reports
- Dave Nicoski
- Ross LaDuke
Vital Signs: Actionable charts
In this product we rank the most positive and negative domestic stocks, filter the symbols by market-cap and trading volume, and then divide the companies into sectors and groups. We then manually look through charts leadership/changes, bottoms-up/top-down ideas, short-term patterns that may have long-term significance, etc. We believe you will find this product valuable as significant price and relative moves begin in the daily charts.
LII LENNOX INTERNATIONAL INC.
PKG PACKAGING CORPORATION OF AMERICA
VGR VECTOR GROUP LTD.
UFPT UFP TECHNOLOGIES
TTMI TTM TECHNOLOGIES INC.
TRU TRANSUNION
TPH TRI POINTE HOMES INC.
NGVC NATURAL GROCERS BY VITAMIN COTTAGE INC
LINC LINCOLN EDUCATIONAL SERVICES
HY HYSTER-YALE MATERIALS HANDLING INC. CLASS A
HURN HURON CONSULTING GROUP INC.
EVH EVOLENT HEALTH INC CLASS A
ENVA ENOVA INTERNATIONAL INC
ENS ENERSYS
DY DYCOM INDUSTRIES INC.
CVLT COMMVAULT SYSTEMS INC.
CHKP CHECK POINT SOFTWARE TECHNOLOGIES LTD.
APEI AMERICAN PUBLIC EDUCATION
SYF SYNCHRONY FINANCIAL
CW CURTISS-WRIGHT CORPORATION
BLDP BALLARD POWER SYSTEMS INC.
COOP CO-OPERATIVE BANK OF KENYA
ATRO ASTRONICS CORPORATION
LBRDA LIBERTY BROADBAND CORP. CLASS A
MWA MUELLER WATER PRODUCTS INC. CLASS A
VMI VALMONT INDUSTRIES INC.
UNFI UNITED NATURAL FOODS INC.
DFIN DONNELLEY FINANCIAL SOLUTIONS INC.
BELFB BEL FUSE INC. CL B
GSHD GOOSEHEAD INSURANCE
GENC GENCOR INDUSTRIES INC.
STRA STRATEGIC EDUCATION INC.
HOV HOVNANIAN ENTERPRISES INC. CLASS A
AMPY AMPLIFY ENERGY
VHI VALHI INC.
UFPI UFP INDUSTRIES INC.
OGN ORGANON & CO
2VZ LEONARDO DRS INC.
DO DIAMOND OFFSHORE DRILLING INC.
- Faith Mwangi
Kenya Banks: Sector Q3 21 PBT jumps 68% yoy, and outlook for Q4 is pos...
Kenya banks' sector-wide profit before tax (PBT) grew 68% yoy in Q3 21, according to the latest data from Central Bank of Kenya. On a cumulative 9M 21 basis, PBT increased 63% yoy. Of our covered banks that have released results, KCB Group leads the pack with a 131% yoy jump in 9M 21 PAT, Equity Group comes in second with a 78% yoy increase and Co-op Bank comes in third with a 19% yoy rise. Some key trends in Q3 21 earnings performance include: 1. Improved asset quality with industry NPL rati...
- Faith Mwangi
Cooperative Bank: Reiterate Hold, despite strong 9M 21 revenue perform...
Co-op Bank has released its 9M 21 results, with EPS increasing 19% yoy to KES1.98. Revenue performance was positive on the back of stability in margins and positive non-interest revenue growth. Profit before provisions increased 26% yoy. Earnings, though, were weighed down by increased operating costs, which pushed up the cost/income ratio above that of peers and increased loan loss provision charges. This is unlike the trend seen in Equity Group and KCB Group results, whose earnings were bo...
- Faith Mwangi
Kenya banks: Lucrative SME potential undercut by low yields and asset ...
The Central Bank of Kenya (CBK) has released a new study on small and medium-sized enterprises (SMEs), already an important sector for Kenyan banks but one with a great deal of growth potential. Our key takeaways on what the report means for the banks we cover: 1. SME SEGMENT ACCOUNTS FOR 20% OF INDUSTRY LOANS, BUT THERE IS UNTAPPED POTENTIAL The management teams of the Kenyan banks we cover argue that the SME sector is the next growth frontier. In our view, though, the majority of their loan...
