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chi20
#1 Posted : Tuesday, January 26, 2010 7:07:31 AM
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Joined: 10/24/2008
Posts: 223
we have waited for this counter for nearly four years now. the soonest it troops back to nse, possibly mid feb, i believe we will recoup, and possibly make a kill on our investment. the consistent growth year to year for the last two years and high expectations will help bouy the share from 14 to possibly 30 in less than six months.
my two cents.
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gathinga
#2 Posted : Tuesday, January 26, 2010 7:18:31 AM
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Not sure about this. The shares will be substantially diluted coz of entry of new capital converted from debenture. Am not sure how the debenture will be converted. Will it be ordinary sharecapital or will it be preference shares like KPLC. Its better for us old shareholders that it comes in as preference shares.

Uchumi is also facing significant challenges in their business from competoition (Nakumatt, Tuskers and all the rest) and they may not immediately win over investors till people start to see good results on their shop floors
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VituVingiSana
#3 Posted : Tuesday, January 26, 2010 10:24:00 AM
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Uchumi needs to revamp the stores so don't expect dividends for at least 2 years. The situation will be similar to NBK which hasn't paid dividends for years.

Many existing shareholders will sell just to bail out of Uchumi. The question is... who will buy?

Dilution will happen (ordinary or preference) since the existing Shareholders refused to step up to the plate in the past few years whenever Uchumi wanted to raise capital
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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the sage
#4 Posted : Tuesday, January 26, 2010 10:42:50 AM
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Joined: 11/20/2008
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@Chi20, I doubt, should the government convert debt into ordinary shares they will really dilute the company. I think that is the most probable action since converting its debt into preferrential shares is a loan by any other name.
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mukiha
#5 Posted : Tuesday, January 26, 2010 11:41:50 AM
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Joined: 6/27/2008
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Say I place a buy order with the brokers at 5 bob; will get sellers? May be....

My advise would be this; you've waited this long, you can wait longer. Don't sell at a loss.

In Jan 2006, NSE-20 was in the region of 4,200, today it is around 3,600....

If Uchumi had never been suspended, do you expect that it would have outperformed the rest of the market?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#6 Posted : Tuesday, January 26, 2010 12:03:35 PM
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IMHO... the price will drop to around 3/- but then rapidly rise... I think the 5/- number may not be off.

The CATCH is that you have to be patient... Most people are not...

As @mukiha said... if you have waited for 4 years (how long has it been?) then why not wait a little longer.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#7 Posted : Tuesday, January 26, 2010 12:05:45 PM
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Uchumi made 420mn in PAT through June 30 2009. Since the 'news' from Uchumi has been positive, more suppliers would be confident of supplying to Uchumi.

I hear that Uchumi pays faster than Nakumatt!!!

If Uchumi can pull in 500mn in 2009-10 (& similar performance in 2010-11) then it ca pay a dividend in 2012.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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muganda
#8 Posted : Friday, January 29, 2010 11:12:06 AM
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Joined: 9/15/2006
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(Bloomberg) -- Uchumi Supermarket Ltd. of Kenya shareholders voted to end the company’s receivership at a shareholders’ meeting in Nairobi today.

The company’s debenture wll be converted into shares of 10 shillings each, Receiver Manager Jonathan Ciano said at the meeting today.
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muganda
#9 Posted : Friday, January 29, 2010 11:18:29 AM
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Did anyone here get to attend the meeting? From what I gather online,
* There was a battle of water tycoon brands - shareholders plied with mt.kenyan of kimanirugendo and dasani of chriskirubi
* And even Uchumi has reached the level of digital annual reports on CD
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Kaffir
#10 Posted : Friday, January 29, 2010 3:59:45 PM
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Planned total shares of 262.5 million, up from 180m - a smaller increase in shares than i had expected. Their target of 500m earnings for the current year would therefore translate to a targeted EPS of about 1.9shs. Shs 19 as trading price seems feasible (translating to a PE of 10) in the short to medium term.
I dont really see a price under 10shs.
But, lets wait and see. This market has its surprises..
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2012
#11 Posted : Friday, January 29, 2010 4:39:40 PM
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Joined: 12/9/2009
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vvs. Who will buy?
If they retain Ciano as CEO I'll buy. It makes sense for the disgruntled Uchumi share holders to bail out as soon but they say every challenge is an opportunity. I think Uchumi is a gold mine for a serious long term investor especially with the confusion and financial challenges facing Nakumatt.

BBI will solve it :)
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VituVingiSana
#12 Posted : Friday, January 29, 2010 6:05:45 PM
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Is the 500mn projected for 2010-11 PAT or PBT?

In 2008-9, there was a 250mn tax credit (as part of the 420mn PAT) so the 'real' performance was not as good.

Well, an investor who is willing to buy a longer-term stake in Uchumi may be interested. Uchumi will need to raise more cash (debt or equity) to improve the stores, expand & increase the range of merchandise offered.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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guru267
#13 Posted : Monday, February 01, 2010 5:22:27 AM
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i do think this stocks price can go much lower than where it is since all those fatigued investors will try to get out after being trapped there for so long... i think i'll take a wait and see approach with tis one
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#14 Posted : Monday, February 01, 2010 8:18:38 AM
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@guru - The 14/- shown is 'fake' coz it was the last traded price before the crap hit the fan...

There are a lot of holes here... lakini for a strategic investor it makes sense to sweep them up cheap...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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guru267
#15 Posted : Monday, February 01, 2010 8:22:10 AM
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@VVS so what do you think is a cheap price when it comes back cos i dont have any info on this counter?
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#16 Posted : Monday, February 01, 2010 9:19:46 AM
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@guru - I have no idea what constitutes 'cheap' for Uchumi.
Do you have the latest results?

You could use PE... but the shares may be increased... so account for the dilution...

When I say 'cheap' by a strategic investor... it means they would do additional due diligence... thus have a better idea than we do...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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yekeyeke
#17 Posted : Monday, February 01, 2010 12:56:35 PM
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The conversion of debt to equity has been done at KES 10 a share. Deloitte valued the shares at KES 12 but the conversion process opted for KES 10 to give the people a KES 2 head start. It can thus be assumed that almost all investors will not accept to sell below KES 10, unless they are the type who did not feel the pain of waiting for close to 4 years. If anyone sell at below ten then it will only be too sad.
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VituVingiSana
#18 Posted : Monday, February 01, 2010 1:26:44 PM
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Asante... I expect many will sell at 10 or below 10...
10/- in hand is worth 20/- in the future...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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2012
#19 Posted : Monday, February 01, 2010 1:46:08 PM
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Joined: 12/9/2009
Posts: 6,592
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I'll wait for Uchumi at between 5/- and 6.40/- I'm sure there are many disgruntled, dejected, unforgiving investors just waiting to dump it.

BBI will solve it :)
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mukiha
#20 Posted : Monday, February 01, 2010 2:30:12 PM
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They are not desperate to sell. They had not taken loans like their SCOM friends.

There will probably be a shortage of supply. So may be, just may be, we might be looking at another "Carbacid" return...
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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