Monday 3 March 2014

Contrarian stock bought March 2014: Kernel

When I came back to my hotel room after a shopping session in Old Delhi I discovered that yet again one of my stocks had dropped like a stone and this time it was not the usual one: Asian Bamboo but it was my Ukrainian agricultural and logistics company Kernel. If you want to look at the analysis of it then please look here. I checked on their home page if there were any indication of changed fundamentals of the company and since I saw nothing I assumed that the reason is due to the potential war between Ukraine and Russia.

War is a well known reason for strong drops in stock markets as well as in individual stocks. The reason for that has usually been that all the speculators get scared and run away and it can provide excellent moments for value investors to get stocks cheap.

No matter what happens people will still need to eat and they will still need sunflower oil. Therefore the fundamentals have not changed even if the environment around Kernel currently is turbulent. There will be trouble and there will be hard times but things tend to bounce back and I hope that things will not escalate into war.

So I increased my stock portfolio with 160 Kernel shares at a price of 6.23 which with fees give me now a total of 360 shares for 9.79 € a piece. Already before this investment the shares have been slowly dropping, which I assume, has been mainly due to decreased sale of sunflower oil which is the main profit driver.

With the next update of the monthly report the new change will be brought in to the Stock Portfolio.

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