- Faith Mwangi
Cooperative Bank: H1 21 earnings lower than sector average on weaker a...
Co-op Bank released dismal H1 21 results with EPS rising just 2% yoy to KES1.26. The bank's PBT was up 10% yoy, which is much lower than the industry average of 42% yoy in the first five months of 2021. Co-op Bank recorded a 123% yoy jump in loan loss provision charge, unlike its peers Equity Group and KCB Group, which both reported a decline. Co-op Bank's NPL ratio declined to 14.6% in Q2 21 from 15.2% in Q1 21, but this was much higher than the 10.5% in Q2 20. This is in line with the secto...
- Faith Mwangi
Kenya banks: Profit before tax up 97% yoy in first two months of Q2
According to the latest data from Central Bank of Kenya, the country's banks recorded a 97% yoy increase in profit before tax (PBT) for the first two months of Q2 21 (April and May). In the first five months of 2021, PBT increased 42% yoy, which is still a strong performance for the banks. We believe the performance was mainly on the back of three factors: 1. Lower provision charges given that Q2 20 saw banks accelerate their cost of risk to counter the asset quality weakness related to Covi...
- Faith Mwangi
Kenya Tier 1 banks benefit from agency banking surge; Equity Group lea...
According to new Central Bank of Kenya (CBK) data, total agency banking transaction value in H1 21 grew by 52% yoy to KES3.3bn. This was on the back of a 10% yoy rise in registered mobile money accounts to 67mn and a 23% yoy increase in overall agency transaction numbers. The growth in overall transaction values tallies with the continued shift to digital transactions that the pandemic has accelerated. The value per transaction increased by 11% yoy to KES3,029, boosted by clients increasingly...
- Faith Mwangi
Kenya banks: Four ways M&A could transform the sector
In the final report of our series on mergers and acquisitions in Kenya banks – we previously traced its history and concluded that the country is overbanked relative to African peers – we examine the banks we believe would be targets for M&A deals going forward.
- Faith Mwangi
The fourth wave of Kenyan M&A: Lessons from Nigeria and Ghana
Recently, we looked at the history of mergers and acquisitions in the Kenyan banking sector and the coming "fourth wave"; in this report, we examine what the processes of consolidation in Nigeria and Ghana can tell investors about what to expect in Kenya. Relative to other major economies in Africa, Kenya is over-banked, which supports our view that consolidation activity is likely and desirable. By our estimates, if Kenya is to match its peers in the list of the biggest 10 African economies,...
- Faith Mwangi
The complete history of M&A in Kenya banks – the fourth wave is here
In this new series of reports, we consider the theme of mergers and acquisitions in the Kenyan banking sector. In the past decade, there has been a notable increase in consolidation and in this first report in the series, we trace the history of mergers and acquisitions in Kenya banks and identify the drivers of future consolidation activity. Kenya has been through three significant phases of mergers and acquisitions, which were mainly prompted by bank failures. We believe we are now in the f...
- Faith Mwangi
Cooperative Bank: Low Q1 earnings from unexpected loan loss provisions...
Co-op Bank has released its Q1 results, showing EPS declined 4% yoy to KES0.59. The results are disappointing in our view, and were mainly driven by higher loan loss provision charges (+154% yoy). The latter, though, was in line with management expectations, which had forecast a cost of risk of c2.5-3.0% in FY 21. On the positive side, pre-provision profit was strong, growing 20% yoy, driven by an increase in net interest margins. However, the bank’s non-interest revenue declined 9% yoy as f...
- Faith Mwangi
Kenya banks: Strong rebound in Q1 as profits surge by 20%
According to data from the Central Bank of Kenya, banking industry PBT increased by 20% yoy in Q1 21. On a qoq basis, PBT increased by 94%. According to the regulator, there was a slight decrease in income (5% qoq), which we believe is largely related to lower loan yields in the quarter. Earnings were boosted by a decrease in expenses by 23% qoq, which we believe was related to lower loan loss provision charges. Overall, the industry ROE was 22.0% in March 2021 compared to 20.4% in March 2020...
- Faith Mwangi
Kenya banks: Regulator ends Covid restructuring regulations, as expect...
