Current NSE Index position - 2,755
Market conditions: Overwhelmingly bearish
Strategy: Value Investing
Hypothetical starting capital: Ksh 1,000,000
Objective: 30% (To match the performance of the best NSE stocks of 2018 i.e Express and Unga @ 31% and 30% respectively)

1st Pick: LONGHORN PUBLISHERS

FY PBT 2016 = 139 million +43%
FY PBT 2017 = 179 million +28%
FY PBT 2018 = 273 million +53%

Current PE = 7

Current Price = 4.65

Dividend yield = 9%

Amount Allocated to Longhorn: Ksh 379,068

Number of shares = 80,000

4.65*80000= Ksh 372,000
0.019*372,000 = Ksh 7,068
372,000 + 7, 068 = 379,068

Cash in bank: Ksh 620,932

Commentary:
Longhorn Publishers is a small, high growth company. It has a single digit PE ratio, excellent dividend yield and impressive profit growth in the last three years. I am willing to bet that the company will continue to post good results in the foreseeable future. The company has diversified its products and geographical presence presenting more opportunities for accelerated growth. The chairman FT.Nyammo owns 5.88% of the company stock directly i.e about Ksh 75,000,000 at current stock price. He also owns a stake (not disclosed) in Pacific Futures and Options Limited, which owns 12.85% of the company i.e about Ksh 163,000,000 at current stock price. I like investing in companies where senior management have skin in the game. I see better growth prospects for the company in future because I believe that a company operating in over five countries should make a lot more than 273 million going forward. I will buy at 4.65 or lower.

I am still studying the market to hunt for more bargains and deploy the remaining (hypothetical) Ksh 620,932 capital.

#The Only Easy Day Was Yesterday

You must be new here. Anyway, all the best trying to catch that bottom :)

You ain't seen nuffin yet . Longhorn will be trading at 30 cents by Dec 2019. Ask those hopeless hope filled hopers who clung on to turbo nyani HAFR hoping upon hope it would zoom "soon" . I told them to run from that thing but they did not listen, now they are eating crow! My fren, SELL this thing or regret bitterly when dec 2019 arrives! The NSE bear run has not even started proper yet!

That risk can be diversified away or rather contained. That's why you don't invest all your capital in one stock.

I like.

Thanks for this analysis.

Any similar analysis of COOP?

I am waiting for KK's acquisition by Rubis to be completed. ASAP. Or at least selling off my KK whether or not Rubis manages a takeover.

I mostly prefer a company that offers dividends instead of bonus shares in an unpredictable fashion. Coop offers meager dividends and surprise bonus shares sometimes. That return is somewhat erratic for my liking. The PBT growth in the last 3 years wasn't attractive enough for me either. To me dividend stocks matter alot because in such a bear market, the yields are mouth watering. Since 2011 bear market, this is the first time we are seeing such high dividend yields which means that we are nearing the bottom. However, I am waiting patiently for KCB to reach attractive levels/dividend yields so that I can buy. This will be a good year for banks because the cap on interest rates for deposits was removed (meaning more profitability for banks).

1. Capital flight to emerging markets.
2. No capital flight to emerging markets. More discounts and longer time to accumulate at good prices.
Win-win.

Your target buying price is 4.65 and below.What will be your target selling price?