is well and nothing should worry. Further, liquidity ratio as in Q3 2012 stood at 30.30% (far above the statutory requirement of 20%)
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Rank: Member Joined: 6/25/2010 Posts: 176
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Mwezekaji.point noted.I guess I can use the owner's earnings instead...cheers for the clarification Rule No.1 is never lose money. Rule No.2 is never forget rule number one
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Rank: Elder Joined: 6/23/2009 Posts: 13,517 Location: nairobi
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KES 17 now guaranteed as early as tomorrow! We asked wazuans to buy when trades were as low as KES 14.50. I await KES 20 to print on FYR announcement wit expected min dividend of KES .70
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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obiero wrote:KES 17 now guaranteed as early as tomorrow! We asked wazuans to buy when trades were as low as KES 14.50. I await KES 20 to print on FYR announcement wit expected min dividend of KES .70 was as low as 13.20. Life is short. Live passionately.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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sparkly wrote:obiero wrote:KES 17 now guaranteed as early as tomorrow! We asked wazuans to buy when trades were as low as KES 14.50. I await KES 20 to print on FYR announcement wit expected min dividend of KES .70 was as low as 13.20. i was screaming myself hoarce here for chaps to buy at 14.00. sasa twende works. i think they'll give us 0.8. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Rally could be paused by FY earnings, the dividend should help. Good stock for long termers.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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A bonus plus dividend will be good enough "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 6/23/2009 Posts: 13,517 Location: nairobi
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mlennyma wrote:A bonus plus dividend will be good enough @mlennyma the thought of a bonus may be far fetched. nevertheless, its a good dream that is encouraged
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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Aguytrying wrote:sparkly wrote:obiero wrote:KES 17 now guaranteed as early as tomorrow! We asked wazuans to buy when trades were as low as KES 14.50. I await KES 20 to print on FYR announcement wit expected min dividend of KES .70 was as low as 13.20. i was screaming myself hoarce here for chaps to buy at 14.00. sasa twende works. i think they'll give us 0.8. Some heard you
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Rank: Member Joined: 4/25/2012 Posts: 110
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Mukiri wrote:Aguytrying wrote:sparkly wrote:obiero wrote:KES 17 now guaranteed as early as tomorrow! We asked wazuans to buy when trades were as low as KES 14.50. I await KES 20 to print on FYR announcement wit expected min dividend of KES .70 was as low as 13.20. i was screaming myself hoarce here for chaps to buy at 14.00. sasa twende works. i think they'll give us 0.8. Some heard you I heard and am enjoying the ride. There is nothing as dangerous as an Idea, when there is only one Idea
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Here is another that got hammered hard by high Cost of Funds. A no brainer ~ Interest rate cycle FY'13.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." - Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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when i saw the board today, i thought 18.00 is on the cards. Now i see 20.00 opening up. it beats me why NSE or some counters are behaving this way. but its happenig. im in a double salvo with KENGEN too The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 11/28/2006 Posts: 1,799
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even everneedy is UP and has some huge demand???????
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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mwekez@ji wrote: "We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." - Warren Buffett If Wazua had a hit button, i would hit it! Life is short. Live passionately.
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Housing Finance: HFCK a diamond in the rough
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