The Central Bank of Kenya announced that it will not be extending the regulations allowing restructuring of loans. The allowance to restructure was implemented in March 2020 and it allowed banks to save on capital as some borrowers facing weakness could be extended moratoriums and restructured loans which reduced the need to make loan loss provisions for them. The end of this allowance was expected, in our view. On the downside, we expect NPLs to tick up as from Q2 21, driven by restructured ...
- Faith Mwangi
Cooperative Bank: Management pessimistic on earnings outlook; downgrad...
Following the release of FY 20 results, Co-op Bank recently held a conference call, where the bank presented its outlook for FY 21. While there are some positive aspects, management expects ROE at 12%, a far cry from the historical average of above 15%, making the outlook pessimistic overall. * Loan growth of 10% – Management is keen on growing the bank's personal lending segment where it has already identified employers they are willing to work with to issue loans. However, there is still s...
- Faith Mwangi
Cooperative Bank: FY 20 earnings before provisions show weakness with ...
Co-op Bank FY 20 EPS declined by 20% yoy to KES1.98. The bank declared a dividend of KES1.00. Unlike KCB, Co-op Bank's earnings before provisions were weak having declined 3% yoy with operating expenses rising 24% yoy. Loan loss provision charge jumped 219% yoy leading to overall PBT falling by 31% yoy. NET INTEREST MARGIN STABLE ON DECREASED COST OF FUNDS Net interest margin was 8.4%, the same as in FY 19. The bank managed to reduce gross funding cost by 30bps, which matched the decline in b...
- Ayobami Omole
- Faith Mwangi
Kenya: New data show soaring digital payments
The Central Bank of Kenya (CBK) released digital transaction data for both banks and telcos in 2020, showing strong growth in digital payments and a decline in card transactions. In this report, we use the data to compare digital transactions in Kenya between July 2019-March 2020 (pre-pandemic) and April-December 2020. This allows us to assess the impact of the regulatory changes in March 2020 when fees on transactions were reduced and the upper limit on transactions increased. OUR KEY OBSERV...
- Faith Mwangi
Kenya banks: Profits fall by 29% in FY 20 on weak asset quality
According to data from the Central Bank of Kenya, total banking industry PBT fell by 29% yoy in FY 20. On a qoq basis, PBT fell by 19%, which we believe was related to accelerated cost of risk given weaker asset quality. This is not entirely unexpected considering that out of the banks we cover (which account for about 65% of total industry profit), four of them have issued profit warnings (signalling PAT in FY 20 will fall by more than 25% yoy). The banks that have issued profit warnings are...
- Faith Mwangi
Cooperative Bank: Q3 20 EPS declines by 25% yoy as loan loss provision...
Co-op Bank released Q3 20 results with EPS declining by 25% yoy to KES 0.44. On a cumulative 9M 20 basis, EPS was down by 10% yoy to KES1.67. Earnings were dragged down by a 1% yoy decline in non-interest revenue with fees and commission income increasing by just 2% yoy. Additionally, loan loss provision charge jumped by 129% yoy as gross NPLs accelerated 34% yoy. With the bank's exposure to commercial real estate, we expect NPLs to remain elevated as the impact of Covid-19 has resulted in a ...
- Faith Mwangi
Cooperative Bank: Q2 20 – Better-than-expected results but profits d...
Co-op Bank released Q2 20 results with EPS decreasing by 7% yoy to KES0.62. On a cumulative H1 20 basis, EPS decreased by 4% yoy to KES1.23. Although the bank's performance was better than expected, the results were still poor as we see the decline in profit as negative. The poor results were on the back of higher operating expenses following elevated staff costs and higher loan loss provision charge (+42% yoy) with gross NPLs increasing by 12% yoy. Unlike KCB, Co-op Bank’s Q2 20 tax charge d....
- Gerald Muriuki
The Co-operative Bank of Kenya Plc (NSE: COOP) 1H20 Earnings Note
The Co-operative Bank of Kenya Ltd (NSE: COOP) announced 3.6% y/y fall in 1H20 Earnings per Share (EPS) to KES 1.23 slightly ahead of expected KES 1.14 on slower-than-expected provisions. The growth was slackened by 57.9% y/y increase in provisions and 11.3% y/y increase in other operating expenses against a 5.3% y/y growth in operating income. Net Interest Income (NII) grew impressively by 11.6% y/y to KES 15.9Bn as Non-interest revenue (NIR) backtracked 5.1% y/y (33.3% q/q) in what we attribut...
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