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Aj8's Posts

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Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 7:04pm On Dec 01, 2023
robobo:
.

Hello Chief

what would you term a good dividend payment history?
is it only in terms of amount? or it is in terms of % of EPS or terms of comparison to peers in the same industry? or in terms of years of unbroken payments? or in terms of growth to the dividend being paid?

would appreciate if you share
The average of the last 2 dividends x 10 comes very close to the peak price before the declaration of new dividends in anticipation that the new year's end should at least meet the previous year’s yield if the EPS has been surpassed or met. This is true for most of the banks that average a yield of 10% assuming the shares were bought just before the declaration at the peak price before declaration. That price should climb after the declaration to reflect the yield and prospects of the stock. For example, Zenith Bank pays about N3.50 on average which x 10 gives say N35.00. This price would hover about this price till new prospects emerge, then the climb. Notice also the price matches the last organic EPS x 4 ( adjust without the variations induced by the foreign exchange valuations). Same for UBA, GTCO, etc. You can cross-check, and notice they would roughly come within a Neighboring range of x4 eps-x5 eps or x10 dividends. The companies however with huge FDI yields average about 5% so best to use dividends x 20 approximately…. e.g. Breweries, Oil and gas, conglomerates, MTN, Airtel, etc. I only buy these stocks for price appreciation once the price shows it’s well below a price commensurate with a 5% yield e.g. NB at current price and sell off once it attains dividends x20. Holding such a stock till dividends would mean you have settled for a yield of about 5%.

In other words to put it simply… if sentiments anticipate a 5% yield meaning that those invested in the stock are happy with a 5% yield, then the price would reflect 5% but the earliest investors probably got the stocks at a premium. earning far more than the new investors e.g. Seplat. , NB, Guinness, etc. since they bought at prices far much lower in the past.

So check the average yield in the sector. That should help. But 10% for banks. (EPS X4 or dividends x 10 most times reflects the target price before new EPS or dividends) .

Would be happy to apply the calculations on the next report of a company with a good yield so you appreciate it better.

Hope this clarifies it a bit better.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 3:19pm On Dec 01, 2023
kalkah:
@AJ8, Kindly explain the calculation. I want to learn. Thanks
My Common Sense entry point :
Buy if price of stock is well below 80% of 4xEPS FY estimates to guarantee at least above 20% gain in the investment . The 4x EPS FY will become your target price and the range if still strong could be 4xEPS-5x EPS. provided the company has good Dividend payment history within the sector. If the Dividend payment is very poor, aim at 75% 0f 4xEPS as target price meaning you would have to enter even lower ( that’s at least below 80% of this target). Review targets as new EPS come in. Use only EPS that’s organic ( I.e based on pure corporate sweat).

REMEMBER TO INJECT DUE DILIGENCE IN EVERY PICK ESPECIALLY WHEN CURRENT PRICE IS ABOVE 4 X EPS.

Consider these hypothetical examples below:

1. A company released Q2 half year results at say N5.5 but is currently sell at N18.00 . Dividend payment is adjudged good. My target would be N44 and range N44-N55. I would buy.
2. A company with a full year results EPS of N1.05 currently selling at N1.00 should rally quickly to N4.00 if with good or improving fundamentals . I would buy and target exit at N4.00 except new EPS suggest otherwise.

3. A company with current price at N60.00 but EPS of N2.00 is not a buy for me as 4x EPS is only N8.00 . It remained however good for those who bought it earlier at less than N8.00 .

