Wazua
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My Picks for 2014
Rank: Member Joined: 4/28/2009 Posts: 290
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Can anyone give coop bank what all these other performing fellows are smoking? For just as through the disobedience of the one man the many were made sinners, so also through the obedience of the one man the many will be made righteous. Romans 5:19
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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Ja-Kom wrote:Can anyone give coop bank what all these other performing fellows are smoking? I am sure in a few weeks time, we will see whether the results excite the market or note. Coop has never been a darling of foreign investors and institutional investors. At 18 or below I will keep buying.
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Rank: Member Joined: 3/26/2012 Posts: 830
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S.Mutaga III wrote:With the nse 20 share index fast approaching the 5000 psychological mark, my stock picking strategy for 2014 will rely on three main factors which are earnings growth, dividend yield and an event driven strategy whereby I intend to take advantage of discounted counters which will have rights issues in the course of the year. With this regard, my selection for 2014 is as follows in order of prioritization.
1) Pan Africa Insurance
The company is the king of life insurance in Kenya. With insurance penetration at 3%, there is vast room for growth in the insurance sector. The company has recorded phenomenal growth in earnings in the last three years. In its last financial year, its net profit increased by over 100% which was sterling performance compared to other insurers. This year's half year results tell the same story. The company's half year results were an increase of 266% from the previous year. This means that the company has already made all last years profits in half of this year. Last year, the company issued a final dividend of Ksh 3 per share. This year due to the excellent results, I expect a minimum of Ksh 5 per share in dividends and an earnings per share in excess of Ksh 12. This shows that despite the rally to Ksh 90, the share is still undervalued. With its parent company (Sanlam SA) aiming to get more shares in the market after insurance rules are reviewed, there is a guarantee of constant demand for the shares which means the price can only go up. At a dvidend of Ksh 5, the dividend yield is roughly 5.55%. My target price is Ksh 150 by mid year upon which I will review the prospects of this counter. In my opinion, the company is awash with cash and should reward the shareholders with handsome dividends or bonus shares.
2) Housing Finance Company
The mortgage lender may have lost its position to KCB's S&L Mortgages as the top mortgage company in Kenya, but it is worth a closer look. A quick delve into its books exposes massive debt in form of syndicated loans, but this is half the story. Housing Finance has recorded the best increase in earnings over the last five year period. The earnings have increased consistently year on year and this year's half year results tell the same- that this year the company will perform better than last year. I expect a final dividend of 0.75 and an interim dividend of 1.00 for 2014. At a price of Ksh 32.5, that is roughly 5.4% dividend yield. The real estate sector has more than enough room for growth. There is a demand of over 100,000 housing units against a supply of just 20,000 which means that there is enough money to be made by all players and there is need for more players in the business.
3) CFC Stanbic Holdings
The subsidiary of the Standard Bank of South Africa has been recording impressive earnings growth in the last three years. This counter does not have an impressive dividend yield but its earnings growth is wonderful. Most of the cash meant for dividends is used by management in expanding the banks presence in Kenya. Its main earnings driver has been transaction income which is from its core-business. This means that the good results are sustainable over a reasonable period of time. With the launch of its online share trading platform, the bank will see an increase in transaction income in the near future. The presence of an anchor shareholder (Standard Bank of South Africa) means that it is a less risky investment than other smaller banks. The bank has the best earnings growth in the banking sector in Kenya. With the presence of a banking bonanza in Kenya, this is one of the best counters to stash your cash. The share currently trades at a price of Ksh 88.50. It is one of the fastest growing banks in Kenya.
Overall Commentary:
1) Pan Africa Insurance - Ksh 90 (40% of portfolio)
2) Housing Finance - Ksh 32.50 (30% of portfolio)
3) CFC Stanbic Holdings - Ksh 88.50 (20% of portfolio)
4) Cash - 10% of portfolio
Why not invest all the money? This is because one of my three picks may record a reasonable price decline enabling me to pick more shares at a more discounted price. I believe that any investment bank that gives you more than 4 stock suggestions does not help you. What is the point of 10 stock recommendations?
This is my 2014 portfolio which will be adjusted periodically.
