Wazua
»
Investor
»
Stocks
»
fundamental investment
Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
|
and now to matters speculation... price is for most part a creature of human behavior.. when investors think the price will go up next week.. they will rush to buy now and infact prices will now go up this week!!! so... case in point... Mumias and Unga group...half year results were good.. "investors think" full year results will be gud too.. and assume it is only they who know this... considering themselves "smarter" than any one else.. they project..that good full year results will make everyone else believe mumias/unga are good to invest in and so this "everyone else" will decide to buy then... "smart investors" assume..this decision by "everyone else" to buy will spur demand for the share..hence increase the price.. so.. in their smartness.. they rush to buy now befor full year is over.. Tehehehehehe! eti smart investing. hence the small rally mumias had a month ago ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
Cowpoke wrote:@Mukiha, The way to analyse a company's fundamentals is by starting by analysing firm's financials, the quality and utilisation of the firm's assets, liabilities, and equity using the various ratios.... How do you tell good quality assets from bad ones? And how do you analyse "utilisation of the firm's assets, liabilities"? Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
|
mukiha wrote:Cowpoke wrote:@Mukiha, The way to analyse a company's fundamentals is by starting by analysing firm's financials, the quality and utilisation of the firm's assets, liabilities, and equity using the various ratios.... How do you tell good quality assets from bad ones? And how do you analyse "utilisation of the firm's assets, liabilities"? @mukiha!! BRAVO!!!!!  you really know how to rouse our thinking!! i'd be honored to converse with you in a different forum.. contacts? I'm impressed. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
|
|
|
Rank: Veteran Joined: 7/24/2008 Posts: 781
|
@mukiha, ROIC will do. But mostly I like using Ben Fishers methodology,putting more emphasis on good management and research rather than just using figures and ratios. The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
|
|
|
Rank: New-farer Joined: 12/31/2009 Posts: 43 Location: Tundra
|
mukiha wrote:Cowpoke wrote:@Mukiha, The way to analyse a company's fundamentals is by starting by analysing firm's financials, the quality and utilisation of the firm's assets, liabilities, and equity using the various ratios.... How do you tell good quality assets from bad ones? And how do you analyse "utilisation of the firm's assets, liabilities"? Take KQ. What is the average age of their aircraft? What is the average age of the aircraft in their industry, especially within africa? As far as utilization, what is the average trip of the planes compared to their peers? This is one way. You have still not answered my question from hapo juu...
|
|
|
Rank: New-farer Joined: 12/31/2009 Posts: 43 Location: Tundra
|
sheep wrote:@mukiha,
ROIC will do.
But mostly I like using Ben Fishers methodology,putting more emphasis on good management and research rather than just using figures and ratios.
I concure on ROIC. I think it's a fallacy if anyone thinks they can arrive to the value of a stock without looking at the financials.
|
|
|
Rank: Elder Joined: 6/27/2008 Posts: 4,114
|
sheep wrote:@mukiha,
ROIC will do.
What value of Return on invested capital (ROIC) do you consider the threshold? I.e., the go / no-go point? Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
|
|
|
Rank: Veteran Joined: 1/7/2010 Posts: 1,279 Location: nbi
|
Mukiha-I know your questions are rhetorical but will answer it anyway. Your ROIC must be higher than the return you'd get from a risk-free investment (e.g. t-bill or saving account) plus a risk-related premium. That is, if you can get 10% interest rate on a t-bill per year, the return you get from buying a share must be 10% + an additional gain to reflect your perception of a share's risk... After all the transaction charges of course The Governor of Nyeri - 2017
|
|
|
Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi
|
I assume the Financials are accurate (not rigged or manipulated) ROE as well as ROIC & ROA... all are important Financials are important... esp Balance Sheet which shows the 'strength' of the firms... In many cases, the ROA may be low (eg KPLC & KenGen) but the nature of the industry has to be considered... For utilities the low ROA is 'acceptable' since they can leverage their Balance Sheets... P/E is tricky coz historical P/E is just that... HISTORY... Forward P/E is full of assumptions... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
|
|
|
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
|
value=(earnings+dividend yield)/PBV...a reading of above 10 is a buy...then PSR to compare industry peers...then ROA +ROE...
