hello everyone my name is ronson thank
you so much for watching my channel
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stock market and also talk about
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today i'm going to be talking about yet
another company that has left many
investors talking because of its
price larry even without actually
pandemic the price
never went down it kept increasing and
up to now so many of us are wondering
what could be the cause of the price
slurry what could be
the cause of the price increase and some
of us are asking
should we be black or we should be
sailing so today
i'm going to be talking that about that
company and that company is safaricom
limited this is a kenyan company it's a
telecom
company so this is the the company that
i'm going to be talking about
this correct i'm going to be talking
about the brief introduction about it
i'm also going to be going through its
financials
and also the fundamentals to check why
the price could be increasing
and also finally i'm going to be giving
out
my view why the price is increasing
and also giving my view on whether i'm
going to be buying it
or serving it so let us
start
so as i said i'm going to be going
through into
as we said i'm going to go directly into
its brief introduction what it does and
what
what the company does and also the
products then i will go
to the financials
so let's briefly talk about uh safari
home
yeah safari como plc is a listed uh
kenyan mobile network operator
headquartered at safaricom house
in nairobi kenya it is the largest
telecommunication provider
in kenya and one of the most profit
profitable companies in east and central
africa region
so the services of this company it's
listed here
the company offers mobile telephony
mobile money transfer consumer
electronics
e-commerce cloud computing data
music streaming and fiber optics
it is mostly known as the home of
m-pesa a mobile money banking sms
based service so basically these are the
the services that provides another one
is safaricom controls approximately 63.5
percent of the kenyan market
as at 30 june
2018 safaricom had a subscriber base
estimated at approximately 33.3
33.1 million so basically this one it
says
it is the largest telecommunication
company
with the coverage of 60
a 3.5 so this is one of the companies
that direct
only because as you see it has
the what you call a mod or a competitive
advantage since it has
more than 60 percent of the market share
so
basically this is what you need to know
about it another thing that
uh you would like to know is here
safaricom was ranked as africa's best
employer 67th in the world
by forbes global 200 list of the world's
best employers
in march 2018 safaricom ranked as the
the number one company to work for in an
annual
best one of the companies to work for in
kenya according to career
professionals and job seekers this is
also
another biggest point
uh that actually could be making a
safarico
company to grow big why because actually
every if it is the best company every
bright person
every good person will be willing to
work for this company
so what this does of course the
brightest mind is the greatest mind this
will be back in
this this company this one will drive of
course innovation
motivation of course which makes uh it
do better uh so basically if you also
want to read
more about this company i will just put
a
description below for all as uh we have
our rest time
uh what else we can talk about is just
i'll be going to its uh
shareholders uh it's shareholders
uh this is the shahodah uh
one is the government kenya it owns 15
percent
vodafone only sixty percent uh little
investors
uh which includes me and you uh it is 25
percent
basically this vodafone is uh if you see
if you click on it it is a british multi
national telecom company so this
vodafone
is a telecommunication company which
only 60 percent
so this is also a good because they have
the expertise and experience in a
telecommunication company
so this is a good sign if a company that
owns safaricom has an experience in
uh telecommunications so basically
that's the brief introduction about
safaricom so let's go to its uh figures
and also show why it is increasingly
going up so if you go to
its statistics as time i'm recording it
is
around 35.85 it has declined actually
because uh
last week it even attached around 37
as the highest so
when you go to the last five years
you can see it has been going
up it went down a bit it goes
it went up so you can see it went from
um 15.96
to 35.8 as of now it as i told it
increasing up to
37. so this is one of the greatest
investment uh story in stock market on
kenyan stock market or even in east
africa
so safaricom is one of the so if you go
to the maximum
uh you can see since 2008 2008 actually
it's when
it was uh listed in the stock market
so you can see it even reached to
two point two point around two point
five
yes two point seven five and if you
owned it now you have it could have
multiplied more than 10 times
so this is um so you can see this is an
inspiring story if you are an investor
this is
one of the companies that should
encourage you to look for companies that
have
uh competitive advantage that have a
better future
like this safaricom so basically so
this is how it has been performing you
can see it's not it does not
it has not really this time only but um
since 2008 it has been increasing slowly
you can see going up and down but in the
long term view you can see it has been
going up okay so if you see it's um
ratios uh one of the issues that i like
is earnings per share
which is uh 1.79 dividend yield
uh dividend is a one so they paid 1.4
out of
um so uh mainly because actually
safaricom is a big company it doesn't
have much uh
to use the money it always pays its
