Wazua
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Time to play the Market......2024
Rank: Member Joined: 9/26/2006 Posts: 463 Location: CENTRAL PROVINCE
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Its been a while (about a decade...how time flies!!!) since i took to playing the market. For the newbies, you can check some of the plays below: In 2010: http://m.wazua.co.ke/for...aspx?g=posts&t=5551
In 2011: http://wazua.co.ke/forum.aspx?g=posts&t=10373
In 2012: http://www.wazua.co.ke/f...sts&t=16435&p=3
In 2013: http://www.wazua.co.ke/f...spx?g=posts&t=21940
In 2014: http://www.wazua.co.ke/f...spx?g=posts&t=27288
Those were great years with eye popping and market beating returns. When the Hague duo took over, i warned many that the Kibaki economic era was about to be replaced by market stagnation and depression which sadly did happen. I moved out of the market and pursued my professional interest but lately, after examining the market, am shocked by some of the prices to book value (PBV) and price per earnings (P/E) at the NSE. Its clearly a good time to buy for any value investor(hard to see things getting worse). Tommorrow will mark the start of Playing the Market, 2024. As usual, i will pick a stock and highlight why i think its the strongest buy based on a careful analysis. Happy Hunting. x handle: @stocksmaster79
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Rank: Veteran Joined: 12/11/2006 Posts: 930
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My heaviest bags right now are Safcom, Kcb and Equity “Invest in yourself. Your career is the engine of your wealth.”
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Rank: Member Joined: 5/31/2011 Posts: 262
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Awesome. Looking forward to this You lose money chasing women, but you never lose women chasing money - NAS
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Rank: New-farer Joined: 8/21/2017 Posts: 54
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Welcome back Stocksmaster Life is a beach and I'm just playing in the sand
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Rank: Member Joined: 9/26/2006 Posts: 463 Location: CENTRAL PROVINCE
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First Play 2024: Diamond Trust BankKey Statistics:Price: Ksh 49.30 Book Value per share: Ksh 256.80 Price to book value:0.19 (Industry Mean is 0.7) P/E Ratio: 2.2 (Industry Mean is 3.5) Dividend yield: 10.1% (Industry average: 10.7%) Dividend pay out ratio (2022): 23.1% (Industry average: 40.3%) Trailing Return on Equity(As at Q3, 2023): 10.02% versus industry average of 18.8% Trailing Return on assets: 1.29% versus industry average of 2.6% Non Performing Loans at 12.43% versus Industry average of 15% Diamond Trust Bank is an undervalued sleeping giant trading at an incredibly low price to book value of below 0.2 (about ¼ of industry average). It is also trading at a P/E of about 2 which is almost half of the industry average. The undervaluation of the DTB share is partly due to its low return on assets and return on equity which is about half the industry average. The 2023 Q3 results however showed an improving picture on the two metrics which may signal the sleeping giant is starting to awaken. The Q3 results also showed that the NPL for Diamond Trust Bank was lower than industry average (12.43% versus 15%) indicating more prudent lending by the bank. Going forward and in anticipation of the 2023 Full Year Results, DTB can deliver above average results based on its Q3 results to a projected EPS of 25-28 for 2023. This would be just slightly lower than Stanbic Holdings (Ksh 30.75 for 2023 but trading at Ksh 119.50 showing just how undervalued the DTB share is suffering). The bank has had a conservative dividend pay out policy (about 21% in 2021 and 23% in 2022) but the DTB Chairman of the Board, Mr Linus Gitahi is quoted as stating that this dividend pay out will rise gradually as the bank balances between pay out and reinvestment into the business (the bank is investing in both branch expansion of 20 branches per year since 2022 and improving on its digital banking delivery). If the growth in pay out continues on the same trajectory, a dividend pay out ratio of 25% for 2023 can be projected. That projects to a possible dividend payment of Ksh 6.25 – 7.00 for 2023. Diamond Trust Bank can be both a short-term play with about 20-25% upside potential or a long term play as its ROA, ROE and Dividend Pay Out Ratio improves and starts approaching the market pricing of Stanbic Holdings. The expansion drive (40 branches in 2 years since 2022) and investment in technology is also anticipated to start bearing fruits from 2024 which may see sizeable growth in the bottom line. Happy Hunting x handle: @stocksmaster79