|
|
|
Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi
|
@thedeal - MANAGEMENT is the first thing Warren Buffett looks at... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
|
|
|
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
|
@ vvs true that...now lets look at equity vs kcb...both led by hot shot c.e.o's...equity according to my formula above is=13.79=buy where as kcb=6.5=sell...my formula disregards the price since its set by many factors i.e emotions and speculation...
|
|
|
Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
|
ProverB, what those people are doing is certainly not smart investing. I believe that smart investing is actually seeing opportunities WAY BEFORE others see it. e.g let me use your Mumias example. Buying after the 1st half results was not "smart investing". Those who bought at below 7 bob were indeed the smart investors. They did not wait for the results. They knew that Mumias had value and that new revenue which was not there before was being added into its income stream (i.e the Co-generation plant) Another example I can use is PETROCHINA which Buffett bought and sold for a profit of 3.5 billion dollars. You have to love this dude. Buffett said: “In 2002 and 2003 Berkshire bought 1.3% of PetroChina for $488 million, a price that valued the entire business at about $37 billion. Charlie [Munger] and I then felt that the company was worth about $100 billion. By 2007, two factors had materially increased its value: the price of oil had climbed significantly, and PetroChina’s management had done a great job in building oil and gas reserves. In the second half of last year, the market value of the company rose to $275 billion, about what we thought it was worth compared to other giant oil companies. So we sold our holdings for $4 billion" GOD BLESS YOUR LIFE
|
|
|
Rank: Elder Joined: 6/23/2009 Posts: 13,551 Location: nairobi
|
interesting read.. management comes before all else. if management cannot be trusted then do not attempt to purchase at whatever price. after mgt, I look at PE, EPS & dividend yield. However, sometimes I roll the dice and try to pick the bottom based on future projected gains
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
|
|
|
Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi
|
obiero wrote:interesting read.. management comes before all else. if management cannot be trusted then do not attempt to purchase at whatever price. after mgt, I look at PE, EPS & dividend yield. However, sometimes I roll the dice and try to pick the bottom based on future projected gains Your buddy Alex Mbugua is still the CFO. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
|
|
|
Rank: Elder Joined: 6/23/2009 Posts: 13,551 Location: nairobi
|
VituVingiSana wrote:obiero wrote:interesting read.. management comes before all else. if management cannot be trusted then do not attempt to purchase at whatever price. after mgt, I look at PE, EPS & dividend yield. However, sometimes I roll the dice and try to pick the bottom based on future projected gains Your buddy Alex Mbugua is still the CFO. Iv just received a call and it is confirmed, he will be out soon, actually upon conclusion of the senate sitting..
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
|
|
|
Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi
|
obiero wrote:VituVingiSana wrote:obiero wrote:interesting read.. management comes before all else. if management cannot be trusted then do not attempt to purchase at whatever price. after mgt, I look at PE, EPS & dividend yield. However, sometimes I roll the dice and try to pick the bottom based on future projected gains Your buddy Alex Mbugua is still the CFO. Iv just received a call and it is confirmed, he will be out soon, actually upon conclusion of the senate sitting.. You must be devastated. And I like this photo. http://www.businessdaily...4/-/duuvntz/-/index.htmlGreedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
|
|
|
Rank: Elder Joined: 6/23/2009 Posts: 13,551 Location: nairobi
|
COOP, EQTY, KCB, PANAFRIC.. Fundamentally sound and ripe for purchase at current prices
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
|
|
|
Rank: User Joined: 1/20/2014 Posts: 3,528
|
obiero wrote:COOP, EQTY, KCB, PANAFRIC.. Fundamentally sound and ripe for purchase at current prices COOP ~ 18 EQTY ~ 32 KCB ~ <45 PANAFRIC --- never been on my rader! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
|
|
|
Rank: Elder Joined: 6/23/2009 Posts: 13,551 Location: nairobi
|
Othelo wrote:obiero wrote:COOP, EQTY, KCB, PANAFRIC.. Fundamentally sound and ripe for purchase at current prices COOP ~ 18 EQTY ~ 32 KCB ~ <45 PANAFRIC --- never been on my rader! Equity may not reach your target purchase price
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
|
|
|
Wazua
»
Investor
»
Stocks
»
fundamental investment
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|