mendes911:


No try Jegede. He will rape the company more to the point that it will be worthless at 1kobo.

It was Oracle/RabbiDoracle that saved me from Jegede on smn. Till tomorrow I will still be grateful for this

emmanuelewumi:



I don't do insurance companies, most of them don't pay out 10% of their earnings as dividends. The return of equity from most of them is very low.

But some guys are making good money from stocks they understand who have low PE, UBA and Access at a PE of less than 3 and a dividend yield of about 25% was a good buy.

Insurance companies by law retain most their earnings. It is a highly regulated sector. Their dividend yield is however not bad.

wanaj0:


Insurance companies by law retain most their earnings. It is a highly regulated sector. Their dividend yield is however not bad.

What is the percentage of those that are paying dividends?

How to Calculate the Value of Stock With the Price-to-Earnings Ratio
A simple and effective method for understanding a stock's value now and in the future.

The price-to-earnings ratio, or P/E, is arguably the most popular method for valuing a company's stock. The ratio is so popular because it's simple, it's effective, and, tautologically, because everyone uses it.

Let's go through the basics of valuing a company's stock with this ratio and work out how this calculation can be useful to you.

Calculating the value of a stock
The formula for the price-to-earnings ratio is very simple:

Price-to-earnings ratio = stock price / earnings per share

We can rearrange the equation to give us a company's stock price, giving us this formula to work with:

Stock price = price-to-earnings ratio / earnings per share

To calculate a stock's value right now, we must ensure that the earnings-per-share number we are using represents the most recent four quarters of earnings. This is called the company's trailing-12-month earnings per share, and it can be found for most all public companies with a quick Internet search.

After looking up the company's trailing-12-month earnings per share, next we need to look up the company's P/E ratio. For the sake of understanding the ratio, you can use the P/E ratio listed on any of the many financial websites out there today, including Fool.com. Your broker should also have this information.

Finally, with these two numbers in hand, simply divide the P/E ratio by the earnings per share number and you'll have the company's current stock price. It's just that easy.

Using this method to improve your investing
If you use a company's current trailing-12-month earnings per share and P/E ratio, you aren't learning anything new about the stock. Your result will always match the stock's current price, which doesn't help you invest for the future.

However, by analyzing a company's future earnings potential and how the market values its competitors, you can use the P/E ratio to understand where you think the stock's price could be in the future.

For example, if the company has a major new product release coming next quarter, you could predict how that release may increase its earnings per share going forward. Most likely, your research will indicate a range of possible earnings per share predictions based on how well the product release goes.

You could also analyze the company's competitors to see how their current price-to-earnings ratio compare. If the competitor's P/E ratios are higher or lower than your company, then you could investigate why that is and what could change to drive their ratios either closer together or farther apart. You may determine that the there are no significant reasons and predict that the company's P/E ratio is likely to either rise or fall in the future to match the competition.

After you've completed your analysis, you can use the results to create a matrix to show where the stock price would be under various P/E ratio and earnings per share combinations.

Stock price matrix of possible P/E ratios and earnings per share
EPS 13 13.25 13.5 14 14.25 14.5
$1.00 $13.00 $13.25 $13.50 $14.00 $14.25 $14.50
$1.10 $11.82 $12.05 $12.27 $12.73 $12.95 $13.18
$1.15 $11.30 $11.52 $11.74 $12.17 $12.39 $12.61
$1.20 $10.83 $11.04 $11.25 $11.67 $11.88 $12.08
$1.25 $10.40 $10.60 $10.80 $11.20 $11.40 $11.60
$1.30 $10.00 $10.19 $10.38 $10.77 $10.96 $11.15

In the hypothetical example here, the first column shows the possible earnings per share numbers and the top row shows possible price-to-earnings ratios. The middle section of the chart shows what the stock price would be under each combination based on the aforementioned formula.

For a real analysis, the first column would be based on your analysis of the company's future earnings per share, and the top row would be based on your research of the competition.

This matrix tells you not just what the stock price would be in the specific outcome your research predicts, but also the stock price for a range of other outcomes.

It's impossible to predict the future, so there is no guarantee that any stock will perform as you predict. However, using the price-to-earnings ratio to value a company's stock in a variety of different situations is an effective way to understand the implications for all sorts of various outcomes. It's an easy and quick exercise to include in your stock research practices to take your investing to the next level.