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Rank: New-farer Joined: 8/21/2017 Posts: 54
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Surprised that there isn't much action on this thread! Life is a beach and I'm just playing in the sand
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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stocksmaster wrote:First Play 2024: Diamond Trust BankKey Statistics:Price: Ksh 49.30 Book Value per share: Ksh 256.80 Price to book value:0.19 (Industry Mean is 0.7) P/E Ratio: 2.2 (Industry Mean is 3.5) Dividend yield: 10.1% (Industry average: 10.7%) Dividend pay out ratio (2022): 23.1% (Industry average: 40.3%) Trailing Return on Equity(As at Q3, 2023): 10.02% versus industry average of 18.8% Trailing Return on assets: 1.29% versus industry average of 2.6% Non Performing Loans at 12.43% versus Industry average of 15% Diamond Trust Bank is an undervalued sleeping giant trading at an incredibly low price to book value of below 0.2 (about ¼ of industry average). It is also trading at a P/E of about 2 which is almost half of the industry average. The undervaluation of the DTB share is partly due to its low return on assets and return on equity which is about half the industry average. The 2023 Q3 results however showed an improving picture on the two metrics which may signal the sleeping giant is starting to awaken. The Q3 results also showed that the NPL for Diamond Trust Bank was lower than industry average (12.43% versus 15%) indicating more prudent lending by the bank. Going forward and in anticipation of the 2023 Full Year Results, DTB can deliver above average results based on its Q3 results to a projected EPS of 25-28 for 2023. This would be just slightly lower than Stanbic Holdings (Ksh 30.75 for 2023 but trading at Ksh 119.50 showing just how undervalued the DTB share is suffering). The bank has had a conservative dividend pay out policy (about 21% in 2021 and 23% in 2022) but the DTB Chairman of the Board, Mr Linus Gitahi is quoted as stating that this dividend pay out will rise gradually as the bank balances between pay out and reinvestment into the business (the bank is investing in both branch expansion of 20 branches per year since 2022 and improving on its digital banking delivery). If the growth in pay out continues on the same trajectory, a dividend pay out ratio of 25% for 2023 can be projected. That projects to a possible dividend payment of Ksh 6.25 – 7.00 for 2023. Diamond Trust Bank can be both a short-term play with about 20-25% upside potential or a long term play as its ROA, ROE and Dividend Pay Out Ratio improves and starts approaching the market pricing of Stanbic Holdings. The expansion drive (40 branches in 2 years since 2022) and investment in technology is also anticipated to start bearing fruits from 2024 which may see sizeable growth in the bottom line. Happy Hunting Good call. I have held onto this one for a while. I added a few at 45-50 but not enough to make a huge difference to my ABP. DTB has a very low DPR (23%) but there is pressure on them to increase it. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/26/2006 Posts: 463 Location: CENTRAL PROVINCE
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VituVingiSana wrote:stocksmaster wrote:First Play 2024: Diamond Trust BankKey Statistics:Price: Ksh 49.30 Book Value per share: Ksh 256.80 Price to book value:0.19 (Industry Mean is 0.7) P/E Ratio: 2.2 (Industry Mean is 3.5) Dividend yield: 10.1% (Industry average: 10.7%) Dividend pay out ratio (2022): 23.1% (Industry average: 40.3%) Trailing Return on Equity(As at Q3, 2023): 10.02% versus industry average of 18.8% Trailing Return on assets: 1.29% versus industry average of 2.6% Non Performing Loans at 12.43% versus Industry average of 15% Diamond Trust Bank is an undervalued sleeping giant trading at an incredibly low price to book value of below 0.2 (about ¼ of industry average). It is also trading at a P/E of about 2 which is almost half of the industry average. The undervaluation of the DTB share is partly due to its low return on assets and return on equity which is about half the industry average. The 2023 Q3 results however showed an improving picture on the two metrics which may signal the sleeping giant is starting to awaken. The Q3 results also showed that the NPL for Diamond Trust Bank was lower than industry average (12.43% versus 15%) indicating more prudent lending by the bank. Going forward and in anticipation of the 2023 Full Year Results, DTB can deliver above average results based on its Q3 results to a projected EPS of 25-28 for 2023. This