#Good Luck# 1. Pan Africa Buying Price = Ksh 90 Todays Price = Ksh 130 Return on investment = 44.4% 2. HFCK Buying Price = Ksh 32.5 Todays price = Ksh 33.25 Return on investment = 2.3% 3. CFC Stanbic Buying Price = Ksh 88.5 Todays price = Ksh 107 Return on Investment = 20.9% Total Aggregate gain in my portfolio = 22.6% NSE Index has shed about 4% since I started this thread. This means that all my three picks have outperformed the index. The strategy is holding perfectly. With capital of a conservative Ksh 100,000, the portfolio would now be worth Ksh 122,630 in less than two months. I will continue to hold on to these positions as I await the full year results before making my next move. #Good Luck# A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Member Joined: 3/26/2012 Posts: 830
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S.Mutaga III wrote:S.Mutaga III wrote:With the nse 20 share index fast approaching the 5000 psychological mark, my stock picking strategy for 2014 will rely on three main factors which are earnings growth, dividend yield and an event driven strategy whereby I intend to take advantage of discounted counters which will have rights issues in the course of the year. With this regard, my selection for 2014 is as follows in order of prioritization.
1) Pan Africa Insurance
The company is the king of life insurance in Kenya. With insurance penetration at 3%, there is vast room for growth in the insurance sector. The company has recorded phenomenal growth in earnings in the last three years. In its last financial year, its net profit increased by over 100% which was sterling performance compared to other insurers. This year's half year results tell the same story. The company's half year results were an increase of 266% from the previous year. This means that the company has already made all last years profits in half of this year. Last year, the company issued a final dividend of Ksh 3 per share. This year due to the excellent results, I expect a minimum of Ksh 5 per share in dividends and an earnings per share in excess of Ksh 12. This shows that despite the rally to Ksh 90, the share is still undervalued. With its parent company (Sanlam SA) aiming to get more shares in the market after insurance rules are reviewed, there is a guarantee of constant demand for the shares which means the price can only go up. At a dvidend of Ksh 5, the dividend yield is roughly 5.55%. My target price is Ksh 150 by mid year upon which I will review the prospects of this counter. In my opinion, the company is awash with cash and should reward the shareholders with handsome dividends or bonus shares.
2) Housing Finance Company
The mortgage lender may have lost its position to KCB's S&L Mortgages as the top mortgage company in Kenya, but it is worth a closer look. A quick delve into its books exposes massive debt in form of syndicated loans, but this is half the story. Housing Finance has recorded the best increase in earnings over the last five year period. The earnings have increased consistently year on year and this year's half year results tell the same- that this year the company will perform better than last year. I expect a final dividend of 0.75 and an interim dividend of 1.00 for 2014. At a price of Ksh 32.5, that is roughly 5.4% dividend yield. The real estate sector has more than enough room for growth. There is a demand of over 100,000 housing units against a supply of just 20,000 which means that there is enough money to be made by all players and there is need for more players in the business.
3) CFC Stanbic Holdings
The subsidiary of the Standard Bank of South Africa has been recording impressive earnings growth in the last three years. This counter does not have an impressive dividend yield but its earnings growth is wonderful. Most of the cash meant for dividends is used by management in expanding the banks presence in Kenya. Its main earnings driver has been transaction income which is from its core-business. This means that the good results are sustainable over a reasonable period of time. With the launch of its online share trading platform, the bank will see an increase in transaction income in the near future. The presence of an anchor shareholder (Standard Bank of South Africa) means that it is a less risky investment than other smaller banks. The bank has the best earnings growth in the banking sector in Kenya. With the presence of a banking bonanza in Kenya, this is one of the best counters to stash your cash. The share currently trades at a price of Ksh 88.50. It is one of the fastest growing banks in Kenya.
Overall Commentary:
1) Pan Africa Insurance - Ksh 90 (40% of portfolio)
2) Housing Finance - Ksh 32.50 (30% of portfolio)
3) CFC Stanbic Holdings - Ksh 88.50 (20% of portfolio)
4) Cash - 10% of portfolio
Why not invest all the money? This is because one of my three picks may record a reasonable price decline enabling me to pick more shares at a more discounted price. I believe that any investment bank that gives you more than 4 stock suggestions does not help you. What is the point of 10 stock recommendations?
This is my 2014 portfolio which will be adjusted periodically.
