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easimoni (m)
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@ boysteve, you can contact me at easimoni2004@yahoo.com. Can someone please explain what E.P.S and P.E ratio are and how I can use it to judge which stock is good enough.
They stand for Earnings Per share and Price to Earnings ratio. EPS tells you how much profit a company has made per outstanding share. PE tell you how much you are paying for each naira of that profit. PE = Price/EPS. The lower the PE, the cheaper the stock (all other things being equal). For more on EPS, click here. For more on PE, click here. |
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yodiyokun (f)
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anyone have an update on Union bank? I expect the register to close sometime this month - any dividend or bonus in the offing.
The price closed at 39.99 last friday!
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Iwerebor (m)
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anyone have an update on Union bank? I expect the register to close sometime this month - any dividend or bonus in the offing.
The price closed at 39.99 last friday!
There is a high level of activity around this stock that's affecting it negatively. I am also eager to know if there will be a predictable positive influence for it before the year rounds up. |
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Ijay07
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Hello easimoni,
I have been following your contributions, advices and all acorss the variuos threads and i must honestly commend you. You have a way with handling requests (even of the dumbest nature)
More kudos to you and keep being you.
Regards
Silent admirer
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tellmemore (m)
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Thanks easimoni.
So what do I look out for in both E.P.S and P.E ratio b4 I buy a stock.? Is it the high or lower of any of them?
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shigidi (m)
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i don miss evrybody here  . @ temmie10, i was able to lay my hands on some crusader myself. @easimoni, c&i leasing lost 5% yesterdsy, i think it should be available now if ure still intersted. what do u guys think bout mbenefits for now. pls holla |
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MyPeace (f)
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no body is talking about lasaco insurance. l learnt they just published their result. pls how true is it? l have 10,000 units of it bought at 3.25 and now it is sold for 2.83. ls there still hope on it??
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easimoni (m)
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Hello easimoni,
I have been following your contributions, advices and all acorss the variuos threads and i must honestly commend you. You have a way with handling requests (even of the dumbest nature)
More kudos to you and keep being you.
Regards
Silent admirer
Thanks! You just made my day! |
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easimoni (m)
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Thanks easimoni.
So what do I look out for in both E.P.S and P.E ratio before I buy a stock.? Is it the high or lower of any of them?
EPS is simply a means to calculate PE. Because of the inverse relationship, the higher the EPS, the lower the PE and a low PE is what we should be looking for. Now here comes the caveat: on the NSE, companies are always doing stock splits (aka bonus), rights, POs, IPO, private placements etc. Since EPS = Profit-after-tax/outstanding shares, you need to keep track of how many shares a company has sold that have not yet been listed. This is the current problem with banks and insurance companies; no one knows how many shares most really have and the NSE website takes time to update. Anyway, as a start, looks for the lowest PE (within the sector you are interested in) and account for sold but yet-unlisted shares in EPS calculations. Enjoy. |
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easimoni (m)
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no body is talking about lasaco insurance. l learnt they just published their result. please how true is it? l have 10,000 units of it bought at 3.25 and now it is sold for 2.83. ls there still hope on it??
Lasaco released N560M in PAT for 6 months to June 2007. this is up 1300% from the same period last yr! The problem is (just found out yesterday), they sold almost 6 billion shares during last yr's rights/PO. Factor in those shares and now they have 7.4B and a full year EPS of 15k. I'd say the current value is fair but in the long-term (1-2yrs) they should outperform the market. To the guy I told last week to keep his Lasaco, above is my revised position.   |
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MyPeace (f)
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Thank you Easimoni.
l will then keep it for long term.
But do you foresee any dividend or bonus share soon?
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Iwerebor (m)
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The elephant is taking a tumble?
what's the rumble?
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adechuks (m)
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And pls, what just happened to Zenith.
Down to N52
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Iwerebor (m)
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Looks like a correction has just occurred on Zenith Bank and First Bank.
They both have one thing in common: an unusual rise and an unusual fall.
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adechuks (m)
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Just heard that Zenith declared bonus shares.
1:5
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easimoni (m)
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Looks like a correction has just occurred on Zenith Bank and First Bank.
They both have one thing in common: an unusual rise and an unusual fall.
That's incorrect. Both companies declared "bonuses" and the prices were adjusted downwards on Friday to account for the "bonus" shares. Since FBN did a 1-for-6, the new price would be (6/7) x the old price. Same goes for Zenith: (5/6) x the old price. See why bonuses don't mean anything and why you shouldn't rush or ask for a abonus? |
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RoughCut (m)
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That's incorrect. Both companies declared "bonuses" and the prices were adjusted downwards on Friday to account for the "bonus" shares. Since FBN did a 1-for-6, the new price would be (6/7) x the old price. Same goes for Zenith: (5/6) x the old price. See why bonuses don't mean anything and why you shouldn't rush or ask for a abonus?
Correct my brother. This is that your EPS and P/E will still be the same because by right the shares outstanding would have increased and they need to be seen to maintain the finacial ratios before the split. That is what i call "tricke-down economics" so we are not fooled by "bonuses" and what else |
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RoughCut (m)
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That's incorrect. Both companies declared "bonuses" and the prices were adjusted downwards on Friday to account for the "bonus" shares. Since FBN did a 1-for-6, the new price would be (6/7) x the old price. Same goes for Zenith: (5/6) x the old price. See why bonuses don't mean anything and why you shouldn't rush or ask for a abonus?