would be just slightly lower than Stanbic Holdings (Ksh 30.75 for 2023 but trading at Ksh 119.50 showing just how undervalued the DTB share is suffering). The bank has had a conservative dividend pay out policy (about 21% in 2021 and 23% in 2022) but the DTB Chairman of the Board, Mr Linus Gitahi is quoted as stating that this dividend pay out will rise gradually as the bank balances between pay out and reinvestment into the business (the bank is investing in both branch expansion of 20 branches per year since 2022 and improving on its digital banking delivery). If the growth in pay out continues on the same trajectory, a dividend pay out ratio of 25% for 2023 can be projected. That projects to a possible dividend payment of Ksh 6.25 – 7.00 for 2023. Diamond Trust Bank can be both a short-term play with about 20-25% upside potential or a long term play as its ROA, ROE and Dividend Pay Out Ratio improves and starts approaching the market pricing of Stanbic Holdings. The expansion drive (40 branches in 2 years since 2022) and investment in technology is also anticipated to start bearing fruits from 2024 which may see sizeable growth in the bottom line. Happy Hunting Good call. I have held onto this one for a while. I added a few at 45-50 but not enough to make a huge difference to my ABP. DTB has a very low DPR (23%) but there is pressure on them to increase it. With the GoK pushing for lower interest rates and largest global asset management fund choosing Kenya as one of its new sink for investment funds, the NSE Indexes have to recalibrate upwards.....my estimate is the NSE is trading on average at 60% of its fair value while DTB is at less than 50% of its fair value. It has a growth momentum on its side as it opens about 30 branches by end of 2024 (target of 100 branches by end of 2024). If it can improve on its poor RoE and RoA compared to industry average then it can easily double it's profitability (EPS of >KSH 50) within the next 4 years in the long term. Short term, the upward ticking PEs for all banks will also propel it upwards to at least a conservative P/E of 3 or PBV of 0.4 which means at least a 50% short term upside potential (depending on the 2023 EPS, DPS and dividend pay out ratio (I expect about 25-30% pay out ratio). Happy Hunting x handle: @stocksmaster79
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Rank: Elder Joined: 7/22/2009 Posts: 7,836
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stocksmaster wrote:First Play 2024: Diamond Trust BankKey Statistics:Price: Ksh 49.30 Book Value per share: Ksh 256.80 Price to book value:0.19 (Industry Mean is 0.7) P/E Ratio: 2.2 (Industry Mean is 3.5) Dividend yield: 10.1% (Industry average: 10.7%) Dividend pay out ratio (2022): 23.1% (Industry average: 40.3%) Trailing Return on Equity(As at Q3, 2023): 10.02% versus industry average of 18.8% Trailing Return on assets: 1.29% versus industry average of 2.6% Non Performing Loans at 12.43% versus Industry average of 15% Diamond Trust Bank is an undervalued sleeping giant trading at an incredibly low price to book value of below 0.2 (about ¼ of industry average). It is also trading at a P/E of about 2 which is almost half of the industry average. The undervaluation of the DTB share is partly due to its low return on assets and return on equity which is about half the industry average. The 2023 Q3 results however showed an improving picture on the two metrics which may signal the sleeping giant is starting to awaken. The Q3 results also showed that the NPL for Diamond Trust Bank was lower than industry average (12.43% versus 15%) indicating more prudent lending by the bank. Going forward and in anticipation of the 2023 Full Year Results, DTB can deliver above average results based on its Q3 results to a projected EPS of 25-28 for 2023. This would be just slightly lower than Stanbic Holdings (Ksh 30.75 for 2023 but trading at Ksh 119.50 showing just how undervalued the DTB share is suffering). The bank has had a conservative dividend pay out policy (about 21% in 2021 and 23% in 2022) but the DTB Chairman of the Board, Mr Linus Gitahi is quoted as stating that this dividend pay out will rise gradually as the bank balances between pay out and reinvestment into the business (the bank is investing in both branch expansion of 20 branches per year since 2022 and improving on its digital banking delivery). If the growth in pay out continues on the same trajectory, a dividend pay out ratio of 25% for 2023 can be projected. That projects to a possible dividend payment of Ksh 6.25 – 7.00 for 2023. Diamond Trust Bank can be both a short-term play with about 20-25% upside potential or a long term play as its ROA, ROE and Dividend Pay Out Ratio improves and starts approaching the market pricing of Stanbic Holdings. The expansion drive (40 branches in 2 years since 2022) and investment in technology is also anticipated to start bearing fruits from 2024 which may see sizeable growth in the bottom line. Happy Hunting On steroids today!!! Streets are clearly listening to you!!! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 9/26/2006 Posts: 463 Location: CENTRAL PROVINCE