REMEMBER all strategies were derived at a point in time. This works for me and keeps my losses to a minimum.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 10:25pm On Nov 30, 2023
aj8:
Off loaded Betaglass. Targets reached. Beta glass Likely to drop back to N44.00-N48.00 range. I bought NNFM today @19.95 . Target N40.00. UBA reappraised since considerable potential upside.New target is N24.00-N31.00. Holding on.
NNFM target is close. Will offload once it attains N40.00 . A price above N40.00 though possible , will not influence my holding on to the stock. I will only consider re-entry if EPS for Q3 is above N8.00 but will re-enter only if price drops below N25.00.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 9:02pm On Nov 25, 2023
BabsO2:
Do you think the revenues of banks in 2024 will be lower than that of 2022. Because that is what needs to be compared, as 2023 forex gains lies more in comprehensive income and should not be used for operating EPS and PE calculations as they are one off from currency translation gains in Naira. 2024 EPS will still be substantially higher that 2022 levels, hence supporting upward trend of bank share prices apart from the support of stepped up BVPS numbers from the 2023 gains.
Revenue will increase but EPS will decrease for a few years and consequently, price will fall. FBN's current price rise indicates the most likely trend to come ( you can refer to my last post on this). Many big banks could issue bonuses as part of their strategy and small banks merge with big banks.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 12:54am On Nov 10, 2023
yMcy56:
FBNH
Sighted @20!
The aggression with which these billionaires are buying!
In no time, the elephant may overtake UBA..... smiley

* STANBIC heavy cross deals.....
Over 91M units crossed.......with N6B+ staked on it...
The only thing that can explain a FBNH price beyond N20.00 is a bonus. Can’t see them paying N2.00 dividend. And, even if the are to pay a dividend of say N2.00, the information will not be known yet by big money before the end of Q4.However, the need to widen the base may have already been raised about now. But I could be wrong. Probably makes a lot of sense for the big banks and a bellwether of what is to come. I am only speculating.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 2:04pm On Nov 07, 2023
essentialone:
I have a feeling which is sentimental anyway . I believe many of the Banks might not want to pay the huge Company Tax of 30% from the humongous profit that will run around half a trillion by year end 2023. In my personal thinking they will buy more of their shares , then declare a huge dividend to escape the huge tax liability of 30% . The money will come back to them via dividend payment. The tax liability would have been reduced from company income tax of 30% to 10% of withholding tax .

My personal thinking anyway , so we are likely to see more purchases from them.
Dividends are paid from net income ( Profit after tax). Can’t really see how this could be of help. It’s not the company buying back but directors/ insiders trading. I think the surge in insider interest indicates an improvement in UBA’s dividend policy. The market has already priced in a dividend of N2.00. For any insiders transaction to be rational, it should outdo every other options currently available to the insider, which I believe is about average of 15%. Based on the foregoing, I feel the company may well pay minimum of N2.50
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 12:50pm On Nov 03, 2023
shocked shocked shocked
What is happening!!!

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 12:45pm On Nov 03, 2023
Locotrader:
We are firmly repositioned and waiting for the bears.
My target is UBA.
Let the bears be fast biko
Wait for the next volume price dissociation to buy.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 10:19am On Nov 02, 2023
A small homework away from Biology. The intentions of the big traders or smart money are embedded in large volumes and the immediate follow through volumes . Note the prices circled in blue . You will discover something very fascinating. Below is the chart of recent historical volumes of UBA. 10 marks. smiley wink

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:54pm On Nov 01, 2023
yMcy56:
You did this FX analysis even before now and FBNH has the highest FX gain if I still remembered very well.


Your July 24 post below:
Peruse Note 9 of UBA Q3
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:47pm On Nov 01, 2023
yMcy56:
You did this FX analysis even before now and FBNH has the highest FX gain if I still remembered very well.


Your July 24 posts below:
Yes Mer+y, but remember that the banks that have significant offshore presence i.e do banking also abroad, earn foreign income/interest and the conversion of such would boost the income profile. Moreover it would equally buoy the prospects of sustainability in these hard times. That’s my take.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:37pm On Nov 01, 2023
vacanci:
e be like say na FBN shares u load very well.
Nope. But I find the mathematics in all this quite intriguing.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:29pm On Nov 01, 2023
BabsO2:
Are you saying FBNH understated FX gains. That more gains will be delivered in FBNH full year than currently reported in Q3. While UBA already reported the all z gains and by full year FBNH FX gains will exceed UBA gains.

If so that could explain the rally in FBNH, as some vested money bags mop up available offers since they know the value. This will make them also mop the rights in full.
To understand what’s happening you need to peruse UBA’S report. Check Note 5. Expect even more of such for FBN
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 11:40am On Nov 01, 2023
yMcy56:
FIRST BANK
What's behind all these heavy queues @19?
Is First Bank getting set to give UBA some good run?
Well, it once did by overtaking UBA and ACCESS......and went ahead of them in terms of share price value.

