East African Breweries Ltd is an exceptionally impressive company. Listed in Kenya on Nairobi Stock Exchange, open to all investors world over, with majority holding by DIAGEO, sells at 5 times sales, 4 Billion USD market cap. 800 Million USD revenues, 33 times earnings.
ROE of 100%.
That is how stocks should trade, even in country like Kenya with every circumstance against the grain, blue chip like this are 4-5 times revenues, just like other emerging markets. Nothing special about BRIC. Whats super cheap is Gillette Pakistan at 13 times earnings or Unilever Nepal, or GSK Bangladesh 1.5 times sales and also the unrealised potential.
Most of top tier in India is 4-8 times sales. Pendulum swung too far in cases like GSK Pharma India at 8 times sales with nothing to show on growth report card. I am too intoxicated to buy GSK Pharma, because perhaps I was not born in Japan and not used to 0% rate of interest. So, stocks for them need to trade at 1% dividend yield, useful to know how they think ! At the other extreme the world is either undecided or trying to imitate and pull trigger only after five other funds have bought. Second one fits that description.
Pressman Corporation is the best conglomerate of Malawi, need to investigate more.
The business interests are wide ranging with dominant position in each business, Carlsberg Beer, Coca-cola franchise, Bank, Fisheries, Energy, Telecom, Real Estate, Trading and much more. This company is ditto as Tata Sons or Steamships Trading Company PNG.
Quality of Management and Annual report is outstanding. Company contributes to 10% of GDP of Malawi with 300 Million in Revenues and 25 Million USD profits. Available at only 2 times earnings. Since the conglomerate is a Bank as well Debt/Equity ratio does not compare with FMCG companies. In India, Nigeria, or New Zealand I am certain this would trade at 45 times earnings.
Disclosure: Not invested in Press Corp or East African Breweries as yet, vested interest in rest of the stocks mentioned.