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stocksmaster wrote:VituVingiSana wrote:stocksmaster wrote:First Play 2024: Diamond Trust BankKey Statistics:Price: Ksh 49.30 Book Value per share: Ksh 256.80 Price to book value:0.19 (Industry Mean is 0.7) P/E Ratio: 2.2 (Industry Mean is 3.5) Dividend yield: 10.1% (Industry average: 10.7%) Dividend pay out ratio (2022): 23.1% (Industry average: 40.3%) Trailing Return on Equity(As at Q3, 2023): 10.02% versus industry average of 18.8% Trailing Return on assets: 1.29% versus industry average of 2.6% Non Performing Loans at 12.43% versus Industry average of 15% Diamond Trust Bank is an undervalued sleeping giant trading at an incredibly low price to book value of below 0.2 (about ¼ of industry average). It is also trading at a P/E of about 2 which is almost half of the industry average. The undervaluation of the DTB share is partly due to its low return on assets and return on equity which is about half the industry average. The 2023 Q3 results however showed an improving picture on the two metrics which may signal the sleeping giant is starting to awaken. The Q3 results also showed that the NPL for Diamond Trust Bank was lower than industry average (12.43% versus 15%) indicating more prudent lending by the bank. Going forward and in anticipation of the 2023 Full Year Results, DTB can deliver above average results based on its Q3 results to a projected EPS of 25-28 for 2023. This would be just slightly lower than Stanbic Holdings (Ksh 30.75 for 2023 but trading at Ksh 119.50 showing just how undervalued the DTB share is suffering). The bank has had a conservative dividend pay out policy (about 21% in 2021 and 23% in 2022) but the DTB Chairman of the Board, Mr Linus Gitahi is quoted as stating that this dividend pay out will rise gradually as the bank balances between pay out and reinvestment into the business (the bank is investing in both branch expansion of 20 branches per year since 2022 and improving on its digital banking delivery). If the growth in pay out continues on the same trajectory, a dividend pay out ratio of 25% for 2023 can be projected. That projects to a possible dividend payment of Ksh 6.25 – 7.00 for 2023. Diamond Trust Bank can be both a short-term play with about 20-25% upside potential or a long term play as its ROA, ROE and Dividend Pay Out Ratio improves and starts approaching the market pricing of Stanbic Holdings. The expansion drive (40 branches in 2 years since 2022) and investment in technology is also anticipated to start bearing fruits from 2024 which may see sizeable growth in the bottom line. Happy Hunting Good call. I have held onto this one for a while. I added a few at 45-50 but not enough to make a huge difference to my ABP. DTB has a very low DPR (23%) but there is pressure on them to increase it. With the GoK pushing for lower interest rates and largest global asset management fund choosing Kenya as one of its new sink for investment funds, the NSE Indexes have to recalibrate upwards.....my estimate is the NSE is trading on average at 60% of its fair value while DTB is at less than 50% of its fair value. It has a growth momentum on its side as it opens about 30 branches by end of 2024 (target of 100 branches by end of 2024). If it can improve on its poor RoE and RoA compared to industry average then it can easily double it's profitability (EPS of >KSH 50) within the next 4 years in the long term. Short term, the upward ticking PEs for all banks will also propel it upwards to at least a conservative P/E of 3 or PBV of 0.4 which means at least a 50% short term upside potential (depending on the 2023 EPS, DPS and dividend pay out ratio (I expect about 25-30% pay out ratio). Happy Hunting 2023 Results are in: EPS Ksh 24.6 (2022: Ksh 21.68) DPS Ksh 6.00 (2022: Ksh 5.00) Dividend pay out ratio: 24.4% (2022: 23.1%) The dividend per share is a good predictor of target short term price with the market seeming to price most shares currently at about 10 times current/total DPS (See CooP, Stanbic, ABSA).....that places short term DTB share price target at about Ksh 60. Happy Hunting x handle: @stocksmaster79
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Time to play the Market......2024
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