The forces behind each one will speak volume

We are watching....

*MANSARD closing in on Custodian

* AIRTEL @1694!!



Closing the gap with SEPLAT........while Seplat too is not waiting..
UBA and FBN have significant offshore presence and hence earn foreign exchange via interest rates abroad. FBN likely to outpace UBA’S foreign exchange earnings by about 20%.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 10:27am On Nov 01, 2023
Streetinvestor2:
This market they funny. Do you know for long I was trying to sell nnfm at 16 plus no deal.It was after yesterday full bid I decided to check out thr result and was surprised at what I saw.Though my unit na afolabi unit and the same with ikeja hotel.
Then what is wrong with flour mill.Thr results have not been impressive
Is the market funny or does it just respond to anything new…called NEWS.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 3:06pm On Oct 31, 2023
aj8:
I have the following on my buy list based on my Common Sense Entry
Wema bank entry point below N5.00. My Target 6.5-8.00
Berger Paint entry point below N10.00 . My Target N12.00-15.00
Betaglass entry point below N35.00. My Target 48.00-52.00-60.00
I sold Nestle Friday. Buy back if below N350.00 grin grin grin Will review if new data comes in.
My UBA target still N19.00 . Will buy more only if it dips below N12.00. I Expect it to have the most Blow out income statement for H1 of the banks based on their Foreign Currency Translation Reserves.( Second highest FCTR (N40bill plus) after First Bank’s (N50bill)


Please do your due diligence. Above are my Common Sense Entry Points.
Off loaded Betaglass. Targets reached. Beta glass Likely to drop back to N44.00-N48.00 range. I bought NNFM today @19.95 . Target N40.00. UBA reappraised since considerable potential upside.New target is N24.00-N31.00. Holding on.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 8:52am On Oct 31, 2023
Other Common sense targets are as follows

UAC….N16.00
CUSTODIAN…N10.00
LINKAGE……….N1.00
WEMA……………N8.00


Based on my common sense strategy. Please do your due diligence. This is not an investment advice
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 8:43am On Oct 31, 2023
My common sense target for NNFM is N40.00

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 8:37am On Oct 31, 2023
My common sense price target for UBA

N24.00-N31.00
Dividend estimate N2.00-N2.50



Based on my common sense strategy. Do kindly do all Due Diligence. This is not an Investment Advice

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 10:46am On Oct 26, 2023
onegentleguy:
A lot will depend on your entry price and what trade-setup you had in place (plan) in view of your investment personality and objective.

If you've met your target, especially if you were among the early birds (ref: N2 to N6 entry) , you might want to reduce your stake by 40-50% and redirect the funds to another more value accretive asset. (we already highlighted some of them here)

I remember advising some folks (privately) to reduce their stake in UCAP and put the funds in UBA/ACCESS (60-40% portfolio weighting in favour of UBA), DS/NASCON, OANDO, WAPCO and CHAMS (still trading at the support/demand zone of 85-90k following the retracement from previous YtDH of N1.3+ at the time)... and I think they've been better off for it.

This is one of the reason I always refer to portfolio weighting with stock selection and fund allocation. The goal should always be to seek to earn more at any given time.

Even with fundamentally healthy coys you don't necessarily need to hold for too long, especially if the asset has achieved/delivered a great reward margin or where the gap between potential return and projected risk has reduced compared to other select healthy names. (ref: assets intrinsic value leaves less MoS compared to CMP)

You can always rebalance your portfolio by allocating some funds to assets that can do better.
UCAP is still trading at a slight deviation from intrinsic value. (ref: FVE @ 21.9) but any jack will agree that there are of course a few better choices right now.

