http://www.jarushub.com/please-advise-bosun/

http://www.jarushub.com/re-please-advise-bosun/




Bosun is a 1990 graduate of Business Administration from the University of Lagos. He was born into a family of investors. His father is a retired Professor of Economics from UNILAG, and his mother a retired stockbroker and fund manager at the pioneer investment bank in Nigeria, NAL Merchant Bank. Both have over forty years’ experience in the Nigerian capital market.

He joined Nigerian Breweries in 1992 a management trainee; he is now a 43 year old middle level management staff in the Procurement department of Nigerian Breweries. Bosun was smart enough to have used the car loan given to him in 1993 to buy shares; he was loyal and patriotic to NB by investing the sum in Nigerian Breweries shares.

Due to bonuses received over the years and reinvestment of his dividends, [b]he now has a little over a million units of Nigerian Breweries shares. [/b]His investment in Nigerian Breweries now constitutes 80% of his total net worth.

1. With the current state of the Nigerian financial market, what advice will you give to Bosun.

2. As at 31st December 2012 what was the net asset per share, price earning ratio, price growth rate of Nigerian Breweries share.

3. If Bosun’s investment in Nigerian Breweries represents 80% of his net-worth, what is the net worth of Bosun?



4. What lessons can we learn from Bosun?

My advice is for him to continue to compound till retirement as Naija pension no sure ooo

INFO TECH: My advice is for him to continue to compound till retirement as Naija pension no sure ooo

http://www.jarushub.com/re-please-advise-bosun/



I think NB shares are overvalued based on the previous and current earnings and growth potentials of the earnings. If we use the half year result as the basis of our analysis, the company will make an earning per share of about N5.40 at the end of 2013.

That means 1 million shares of the company valued at almost N170 million will earn just N5.4 million and may be a dividend of N3.5 million, less withholding tax of 10% giving us a dividend of N3.15 million. An investor can get better returns from other stocks, money market investment and real estate.

Most corporate executives are emotionally attached to the shares of their companies; therefore they are always reluctant to sell their company’s shares when the need arises. I think Bosun is in similar boat. Our investment decisions should be determined by economic realities and rational analyses rather than emotional attachment.

If I were Bosun, I will sell 90% of my NB shares and raise about N150 million and will be left with just 100,000 units of NB shares.

The N150 million that was realized from the sale of the 90% of my NB shares will now be diversified by investing N40 million in real estate that will generate about N3 million as rental income. Another N10 million will be invested in acres of land at either Agbara/Igbesa, Mowe/Ibafo or Epe axis. The acres will be divided into plots and resold for a profit margin of 20% to 25%.

N10 million will be invested in treasury bills and another N10 million will be used in setting up a company. The company will supply raw materials and commodities like maize, millet, barley, sorghum etc to companies in the brewery industry. My experience in the procurement department in a brewery company will come to play in this venture. The company will be managed by a trusted partner.

http://www.jarushub.com/re-please-advise-bosun/

The remaining N80 million naira will be invested in good undervalued companies that have good products and management in place, growing their earnings by a minimum of 10% per year and are currently selling at a PE of less than 10. These stocks will give a dividend of about N5 million per year and a very good probability of increasing the dividends as the earnings increase.

The blue-chip shares will now be used as collateral to get a loan of about N40 million for real estate investment, rental income, dividends, interest and profits from my business will liquidate this loan in 3 years, this loan cycle will continue for about 10 years. In 10 years time, I should have added 3 income generating house to my real estate portfolio.

This strategy would have increased Bosun’s net-worth by a conservative estimate of N150 million. We know that Bosun’s net-worth is about N210 million, his investment in NB represents about 80% of his net-worth. Assuming this strategy gives a very conservative return of 10%, his current net-worth of N210 million would have grown to N544 million in 10 years, if we add this to his real-estate portfolio Bosun will have a net-worth of about N700 million in 10 years. By this time he would have spent 30 years in the company and will be getting ready for retirement.

Bosun’s investment in real estate, stocks, business and money market instrument can comfortably give him an annual income of over N30 million.

Nice one. How will he go abt the biz of reselling land? Details please? Will he register a real estate coy, buy via a lawyer, go for the c of o, don't u think it will take time for the c of o? Heard u have to get a global c of o, plot the land b4 u start selling. Also heard you can get land worth 30M with your 10mil and pay the remaining over a specified period of time.
Plz, list wt needs to be done.

mercylicious: Nice one. How will he go abt the biz of reselling land? Details please? Will he register a real estate coy, buy via a lawyer, go for the c of o, don't u think it will take time for the c of o? Heard u have to get a global c of o, plot the land b4 u start selling. Also heard you can get land worth 30M with your 10mil and pay the remaining over a specified period of time.
Plz, list wt needs to be done.

Make sure the land is not under government acquisition, you get get this information from the bureau of lands. You can get a certificate of occupancy for the land, this will enhance the value of the land. But if not, if you can do a little improvement on the land, divide into plots and get people who can market the land, you should be able to make good profit.

As per using N10 milion to buy land of N30 million, that is what most speculators and land entrepreneurs do. They will use depositors money to pay the balance, if you want to try this I will advice you to start with something like N1 million or less.

Does Bosun still need advice on what to do with his investment in 2019?

Wetin concern me when I am not Bosun ?
What percentage of his shares will I get for this consultation ?

emmanuelewumi:



http://www.jarushub.com/re-please-advise-bosun/



I think NB shares are overvalued based on the previous and current earnings and growth potentials of the earnings. If we use the half year result as the basis of our analysis, the company will make an earning per share of about N5.40 at the end of 2013.