This article is part of The Motley Fool's Knowledge Center, which was created based on the collected wisdom of a fantastic community of investors. We'd love to hear your questions, thoughts, and opinions on the Knowledge Center in general or this page in particular. Your input will help us help the world invest, better! Email us at knowledgecenter@fool.com. Thanks -- and Fool on!

mendes911:


No try Jegede. He will rape the company more to the point that it will be worthless at 1kobo.

It can't be worse than 1k.

Coolcash1:
With the 1k rule kicking off tomorrow, we might see a lot of penny stock companies that have remained stagnant voluntarily delisting from the NSE...

Be warned...

na so. trust those crooks especially those insurance companies. and it s an opportunity for these foreign funds to aquire those companies at give away prices

yom2:
na so. trust those crooks especially those insurance companies. and it s an opportunity for these foreign funds to aquire those companies at give away prices

Nothing stops us from buying them, why wait for foreign funds?

RabbiDoracle:


Not always. Don't you guys do research at all.


Look at this scenerio

A company X had a

Revenue =N120m,
Debt= N40m
PAT = N1m
Price = N4
Outstanding shares= 10m

PE is 40

The company did a right issue to lower debt and added 1m extra units.

After some quarters,

Revenue =N150m,
Debt= N5m
PAT = N15m
Price = N4
Outstanding shares= 11m

PE is now 2.9

Once this results comes out, people will.rush this stock and send the price to the roof.

So not all low PE companies are dead.

Also if you do your research, people will key into stocks before they release wonderful results. That is why Pa Emma keys into these rights because he has done his research.

#expo,

https://m.rediff.com/money/report/perfin-pe-ratio-helps-you-buy-great-stocks/20090814.htm
In more clear term.
40 is high PE, while
2.9 is low PE

Meaning companies with low PE is trading below their fair price when compared with those of high PE.

When looking for companies to invest, look for companies with low PE, apart from some of insurance companies.

9free:

E no go work oohh..... We don begin prayer and fasting on top Japual.

I laugh in Norwegian language . This is a matter of shine your eyes and eat some of the cake if there’s one. On the other hand, Prayer answered

Chibuking81:


In more clear term.
40 is high PE, while
2.9 is low PE

Meaning companies with low PE is trading below their fear price when compared with those of high PE.

When looking for companies to invest, look for companies with low PE, apart from some of insurance companies.

I think low PE is only good when the company has sound financials or fundamental. Hardly can you get low PE with good fundamental except during the time a company is recovering DF or after a crash of the stock market. Most good companies do have higher PE

sellydion:


I think low PE is only good when the company has sound financials or fundamental. Hardly can you get low PE with good fundamental except during the time a company is recovering DF or after a crash of the stock market. Most good companies do have higher PE

PE are still low, most banks have less than 8, we also need to look at the rate the companies are growing their earnings.

A company with a PE of 12, that is increasing earnings by 15% is very cheap compared to a company with a PE of 8 but earnings are not growing.

sellydion:


I think low PE is only good when the company has sound financials or fundamental. Hardly can you get low PE with good fundamental except during the time a company is recovering DF or after a crash of the stock market. Most good companies do have higher PE

I don't think so, there are still companies still with low PE. Most at time what hinder them is their share quantity traded in every market session. Some time you will only see 200 thousand units on offer side, then 50 thousand on the bid side. Meaning that if you accumulate up to 10 million units, and needed money urgently, it might take you some days to raise the money, your supply alone can push that particular stocks into full offer.

A lot of parked truck will move tomorrow, many will face southern pole. Tomorrow will be a good opportunities for many trapped investors to bail out by jumping out, from those vehicle as the roll back

Chibuking81:


I don't think so, there are still companies still with low PE. Most at time what hinder them is their share quantity traded in every market session. Some time you will only see 200 thousand units on offer side, then 50 thousand on the bid side. Meaning that if you accumulate up to 10 million units, and needed money urgently, it might take you some days to raise the money, your supply alone can push that particular stocks into full offer.

Just like you mentioned. Good companies with low PE call for research. Something must have kept their price like that. That snag may not be to investors benefit. Obviously there are exceptions to rules.

To my surprise, stocks at 50 kobo range were not up to 12.

Chibuking81:
A lot of parked truck will move tomorrow, many will face southern pole. Tomorrow will be a good opportunities for many trapped investors to bail out by jumping out from those vehicle as the roll back

Who will they sell to? A stock that had no buyer at 50k, is it 46k (assuming they open -5%) that will attract buyers? This foreseen retracing of share price from 50k might take a long while.

