The whole market tanked in 2015, but Britam's particularly massive plunge was caused by the market's reaction to an external event that had no effect on the company's business or future prospects (i.e. a major shareholder's activities outside the company). In my opinion, the market's reaction to something immaterial created a mispricing.

The rules and principles of accounting further exacerbated this mispricing. Conservatism is an accounting convention which requires an immediate recognition of losses (e.g., impairment charges) but delayed recognition of profits; losses are often recognised when anticipated, while profits are recognised when earned.

In Britam's case, the fair value investment losses reported are misleading. They were not paper losses attributable to bad management of an investment portfolio, they were primarily attributable to two strategic investments (i.e. Equity and HF). There are a lot of reasons why these two relationships, regardless of short term price movements, are good for the future earning potential of the company. Even setting that aside, the management has said they recognise their over exposure to listed equities and have said they are diversifying their portfolio. Good.

So that's the first bit. The second bit is that Britam's IT investment over the past few years (if the annual reports and investor briefings are to be believed) have been massive and directed specifically at making their core business more efficient and, therefore, profitable. It appears to be working. The company's core business looked good in the latest numbers. You couple that with their expansion across the region and into Southern Africa (e.g. Malawi) and things really start looking good. Just look at the numbers.

Finally, Britam is too small to attract any real overseas institutional investor interest so price is more subject to the moods, whims, and speculation of little guys who get overexcited and then panic without doing any analysis. In the end, I think Britam is a very good investment. But if you are looking to jump in and jump out, timing the market perfectly, good luck to you! It's not for me. I am holding this stock until it become overvalued which, given current numbers, is a very long way off.

It is a volatile investment, not a bad one. All insurance companies, globally, rise and fall with the performance of their investments. Britam is no exception.

What I am arguing is that in Britam's case they have two big listed equity investments that serve a broader purpose than capital gain and dividend income. They are strategic and, presumably, long term investments (e.g. provide sales channels, etc.). As a result, a drop in their share prices (along with the rest of the market), although making a big difference on paper in the short term, makes no difference in the long term. Do you think Equity Bank, for example, has no future?

The stock's success in the short term and the company's success in the long term (and therefore, ultimately, the stock's) are two different things. The insurance industry is going to see consolidation, just like the banking industry. Britam's core insurance business looks very good and the company is well positioned to take advantage of consolidation. Given the Rawat nonsense and the unique nature of their balance sheet, they are underpriced.

To your second point, I also think Jubilee is undervalued but only by about 15% from a fair value price. Kenre is a great company and has undoubtedly been a good investment for people who bought when it was undervalued, but I think it is fairly valued at its current price.

Britam had/has the edge for me because, as a result of the Rawat issue, its price became hugely undervalued. In short, much more room to run up than the others. So far, having purchased at an average cost of 10.75, I have been exactly right. As I said previously in this thread, it will be fairly valued at around 18 which is what I am confident it will hit this year.

Even when it hits 18, I will probably hold it (unless I find something with even more potential and need some capital). This gets to your first point. I believe the company's core insurance business is very strong with excellent prospects. They need to do some restructuring work on their investment portfolio to smooth out some of the volatility, but this is relatively easy to do, particularly when the management acknowledges the need and pledges to do so. I am confident they have the ability to execute.

Confident in my methodology and models, but you are welcome to your opinion. What is your intrinsic value on KNRE and JUB?

What does the BRIT cartoon say? Moving average EMA 100 and WMA 100 gauges have rejected the bulls resulting in a bearish weekly pin-bar candlestick. Target SMA 20 at 12.45. The 61.8% fibo rebound rally from the 10 handle was on vapour volume. Still remains a golden handcuff play until I see accumulative supportive volume plays. Let's see if the 10 handle will stall the expected bear pressure strength.

These cartoons are useless. To quote Warren Buffett, "I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."

I really don't want to see them,they made me miss britam at 10.90,i could have bought and sold at 16.50 now I could be praying to board it for a second ride

http://www.businessdaily...1/-/20edrb/-/index.html


Things have started falling apart! The above story paints shocking revelations about how Britam is run like a personal property. It is very terrible!!!
@hisah last week warned that a sharp plunge is likely if bad news hits this stock. Clearly, it has come to pass!

@ Spikes, before the fall, I said I visited my Broker who told me there have been massive sale order to reap on capital gain, nothing more truth than that. These were Makangas alighting at their base and the Conduct realized the real customers were few.There will be price correction as some orders have been cancelled after the dunk.