#Good Luck# 1. Pan Africa Buying Price = Ksh 90 Todays Price = Ksh 130 Return on investment = 44.4% 2. HFCK Buying Price = Ksh 32.5 Todays price = Ksh 33.25 Return on investment = 2.3% 3. CFC Stanbic Buying Price = Ksh 88.5 Todays price = Ksh 107 Return on Investment = 20.9% Total Aggregate gain in my portfolio = 22.6% NSE Index has shed about 4% since I started this thread. This means that all my three picks have outperformed the index. The strategy is holding perfectly. With capital of a conservative Ksh 100,000, the portfolio would now be worth Ksh 122,630 in less than two months. I will continue to hold on to these positions as I await the full year results before making my next move. #Good Luck# It is almost 4 months since the year began hence a good time to evaluate this portfolio. 1. Pan Africa Buying Price = Ksh 90 Todays Price = Ksh 134 Return on investment = 48.8% 2. HFCK Buying Price = Ksh 32.5 Todays price = Ksh 37 Return on investment = 13.8% 3. CFC Stanbic Buying Price = Ksh 88.5 Todays Price = Ksh 121 Return on investment = 36.7% 4. Cash = 10% of original portfolio Total Aggregate gain in my portfolio = 31% Commentary The nse has shed around 1.5% since the beginning of the year to stand at 4921.13.After almost 4 months, the portfolio of a conservative Ksh 100,000 would now be worth Ksh 131,000.I look forward to any impending nse event such as a stock split or a rights issue to implement my event driven strategy. Research proves that there is a general positive reaction towards stock splits.I also seek to invest the idle cash that I have in my next move. My objective is to double the performance of the best performing hedgefund in the United States this year. #Good Luck# A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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young wrote:Your picks look good enough to reach your
desired targets.
Nonetheles, at least one pick outside finance
related sector out of the 3 would have been
excellent.
HFCK & CFC are virtually in the same sector
so any "financial shock" or CBK monetary policy
can affect both.
HFCK , PANAFRIC + A pick from another
sector would be perfect.
In a bull market just as we are now, minimum acceptable
growth is 50% in a selected counter but in a bear market, the minimum
is to beat the stock index.
You prefer HF over CFC? Why? @S.Mutanga, what is your investment strategy?
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Mukiri wrote:
You prefer HF over CFC? Why?
@S.Mutanga, what is your investment strategy?
Read post #1 of this thread.  Pesa Nane plans to be shilingi when he grows up.
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Rank: Member Joined: 3/26/2012 Posts: 830
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The investment strategy is event-driven. The strategy is holding perfectly. A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Hello Joined: 4/21/2014 Posts: 5
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Great Picks for 2014 but stocks performance can sometimes disappoint. get insights from analyst as well.http://ekeza.blogspot.com/p/robert-kiyosaki.html
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Rank: Member Joined: 3/26/2012 Posts: 830
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Seven months down the line. Time to reap where I sawed. HFCK Buying Price - Ksh 32.5 Current Price - Ksh 45 Dividends - Ksh 0.75 45+0.75-32.5=13.5 (40.76 % return on investment) PAN AFRICA Buying Price - Ksh 90 Current Price - Ksh 130 Dividend - Ksh 4.50 130+4.50-90= 44.5 (49.44% return on investment) CFC STANBIC HOLDINGS Buying Price - Ksh 88.50 Current Price - Ksh 128 128-88.50= 39.5 (44.63% return on investment) I am going to dispose off these counters first thing in the morning and book all my gains. Currently, I am accumulating the following counters: 1) LONGHORN PUBLISHERS Due to its small market capitalization of less than one billion, the stock does not receive much media attention. This is a double edged sword because it makes it invisible to speculators but also to investors. Below are the basic fundamentals: Profit Growth 2012/2013 = Company returned to profitability from a loss position in previous year. Half Year 2013/2014= 79% rise in profits before tax Commentary:- The counter is among the most undervalued currently in the stock exchange. Its half year results show that the company is on a profit trajectory. A deeper delve into its news section shows that it recently inked a deal with the government of Rwanda to supply books for the nation. I expect more growth outside Kenya to contribute to its bottom line. It is a perfect speculative buy for a six months time horizon to September when they will announce the full year results. The half year results already give a hint of how the full year results may turn out. I anticipate a final dividend of Ksh 1 per share making it have a projected dividend yield of 6.3%. I will accumulate at any price below Ksh 15.90. 2)LIBERTY HOLDINGS (K) P/E = 8.3 FY2012 = Ksh 857,849,000 FY2013 = Ksh 1,105,920,000 Dividend yield = 5.59% Important Information:- There is a pending Ksh 1 scrip dividend subject to shareholders and Capital Markets Authority approval. This means that you are guaranteed of Ksh 1 return on investment for each share you buy. I will explain what a scrip dividend is in the comments. COMMENTARY Naturally, I prefer investing in companies that show growth in profit after tax in the last two or three years, excellent dividend yields above 6% and low government shareholding. This counter has a dividend yield of 5.59% which means that at first sight, it fails to meet my criteria regarding dividend yield. However, with a scrip dividend assured of Ksh 1, the yield surpasses my 6% threshold. It is also important to note that insurance penetration in Kenya is still less than 4%. There hence exist very large potential for growth in Kenya alone. Insurance penetration in South Africa is 13%. In the near future, it will be almost mandatory to have some insurance cover of one form or another whether its life assurance etc. The fundamentals are sound and it is among the cheapest counters in the stock exchange currently. I will buy at any price below Ksh 18. Price today is Ksh 17.9 A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: New-farer Joined: 5/11/2011 Posts: 48
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I must say I've been wondering where you've been since you posted your picks and they all did well!