Correct my brother. This is that your EPS and P/E will still be the same because by right the shares outstanding would have increased and they need to be seen to maintain the same financial ratios before the split. That is what i call "tricke-down economics" so we are not fooled by "bonuses" and what else |
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frankiriri (m)
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Correct my brother. This is that your EPS and P/E will still be the same because by right the shares outstanding would have increased and they need to be seen to maintain the same financial ratios before the split.
That is what i call "tricke-down economics" so we are not fooled by "bonuses" and what else
Incorrect. People will forget that a bonus was declared and still be comparing the performance of the share to its price pre bonus. Last year First Bank doubled on the news of the declarattion of 1 for 1 bonus. If not for the bearish trend in the market each of those new shares would have been worth at least N60 for Zenith and N52 for First Bank. But alas the bears rule the marklet for now. For this very reason it does pay to buy stocks that give bonuses. As I said elsewhere Naija is the only place where the size of the cake can be increased by cutting it into smaller peices. |
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Iwerebor (m)
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OK. heard you all.
Do y'all think these stocks (FBN & ZIB) still have steam in their engines? Is this a good time to collect them and hope to make profit before the year draws to a close?
Does anyone know why union bank continues to be a backsliding stock? why isn't it fellowshipping with the good crowd?
That security is making me insecure!
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easimoni (m)
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As I said elsewhere Naija is the only place where the size of the cake can be increased by cutting it into smaller peices.
Nice quote! I've made a mental note to use it in the future.  With your permission of course  |
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boy steve (m)
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Uncle Easimoni, I just email you can you please reply to my email as fast as possible, thanks
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steeviee (m)
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easimoni,
i must confess nice analyses u r doin.
do have any clue on firstinland i but it big time for short term purpose. but i think i have been burnt.
any hope
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Iwerebor (m)
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Easimoni ,tonight, is acting like a doctor who's out in the corridor enjoying a joke when his patients are dying for attention.
Before he caught the forum's eye as a guru worth watching, his posts in response to questions where not only intelligent but also diligent.
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Iwerebor (m)
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Nice quote! I've made a mental note to use it in the future. With your permission of course sad. And I thought that quote was out of joint. Why should it be said more than once? |
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Temmie10 (m)
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@ Iwerebor
There is no need to fear or loose sleep unduly.
The stock market in the short run can be compared to a voting machine.
There is a lot of follow follow, hence the extreme and unexplainable bull and bear runs which we've all been part of
But in the long run, its like a weighing machine.
Stocks of Good companies with strong fundamentals bought at decent prices will perform and bounce back and give a good return
In a sense also, i could say there's very few bad or good stocks, mostly we have bad or good prices.
So don't panic.
In many ways, the current pullback of prices is good for our stock exchange and for bargain hunters like u and i.
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RoughCut (m)
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Incorrect. People will forget that a bonus was declared and still be comparing the performance of the share to its price pre bonus. Last year First Bank doubled on the news of the declarattion of 1 for 1 bonus.
If not for the bearish trend in the market each of those new shares would have been worth at least N60 for Zenith and N52 for First Bank. But alas the bears rule the marklet for now.
For this very reason it does pay to buy stocks that give bonuses.
As I said elsewhere Naija is the only place where the size of the cake can be increased by cutting it into smaller peices.
I beg to disagree with you brother Frank there is no way a company will increase its stock of outstanding shares and still maintain the PE and EPS ratios hence the mark-down. Like you said Naija is the only place where the size of the cake can be increased by cutting it into smaller pieces which proves my point that this is trickle-down economics. The mere fact that price increases on bonus and scrip issues is very very artificial, sentimental and irrational and ultimately defies fundamental investment theory and logic but from our collective experience we know this phenomenon does not tend to last long or prove sustainable in the long run. So once again i say this is "voodoo economics" why do u think Warren Buffet has never done a stock split in his investment company Berkshire Hathaway? because he doesnt believe in "voodoo economics" or why do some companies pump millions and billions into buying back their own shares? I`m not railing against bonus and scrip issues i`m an investor in the stock market so i also get a slice of the cake (excuse the pun) but we need to put this into perspective and see it for what it is! Nuff said |
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Iwerebor (m)
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@ Iwerebor
There is no need to fear or loose sleep unduly.
The stock market in the short run can be compared to a voting machine.
There is a lot of follow follow, hence the extreme and unexplainable bull and bear runs which we've all been part of
But in the long run, its like a weighing machine.
Stocks of Good companies with strong fundamentals bought at decent prices will perform and bounce back and give a good return
In a sense also, i could say there's very few bad or good stocks, mostly we have bad or good prices.
So don't panic.
In many ways, the current pullback of prices is good for our stock exchange and for bargain hunters like u and i.
Thanks Temmie. |
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shigidi (m)
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@ easimoni how bodi? i am caught in a dilemma when it comes to intercontinental bank. i have a forecast eps of 1.44 by year end which should bring it to a value of 38 naira all things been equal. i made sure i factored in the p.o shares but my problem is i hear its 774% oversubscribed  . do u think i should still go for this one or should i wait a bit cos i dont want to miss out . it might be a very very diluted eps. |
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easimoni (m)
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@ Shigidi,
excellent question! I also have wondered about Intercont. bank. Some parts of the PO were oversubscribed to 774% but not the whole thing. Plus I don't think the bank itself would be willing/able to absorb as many shares as they were alloted. The MD is on the record as saying they raised 95B total from the offer. At 13.5, that is a little over 7B shares. If you use 8B and with the current 10.72B, you'll end up with 18.72B. With a PAT projection of 22B, you get a forward PE of 20.3, the lowest (according to me) among the 1st tier banks, but not awe-inspiring. Numbers could get much worse should they choose to absorb more than 95B
Personally, I'm taking a break from the banks.
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