BUSINESS and FINANCE

Long-term investments

Proper investment is about riding the winners and cutting your loses. It is this logic that makes long-term investments so profitable and lucrative, provided you have the patience to wait it out for years and even decades.

In the past decade, there have been several stocks that have had massive returns, simply because of the companies’ growth over time. Let’s look at the top 5:

Safaricom

Safaricom’s IPO in 2007 had the company’s share price retailing at Ksh. 5, which was so lucrative the stock ended up being overbought. Soon afterwards the share price slumped to below Ksh. 3, and many investors panicked and quickly cutting their loses. Fast track 8 years later and the stock is trending above Ksh. 17, looking to touch Ksh. 18 which is more than a 300% profit; only if you held on.

The question now, for those who are still holding Safaricom shares is to either take their profits or keep holding on. As we mentioned at the top, ride your winners! Safaricom is a clear winner with potential for even greater things, definitely one to keep a hold of.

Jubilee Holdings

As the largest insurance provider in Kenya, the company finds itself at the centre of a rapidly growing sector of the economy. Jubilee Holdings have divested into potent areas of the economy including undersea fibre optic cables, real estate and energy projects. Besides, their investment in Diamond Trust Bank have also given it a steady stream of revenue. It is these shrewd investment strategies that have given it a 743.6% return over the past 10 years.

Limuru tea

Similar to Jubilee Holdings, Limuru Tea have also divested away from their primary business. This company has become so involved in real estate that it is no longer even considered a tea estate in the stock market, despite its 677-acre tea plantation in Limuru. All in all, since 2006, Limuru Tea stocks have risen a warping 1,158% to date, making the shareholders extremely happy.

Centum investments

A 676.3% return on investment over the past decade is a testament of shrewd management by the company’s leaders. Centum has gradually acquired controlling shares in banking, real estate, banking and consumer goods, making it a power player in several industries.

Diamond Trust Bank

Although rarely mentioned or seen on newspaper headlines, this bank actually offers a great investment opportunity. This is due to a combination of little non-performing loans and increased customer deposits at 2% and 20% respectively. Share prices have been up 663.9% over the past 10 years and expansion plans into other East Africa countries looks to farther boost returns.

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