Congrats!
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Rank: Member Joined: 5/9/2014 Posts: 130 Location: Nairobi
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Good choices those were in early 2014 and your taking your picks in July again for the next 6 months. I've tried to track Longhorn and Liberty and none of my friends seems to favour any with the exception of Liberty for speculation purposes but thanks for your reinforcement commentary which may just help sway to or away from.
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Rank: Elder Joined: 9/23/2010 Posts: 2,221 Location: Sundowner,Amboseli
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Congrats @S.Mutaga 111 for the Great returns and nice commentary on CFCi @SufficientlyP
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Rank: Member Joined: 3/26/2012 Posts: 830
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I am happy to have outperformed the nse 20 share index. A good way to accumulate money to invest in real estate. On January, I asked my banker to loan me some cash for a real estate project, but I failed to qualify. my objective is to make a conservative 30% gain by end of the year from CFC Insurance and Longhorn and have enough capital for the project. Happy Hunting Wazuans A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Member Joined: 3/26/2012 Posts: 830
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guru267 wrote:these picks will give one 50% gains at best... I'm looking for more from my portfolio! Which were your options and how have they performed so far? I heard you were a Kenya Re and Home Africa disciple... A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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S.Mutaga III wrote:guru267 wrote:these picks will give one 50% gains at best... I'm looking for more from my portfolio! Which were your options and how have they performed so far? I heard you were a Kenya Re and Home Africa disciple... And did you hear about my dear Unga bought at 18bob... or my sweet C&G I bought at 28 pre bonus?? Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 3/26/2012 Posts: 830
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guru267 wrote:S.Mutaga III wrote:guru267 wrote:these picks will give one 50% gains at best... I'm looking for more from my portfolio! Which were your options and how have they performed so far? I heard you were a Kenya Re and Home Africa disciple... And did you hear about my dear Unga bought at 18bob... or my sweet C&G I bought at 28 pre bonus?? I wish I had the wisdom to buy those ones. Are they still nice buys? A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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S.Mutaga III wrote:I am happy to have outperformed the nse 20 share index. A good way to accumulate money to invest in real estate. On January, I asked my banker to loan me some cash for a real estate project, but I failed to qualify. my objective is to make a conservative 30% gain by end of the year from CFC Insurance and Longhorn and have enough capital for the project.
Happy Hunting Wazuans congrats n all the best in your new picks. I'm now eying energy stocks but I guess those will require longer timeframes before I cash out.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@smutaga. congrats on your achievements so far. how have you determined that longhorn and liberty are undervalued. are you working with any net asset value figures? The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 3/26/2012 Posts: 830
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Aguytrying wrote:@smutaga. congrats on your achievements so far.
how have you determined that longhorn and liberty are undervalued. are you working with any net asset value figures? My valuation method is purely on P/E because they both have single digit P/E's. I would not use the NAV to value securities that are not distressed. NAV to me only makes sense when valuing distressed securities such as Mumias because they have a high chance of liquidation and hence you would like to know what you will get in case of such an event. For a security that is not in distress, I use P/E because all I care about is the return on investment I expect from the security, not the assets the company has. Some companies have very expensive assets but post meager profits, and therefore using the NAV could be very misleading. Those are my two Ugandan Shillings though, am not an expert in these things. A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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S.Mutaga III wrote:Aguytrying wrote:@smutaga. congrats on your achievements so far.
how have you determined that longhorn and liberty are undervalued. are you working with any net asset value figures? My valuation method is purely on P/E because they both have single digit P/E's. I would not use the NAV to value securities that are not distressed. NAV to me only makes sense when valuing distressed securities such as Mumias because they have a high chance of liquidation and hence you would like to know what you will get in case of such an event. For a security that is not in distress, I use P/E because all I care about is the return on investment I expect from the security, not the assets the company has. Some companies have very expensive assets but post meager profits, and therefore using the NAV could be very misleading. Those are my two Ugandan Shillings though, am not an expert in these things. Congrats @SM for the excellent return. Can't comment on the valuation of LH but the company simply doesn't excite me... A company that prints books in this digital age, i am not very optimistic on its longterm. Pan Africa, CFC and HF i belief have good prospects. Selling these and putting the money in LH to me looks like a Zero-sum game. If i were you i would hold cash and wait for discounts on the bluechips, my 2 zim dollars. Life is short. Live passionately.
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