We will watch and see.

Chibuking81:
To my surprise, stocks at 50 kobo range were not up to 12.

Dunlop, Evansmed, etc, are not on your list though they are DIP.

mendes911:


Who will they sell to? A stock that had no buyer at 50k, is it 46k (assuming they open -5%) that will attract buyers? This foreseen retracing of share price from 50k might take a long while.

We will watch and see.

They will sell to the companies directors that will still wake up tomorrow, who still want to defend their share.
Or to those willing to buy at 10 or 5 kobo junction. It will open a new window to jijo group, who know much on how to take such risk.

Hope this will not affect real time online trading sessions, like Morgan capital & CSL stockbroker plat form. Hope their site will function effectively tomorrow. Because ups and down drama will happen tomorrow.

ABC might move up tomorrow.

Find the list of sites trading at 50k and their current status. This list would have been longer if not for the current bull that made it possible for some stocks to have left car pack. They shall soon be welcomed back.

ABCTRANS
ACADEMY [MRF]
AFRIK [DIP]
AFRINSURE
AFROMEDIA [MRF]
ASOSAVINGS [DIP]
CAPOIL [RST]
CHAMS
CORNERST
COURTVILLE
DAARCOMM [MRS]
DEAPCAP [DIP]
DUNLOP [DIP]
EQUITYASUR
EVANSMED [DIP]
FTNCOCOA [RST]
GNI [BAA]
GUINEAINS
HMARKINS
INTENEGINS [DIP]
JAPAULOIL
JOHNHOLT [MRF]
LASACO
MBENEFIT
MULTITREX [BLS]
MULTIVERSE
NIGERINS
NSLTECH
OMATEK [MRF]
PRESTIGE
RAKUNITY
REGALINS
RESORTSAL [MRF]
ROYALEX
RTBRISCOE
SOVRENINS
STACO
STDINSURE
TANTALIZER
THOMASWY [MRS]
UNIC
UNIONDAC [MRF]
UNITYKAP
UNIVINSURE [MRF]

I only know the follwoing: DIP - Delisting in Progress. MRF - Missed Regulatory Filing.

Chibuking81:

They will sell to the companies directors that will still wake up tomorrow, who still want to defend their share.
Or to those willing to buy at 10 or 5 kobo junction. It will open a new window to jijo group, who know much on how to take such risk.

Hope this will not affect real time online trading sessions, like Morgan capital & CSL stockbroker plat form Hope their site will function effectively tomorrow. Because ups and down drama will happen tomorrow.

I have been asking myself same question. Due to the changes, especially "tick size" changes.

Wow @Oracle and Pa Emma welldone Sirs.

R0LL0N ask but na me learn . This is why I love the forum abi thread. Kisses

sellydion:


Thanks making it simple is my request. Obviously not about me alone. Many other have asked. Why complicating the already

complicated matter. That is why I mentioned ideal methods not to place us in the ocean of confusion.

You are welcome.
good luck

Chibuking81:
A lot of parked truck will move tomorrow, many will face southern pole. Tomorrow will be a good opportunities for many trapped investors to bail out by jumping out, from those vehicle as the roll back

If care is not taken some people will continue from where those trapped investors stopped.. lol continue being trapped..

Chibuking81:

They will sell to the companies directors that will still wake up tomorrow, who still want to defend their share.
Or to those willing to buy at 10 or 5 kobo junction. It will open a new window to jijo group, who know much on how to take such risk.

Hope this will not affect real time online trading sessions, like Morgan capital & CSL stockbroker plat form. Hope their site will function effectively tomorrow. Because ups and down drama will happen tomorrow.

I will be watching all of them closely to see if the coast is clear enough for some quick profits.

And if my quest for quick profits turns to quick losses, I'll take it as my NSE school fees

Agbalowomeri:
Which company is good to drag down to 1kobo?

TRIPPLEG

Chibuking81:
To my surprise, stocks at 50 kobo range were not up to 12.

I think some 24 was delisted last year for not reporting. Ikeja hotel is one of them

Bell ringing...... ;

It time to go to bed to rest body

Yayira:


If care is not taken some people will continue from where those trapped investors stopped.. lol continue being trapped..

Yayira babe, to get trapped with you wouldn’t be a bad idea

Most of this companies might not depreciate to 1kobo, instead of that the management might prefer to mop the shares themselves. Anyway we shall all see how it will go