Sector PE stands at 20 but leave alone that i think this sector is the most volatile on the NSE and one i would caution an investor from going into with the world economy going sideways unless he knows what he is doing...Safcom went from 5 bob at the IPO in 2008 to 2.50 then 6.40 and now 5.60...so much volatility and a lot of people got burned in between...Scan group is only rising now...even though it was marked down by 6.5% this week...KQ the same from 140 in 2008 to 20 bob in 2009 rising only now to 56 bob...Access Kenya and Car and General all posted dissapointing end year results...only the Aga Khan firms stand out...

Conclusions:is this sector junk? or only buy when the economy is firing up??? ur take wazua...

@ guru true that...my biggest undoing is im to much exposed to this sector thru KQ and Safcom...i'm back to the drawing board...time to look at the laggards in the financials and industrial sector...LOL.

Nmg is my gem in this sector. Defensive and balances off volatility of safcom.

Ultimately, u have to buy value & good management...

It is not about Financials or specific sector... The stockmarket is sort of a Pyramid Scheme where you sell to the next guy for (hopefully) higher prices lakini it stops at some point!

I prefer buying 'value' regardless of past stock prices... I am buying a piece of a cash-generating business at a fair price today!

An Example: I expect KQ prices to fall but will I sell at 52? No... (The transaction costs are a killer if I want back in)

Why? Coz the dividend is low (2.4%) but I see substantial growth in cashflow over the next few years as Africa Rises. If I find a better investment I WILL dump KQ...

KPLC: Rains galore, full dams & increased econ growth (4%), 200,000 new connections per year, prepaid meters... I see cashflow. Plus a 5% dividend yield!

KenolKobil: 3.5% div yield. At AGM, CEO was upbeat about 2010. Higher than budgeted! Plus Africa (ex-Kenya) growth is amazing for them.

My point is... forget sectors... seek value...
BTW, the sector classifications are CRAP...

How is KK, an Oil Marketer, an Industrial?
Kenol buys crude/fuel, sell crude/fuel... Its like an Uchumi for fuel...

At most, Kenol has lube BLENDING plants!!!
KK is a TRADER not manufacturer or refiner or mining!

Same story for KPLC... It is a transmission & distributor... like Uchumi for electricity!!!! It does not generate 99% of what it sells...

Someone once said that the easiest way to become a millionaire is to start off as a billionaire and then purchase an airline. I truly believe in this and have always steered clear of KQ. The vagaries of this business are too many;
- Forex risk
- Fuel prices
- Debt overload
- Unionasable employees who frequently strike
- Stiff competition for international carriers etc etc

Even Buffet himself got his fingers burnt on airline stock. See caption below....

"The final business category is what Buffett calls the "gruesome" businesses. These are companies that require constant and significant investment and reward the investor with subpar returns. Where could such a lousy business exist? Look no further than the airlines. Buffett describes airlines' appetite for capital as "insatiable" and notes that the reward for all that capital investment has been a history of lousy -- and sometimes nonexistent -- earnings."