That means 1 million shares of the company valued at almost N170 million will earn just N5.4 million and may be a dividend of N3.5 million, less withholding tax of 10% giving us a dividend of N3.15 million. An investor can get better returns from other stocks, money market investment and real estate.

Most corporate executives are emotionally attached to the shares of their companies; therefore they are always reluctant to sell their company’s shares when the need arises. I think Bosun is in similar boat. Our investment decisions should be determined by economic realities and rational analyses rather than emotional attachment.

If I were Bosun, I will sell 90% of my NB shares and raise about N150 million and will be left with just 100,000 units of NB shares.

The N150 million that was realized from the sale of the 90% of my NB shares will now be diversified by investing N40 million in real estate that will generate about N3 million as rental income. Another N10 million will be invested in acres of land at either Agbara/Igbesa, Mowe/Ibafo or Epe axis. The acres will be divided into plots and resold for a profit margin of 20% to 25%.

N10 million will be invested in treasury bills and another N10 million will be used in setting up a company. The company will supply raw materials and commodities like maize, millet, barley, sorghum etc to companies in the brewery industry. My experience in the procurement department in a brewery company will come to play in this venture. The company will be managed by a trusted partner.

This is what I wanted to ask you about , your advice as always been on point , I remember when you once told me to go buy landed property and leave oando in 2014 , I just want to ask if there is any area you feel one can get good landed property in arces not too far from Lagos

Josh121:

This is what I wanted to ask you about , your advice as always been on point , I remember when you once told me to go buy landed property and leave oando in 2014 , I just want to ask if there is any area you feel one can get good landed property in arces not too far from Lagos

No idea, real estate especially land in Lagos is frustrating. Buying from Lagos State government does not mean you will get your allocation in 5 years. Just get in touch with reputable and trust property agents

@emmanuelewumi,

Interesting analysis on Bosun's holding, this was about 7 years ago. I was wondering if you will give the same advice today or what would it be if your opinion has changed?
I love reading your comments.

igbonla:
@emmanuelewumi,

Interesting analysis on Bosun's holding, this was about 7 years ago. I was wondering if you will give the same advice today or what would it be if your opinion has changed?
I love reading your comments.

Selling 90% of his shares in 2013 was the right thing to do.

The Brewers sector is not looking up, so I won't touch it till Buhari is out of Aso Rock

emmanuelewumi:



Selling 90% of his shares in 2013 was the right thing to do.

The Brewers sector is not looking up, so I won't touch it till Buhari is out of Aso Rock

Ok, thank you

If you are serious about this question get in contact with me.Lets meet and talk. I might be able to help. Thank you.

Josh121:

This is what I wanted to ask you about , your advice as always been on point , I remember when you once told me to go buy landed property and leave oando in 2014 , I just want to ask if there is any area you feel one can get good landed property in arces not too far from Lagos

He should do nothing abeg. When so called gurus start speaking investment English on top another man's money, that money is about to disappear.

He should continue buying NB shares until he retires and live of the dividends. N3m dividend is not bad at all, after all, he can sell a little in future if he has a good investment to put it.

SocialJustice:
He should do nothing abeg. When so called gurus start speaking investment English on top another man's money, that money is about to disappear.

He should continue buying NB shares until he retires and live of the dividends. N3m dividend is not bad at all, after all, he can sell a little in future if he has a good investment to put it.

That share is now valued at about N40 million, current dividend is less than N2 million.

Nothing good can come out of the Brewery sector until after 2023, Guinness, International Brewery, Nigeria Brewery are all struggling for survival.

Nigeria Brewery was over priced at N140 million in 2013

emmanuelewumi:


No idea, real estate especially land in Lagos is frustrating. Buying from Lagos State government does not mean you will get your allocation in 5 years. Just get in touch with reputable and trust property agents

I'm an upcoming investor please what do you think I can invest in now that will bring good returns in next five or 7years

emmanuelewumi:



That share is now valued at about N40 million, current dividend is less than N2 million.

Nothing good can come out of the Brewery sector until after 2023, Guinness, International Brewery, Nigeria Brewery are all struggling for survival.

Nigeria Brewery was over priced at N140 million in 2013

This year is a bad year especially for those hodling the wrong instruments but it will all rebound. He can also sell N10m worth of shares after securing express entry to Canada.

.

ATPx:
Emmanuelewumi Please can you add me to the Stock exchange group on WhatsApp. Thanks

Kindly give a brief introduction of yourself. What you, what you are you Investment interest etc.

emmanuelewumi:




Kindly give a brief introduction of yourself. What you, what you are you Investment interest etc.

Thank you.

ATPx:


Aminu Sani, I am a civil servant in my 20’s. In my quest to achieve financial freedom, I plan to start investing at an early stage. I have spread my portfolio to include investing in dividend paying stocks for the long term.

Unfortunately I don’t know much about the NSE. I have read almost all your articles on Jaru$hub investment section. I am also following TBills and investment threads.

I hope to gain valuable knowledge and insights in the WhatsApp group that will guide my investment decisions in the NSE.

Thank you.

Okay. I will tell the admins to add you.

emmanuelewumi:


Okay. I will tell the admins to add you.

Thank you. I will be waiting

.

.

Emndy:
Sir Emmanuelewumi can you kindly add me to the investment/NSE Watsapp group? and any other group where equities, real estate and bonds & other fixed income securities are discussed.

I have followed you for years and benefitted a lot from your insights. I tried reaching you via mail but i guess I didnt get the right one.

Thank you.
Regards.

Kindly forward your WhatsApp number, your name, profession and Investment interest

.

.

I will to Lagos and gently process my papers to Canada and then buy a house and raise my family there .

Emndy:
@emmanuelewumi


Engineer

This is not a WhatsApp number

.