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stock picking
guru267
#21 Posted : Tuesday, February 23, 2010 9:18:20 AM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
stock.enigma wrote:
What of negative pe like KQ?



@stock.enigma finance 101.. negative p/e is not used when valuing stocks because it is meaningless... its just there to show you the amount of loss the company made..
Mark 12:29
Deuteronomy 4:16
Scubidu
#22 Posted : Tuesday, February 23, 2010 10:23:17 AM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
@guru267. What are the recommended ways of valuing negative PE stocks and agriculturals?
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
guru267
#23 Posted : Tuesday, February 23, 2010 11:38:04 AM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@scubidu..i have no comment on agriculturals because i must admit they are extremely hard to value....

but for stocks with negative p/e one just needs to look at the company first and find out its previous profitability, the nature and cause of the loss, the management structure/activities,the number of years it has been in profit/loss and cashflows/reserves...

after all that then the best way to value a negative p/e stock is to use the Net Asset Value per share...


Mark 12:29
Deuteronomy 4:16
Chaka
#24 Posted : Tuesday, February 23, 2010 11:54:05 AM
Rank: Elder


Joined: 2/16/2007
Posts: 2,114
Can someone explain to me what determines the number of shares a company issues or is worth?
guru267
#25 Posted : Tuesday, February 23, 2010 12:23:49 PM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@chaka... i hope you know shres are issued when the compnany is being set up and not when its listed on the stock exchange so it all depends on the directors and the price is also determined by the directors depending on how much capital they want to raise
Mark 12:29
Deuteronomy 4:16
VituVingiSana
#26 Posted : Wednesday, February 24, 2010 3:30:57 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,801
Location: Nairobi
Buying agricultural stocks is similar to buying real estate...

The cash returns (dividends/rent) are 4-6% but the gains come in when the farms are sold...

Real estate (well, not the slums!) needs constant care. You get rents but then have repairs, taxes & vacancies...

Agriculture stocks have the same problems & opportunities... Good rains, high commodity prices, etc make more good 'returns' but often ploughed back in for new fences, new plantings, new machinery...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mkonomtupu
#27 Posted : Wednesday, February 24, 2010 7:59:50 AM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,001
Location: River Road
Anyone know what is happening in Rea Vipingo? The price has been going up the last few days.
VituVingiSana
#28 Posted : Wednesday, February 24, 2010 8:21:40 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,801
Location: Nairobi
Kuna kitu at Rea Vipingo... All of a sudden there is lots of demand... the price rise has been 17% in 2 days...

The year end is 30 Sep so I do not know what is driving the price unless someone knows something we do not...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mv_ufanisi
#29 Posted : Wednesday, February 24, 2010 8:36:49 AM
Rank: Member


Joined: 1/15/2010
Posts: 625
@VituVingiSana
Your eyes are all over the market searching for bargains.
VituVingiSana
#30 Posted : Wednesday, February 24, 2010 8:58:04 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,801
Location: Nairobi
mv_ufanisi wrote:
@VituVingiSana
Your eyes are all over the market searching for bargains.

Isn't that what all of us should be doing?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mkonomtupu
#31 Posted : Wednesday, February 24, 2010 9:50:56 AM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,001
Location: River Road
Looks like a stampede on agricultural stocks must be foreign buyers. Reaviping, Kakuzi and Sasini. I have never quite understood accounting for biological assets so i wont look for bargains here.
sparkly
#32 Posted : Thursday, February 25, 2010 9:58:07 AM
Rank: Elder


Joined: 9/23/2009
Posts: 8,066
Location: Enk are Nyirobi
mkonomtupu wrote:
Anyone know what is happening in Rea Vipingo? The price has been going up the last few days.
its expected. Remember the market is still recovering from last year's lows. Recovery started with the bluechips then the medium caps. The market has recognised that bargains now exist on some medium caps and the small caps. No surprise really..
Life is short. Live passionately.
selah
#33 Posted : Thursday, February 25, 2010 12:28:45 PM
Rank: Elder


Joined: 10/13/2009
Posts: 1,950
Location: in kenya
Chaka wrote:
Can someone explain to me what determines the number of shares a company issues or is worth?


From the little accounting I know:

Assets= Capital + Liabilities

there4

Capital = Assets - liabilities.

capital is the worth of the owners in a given company hence A company may take a percentage of this equity and sell at a premium.

e.g co-orperative bank sold 25% of its share capital per book value of 1/= @ 9.50/=

Please any errors are regretable.
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
VituVingiSana
#34 Posted : Thursday, February 25, 2010 12:34:42 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,801
Location: Nairobi
@selah: You are right BUT please note that the concept of 'par value' is outdated in our capital markets...

Anyway, the par value (e.g. 1/- for coop) has little correlation with NAV/share...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mkonomtupu
#35 Posted : Thursday, February 25, 2010 12:35:10 PM
Rank: Veteran


Joined: 2/10/2010
Posts: 1,001
Location: River Road
sparkly wrote:
mkonomtupu wrote:
Anyone know what is happening in Rea Vipingo? The price has been going up the last few days.
its expected. Remember the market is still recovering from last year's lows. Recovery started with the bluechips then the medium caps. The market has recognised that bargains now exist on some medium caps and the small caps. No surprise really..

I will accept that. Agric. stocks are not my cup of tea. I read the sasini annual report nothing substantial from the MD. I will watch for trends.
selah
#36 Posted : Thursday, February 25, 2010 12:58:24 PM
Rank: Elder


Joined: 10/13/2009
Posts: 1,950
Location: in kenya
VituVingiSana wrote:


Anyway, the par value (e.g. 1/- for coop) has little correlation with NAV/share...


please enlighten me on NAV/share.Thanks
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
guru267
#37 Posted : Thursday, February 25, 2010 1:13:54 PM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
selah wrote:
please enlighten me on NAV/share.Thanks



@selah NAV/share is simple..

total assets - (total liabilities + goodwill) then you divide by the number of shares
Mark 12:29
Deuteronomy 4:16
selah
#38 Posted : Friday, February 26, 2010 11:39:06 AM
Rank: Elder


Joined: 10/13/2009
Posts: 1,950
Location: in kenya
guru267 wrote:
[quote= NAV/share is simple..

total assets - (total liabilities + goodwill) then you divide by the number of shares


Now how do you quantify goodwill
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
obiero
#39 Posted : Saturday, June 18, 2022 4:21:24 PM
Rank: Elder


Joined: 6/23/2009
Posts: 13,125
Location: nairobi
guru267 wrote:
Scubidu wrote:
@guru267. what's the significance of 8times p/e and why doesn't it apply to agriculturals?


@scubidu i say 8 times because a p/e of 8 and below is considered cheap by most analysts and there is huge chance for price increase if there is profit growth..
it doesnt work for agriculturals as these stocks tend to have low p/e due to extremely volatile earnings and lack of interest/demand by investors...

PE really helps, especially when consideration is done per industry.. I'm a lover of high PE stocks with current low stock prices, which could mean that investors are expecting high growth rates in the future

COOP 5,500 ABP12.6; HF 261,000 ABP 3.49; KCB 7,500 ABP 36; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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