shareholders
80 of the earnings so which is 3.7
this uh dividend yield is not good
personally i will tell you
uh at the end of the day why i don't
like companies that are giving
dividends of this nature uh so if you go
to
priced price to earnings ratio uh it
says
nineteen point seven basically telecom
account
communication companies uh they are
always having
the high uh price to earnings ratio
because most of it's the the assets are
in networks
and also in human resources which are
not actually counted as
assets so you find uh their
price to earnings ratio is very very
high and again
there's nothing to compare with because
it's the only telecom
camp telecommunication company that is
listed on
the exchange so basically
as you can see the one year change it
has been a 13 percent which is not great
but
slowly it has been uh going up uh
so basically it's about the ratios and
also the graph that is uh
very very positive if you're an investor
so let's go to its uh
income statement that actually is
impressive that has made people maybe to
invest
in it so you can see from 2019
it was around uh 127 billion
uh so it increased to twenty one hundred
twenty nine billion it increased to one
hundred thirty two billion
uh this time twenty uh
it's a good actually today a new one
yeah which gives us a better picture
so you can see since 2017
uh this one was around 212 billion
then it increased it to 234 billion
it went ahead and went to 250 billion
and also as of uh 2020
it went to 262 billion
kenyan shrinks so from if you see the
total revenues the total revenues has
been
increasing very very well
so this is a very good picture of a
company that you would like to own
because you would want the company to
keep increasing
in terms of revenues so if you also
check
the their
cost
the cost of revenue here it has not been
increasing
that much which is an advantage
because it increases to its profits if
the
cost of revenues is not that high so if
you can see
also from the gross profits it has been
also
increasing actually at a
good good good margin which is a very
good picture which would want to see
if you want to own a company so this is
actually these figures are very very
very very promising so if you check on
the
another one is the operating income
operating home also you would want that
picture to keep increasing from
70 billion to 79 to 88
to 101 video this is also
a very very very good figures as you can
see it has been
increasing at a very very very good rate
so this is a good thing another thing to
go for
also the net income uh the
the mainly the income that remain with
after all the expenses are subtracted
so you can see 48 billion 55 billion 62
billion 73 video so this one
gives you a good picture of why actually
it has been
increasing because the more the company
performs
the more the price is reflected in the
share price that's why actually
uh we are seeing it now but the price
you can see the price has been
increasing sorry because of its
better performance so when we go to
the earnings per share
which is uh here you can also from 1.25
to 1.38 to 1.56
to 1.87 so if you see this one if you
want to calculate you will see that the
percentage is very good
it has been actually performing over 20
percent per annum which is
uh no is layer to find actually
especially in east african region
so you can see why uh the share price
has been increasing because
these earnings per share have been
reflected in the
share price of the company so if you
as a person who invest also in for
dividends
you can also they have been consistently
increasing
their dividends from 0.97
to 1.1 to 1.25 to 1.4
so this is also very very good if you're
also a dividend investor
because every year they have been
increasing
their dividends so it's not a rocket
science that
safaricom price has been skyrocketing
so this is one of the reasons why i
believe
the price of safaricom has been going up
because their figures their incomes
their earnings their dividends has all
been going
up so this one correlates with also the
price increase
because when the company is performing
well it's
no-brainer that also the share price
will go up
eventually so basically that is uh
about income statement maybe we can go
to also the balance sheet
which i also like to read uh when i'm
assisting the company that i would like
to invest in
so let's go to annu
and your figures are also from 2017
so uh total current assets
uh these are short-term uh short-term
assets
which actually most of the telecom
companies normally use because uh
for them it's all about investment so
if you check uh cash it's uh
from 250 25 billion
to 27 billion to 49 video
248 this one reduced a bit
because actually we we are in uh video
remember so so far still you can see
it's also
very very good all right it slightly
reduced as as i told you because uh
every company was affected
uh because of the covet but you can see
that the figures have been increasing
at a very very good rate so if you go to
the total assets also
uh you can see uh from 16
billion this is 161 billion to 167 video
to 192 video to 213
videos so you can see also the assets
have been
on uptrend which is uh a typical of the
company everyone would want to
own because of the improvement in assets
quality
and also the short-term equivalence so
if you go to
liabilities you can see the liabilities
also these are the dates actually uh
the costs of the company you can see
they have not gone anywhere
they here in 2017 they were
57 billion they reduced they increased
of course this increase
uh you know 2020 was not an easier
that's why it increased but you can see
uh the variabilities were minimal
which is a good thing if you see the
wrong term dates
actually is one of the things you would
want to see in the company if the
