Tuesday, August 15, 2006

East African Cables: Irrational Exuberance?

Is EAC hitting 571 KES a case of Irrational Exuberance or is this price reflective of the true value of the company. EAC have been doing well in the region. I thought when the share price hit 300 the other day, that it'd finally level out, but it seems that I was wrong. But this is the NSE and most decisions seem to me to be emotional rather than logical choices..

So, on that emotional thought line, I wonder which is the next stock to 'go the EAC way'.

My picks

KenGen (after a while)
Sameer (yes this is rather radical)


coldtusker said...

Sameer? U gotta explain! Please leave comments on my blog where I argue the merits of Merali vs Aga Khan firms!

If we had a Greenspan... that's what he would call the EA Cables price... Let those who get burnt get burnt... coz at some point you have to know when to walk away...

Oh, the Kenny Rogers song is so appropriate!

bankelele said...

I'd go with Equity with a share split within one year.

also supposed "insider trading" investigation will be done on Cables - we'll see how far that goes.

Tito said...

Beware of the NSE stock market.

This market is still along way off. it is so full of speculators and that is why you see such vlatility in the stock markets. take Equity. starts at 100 bob, goes to 168 now at 120. all in less than a week. that is why the market needs to be information driven.

most stocks are over valued. see uchumi was valued at 14.5 yet its true value is probably less than a bob. same thing is happenign all over. but it does not mean that we cant make money out of it.

until it stabilizes to be a mature market.... take care.

mwasjd said...

Must agree, the hype thing is making stock prices go crazy. Though I'm in agreement with coldtusker on Sameer. The P/E always stays high, but while it was affected by high petroleum and commodity prices, EAC was smooth sailing. Explain that??

Jakarumba said...

Alpha, please dissect Sameer, It may make me take a hold position. The priice has been dipping by the day.

The Alpha Quadrant said...

i think it's long term. More when I get time to sit down

The Alpha Quadrant said...

I also guess I should have added KPLC to the list if I knew that the tarrif agreement with KenGen would hold. But it's hit 200 (195 today).

Sameer: I think has growth potential. Possibly, it's trading at approximately it's true value (p/e 20.14). Cross listing across the three EA countries, we all know cars/vehicles need tires.. and their capital injection seems to be more or less done.

I'm no expert on this.. but i usually don't speculate.

Hype definately is affecting stocks. Case in point EAC. (as well as the attempted Transcentury HFCK take over).

I guess time will tell..