company has debts
so far you can see since uh 2017
to 2019 they have not been having debts
but even also
this date is very minimal to a company
so
that is a very very strong statement on
a company if the company does not have
any debt so you can see that it is not
just yesterday that he safaricom has
been
improving but since i don't know i
remember
the company has been doing very well it
has not been having any debt
and also you can see also the total
equity
letter to equity the equity actually the
equity is the total actually
net uh assets of the company i can't say
so you can see it has been increasing
from 107
a billion to 123 billion to 144
to 143 so you can see the
the trend has been been very good
so that is the the reasons why i think
the
this uh company has been doing very well
because you can see the
the income statement the asset balance
sheet
all of them they are very positive so
this is the typical company
of uh the companies that i would like
to own so what
could also be other factors that could
be leading
to its price going up because since 2020
was a
very very bad year for most of the
companies but this company
actually slightly declined it to 26 and
also went
up so mainly is last year many people
actually
went to online businesses online so they
were using airtime and what so
it did more actually benefit from 2020
than most of the other company
another reason if you remember if you
don't remember
uh 2019 safaricom was bidding
to also have uh to own a telecom
license in ethiopia andrew saw was
bidding to buy
one of the shares in company telecom
which is
ethio telecom so recently this
ethio telecom that was a news by kenyan
wall street
let's lead it together ethio telecom
ethiopian national telecom has announced
plans to invest
in the financial sector seeking to boost
the company's operations besides
its traditional telecom service
according
to the company's ceo tamiru the company
has already applied
uh to national bank of ethiopia
financial farms registered body to
launch a mobile banking service
in the country furthermore the body has
given the green right
to commence business on the new segment
currently ethiopian government is
looking to part resell
the share of theo telecom to foreign and
local investors with the major share
remaining under the government control
however there is a concern
that since the enterprises 40 percent
share would be owned by foreign
investors indirectly it will allow
funding companies or individuals
to be involved in a financial sector
which is exclusively given
to for ethiopian so why am i reading
this article this article i think
could be related to safaricom
it's price increasing why because as i
told you this ethio telecom
is seeking to sell uh
its shares uh 48 percent of its shares
to
foreign companies and also as you can
see it go to license to start
engaging in the mobile money service so
if your telecom was to
partner with any other telecom company
it would be safaricom because it would
benefit
from the expertise and experience that
safaricom would bring in terms of mobile
money
services so maybe there's something that
we don't know that
uh other investors know but of course
not it
out but me uh of course this is a
speculation so we shouldn't go it
by it but me i believe if ethiopia must
buy to sell its shares obviously it will
sell its shares to
safarico since safaricoma's experience
in managing mobile money and also uh
has also a lot of finances to finance
this project
of ethio telecom so basically these are
my thoughts
as i always say every day please make
your own search before
any other investment android software
research and also due diligence when
you're going to
invest such that you make own
informed decision once again if you're
not subscribed to this channel please
consider subscribing such that you don't
miss
other vids like this we have seen how
great this company is in terms of
balancing it in terms of our financial
statement so
what is my opinion what is my conclusion
on whether i should be selling or buying
personality currently i don't own
safarico
because i sold my shares and bought
something cheaper because at the moment
i believe safaricom
is a bit overvalued this is not to say
that safarico may not go higher
it may continue going higher
but personally i believe safaricom is
a strong company it may go higher but
to my price uh to my price or to my
uh analysis i believe
safaricom is overvalued so what i did i
sold
my shares that owned the safaricom and
bought something
cheaper because at the moment at the
current market there are very very many
companies that are very very cheaper
than safari home so if
what what is my opinion of course as i
said you should you do your own
research when you're going to invest in
stock market
i'm just giving my view so you also have
your view
safaricom even if you own it and don't
say it i can assure you it will go
higher
in the near future but at the current
price personally i wouldn't be buying it
i would wait
and see what will happen in the near
future because
you know uh in the market this is what
they call formal
fear of missing out so when most of the
time the
price of the company is going up many
people actually
tend to join that kind of wagon
uh not to miss out so you find they are
buying so
they push it higher so i don't know
i don't know when people stop buying it
definitely the stock comes back comes
down
and settles down so that's what i'm
thinking now safarico
is going to settle down at a later stage
that's when we shall join again maybe
when it reaches below 30
which i believe soon it will happen so
that is
my own view so you should also
make your own research when you're going
to invest so you make your
own informed decision once again thank
you for watching have a nice day
bye bye