Btw, there are rumors that there could be a potential bonus distribution for YE, 2023, hence my advice to sell only 40-50% of your holding. And depending on the asset price, I will look to exit the balance of 50-60% before or after their YE, 2023 report.
Like I always tell folks; A bonus issue is often a measure that replaces QUALITY with QUANTITY and until you can establish that that quantity is also of good quality, be cautious.
It's like a man who offers to gift you with 3 apples in exchange for the 2 you already have OR buying it off completely for a cash consideration. On the surface, the non-cash exchange might seem of more value, but It'll be better to let him buy it, if the 2 you had is of better/healthier quality than the offered 3. ...especially if there's a high plausibility that the said 3 could go bad in days. (near term view)
In fact, the wider the margin btw previous OS (quality) and post bonus OS (quantity), the more cautious you should be.

Disclosure: This is just me saying what I would've have done having a stake in UCAP.
NOT an investment advice. Due diligence still applies as always.
Good advice. Thank you.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 7:43pm On Oct 17, 2023
Mfunkynation:
You are right!
COVID was a situation that happened everywhere!
but currently, what is happening that will make the price to fall back to that level now?
The future is pregnant.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:10pm On Sep 29, 2023
undead:
I am very sad. I lost a lot of money in Oando. I cannot sell my shares. I have a big problem. Don't misunderstand me. I started investing in stocks this year. I bought Japaul Gold, Transcorp, and Dangote Sugar. I doubled my money every time. My 4 million naira became 32 million naira. But now I cannot withdraw even 1 million naira. This is my life savings. I saved this money for six years. Please, what can I do? Ncha na acho e ba efi n'anya.

CC yMcy56, PETERiCHY, Locotrader, megawealth01, Ginalex, Ogg, prophet
Have you heard the phrase “ profit taking” ? There is a world of difference between paper gain and cashed out profit or loss. You have no claim to a profit or loss till you sell. N4mill has gotten nothing till you sell. When you sell, then we can compute your gain or loss. There is also a world of difference between girl friend and wife. Yes, till you marry her. Lesson here is TAKE PROFIT. YOU MUST KNOW WHAT YOU ARE TRADING . But if for dividends then whether the price soars or plunges it’s of no consequence. Not having a clear plan is simply gambling.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 1:13pm On Sep 26, 2023
My take.

The key thing is never buy chicken without checking the weight. That’s simply valuation. Don’t buy any stock with price above the ideal for its weight/value. And , even after buying, sell once it’s start losing weight or likely to lose weight. Monitor your investment. Check reports, follow the news. Profit is profit whether 10% or 100%. Determine what appeals to you, hit it and leave the queue unless you only care for dividends. And even with that, be ready to jump ship when the future prospects become not so certain.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 6:26pm On Sep 14, 2023
With all the complaints about some stockbrokers, I think I can rate mine high. I have been with them for a little over 14 years without a single adverse incident.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 4:17pm On Sep 12, 2023
aj8:
I have the following on my buy list based on my Common Sense Entry
Wema bank entry point below N5.00. My Target 6.5-8.00
Berger Paint entry point below N10.00 . My Target N12.00-15.00
Betaglass entry point below N35.00. My Target 48.00-52.00-60.00
I sold Nestle Friday. Buy back if below N350.00 grin grin grin Will review if new data comes in.
My UBA target still N19.00 . Will buy more only if it dips below N12.00. I Expect it to have the most Blow out income statement for H1 of the banks based on their Foreign Currency Translation Reserves.( Second highest FCTR (N40bill plus) after First Bank’s (N50bill)


Please do your due diligence. Above are my Common Sense Entry Points.
UBA is not your mate!!! Let’s hope it’s a turning point. The 50k interim signals the willingness to change their dividend policy.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 12:49pm On Aug 16, 2023
The Good the Bad and the Ulgly; the optimists and pessimists, all help in sharpening our investment mind. Kudos to everyone on this forum.
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 11:19am On Aug 04, 2023
Godisfaithful:
For those looking for bargain in Nigeria Stock Exchange market, be patient. There’s no need to rush to buy anything for now…let the trade comes to you. Don’t chase because panic selling going to set in soon. Patient…
Panic from what?
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 7:46pm On Jul 30, 2023
I have the following on my buy list based on my Common Sense Entry
Wema bank entry point below N5.00. My Target 6.5-8.00
Berger Paint entry point below N10.00 . My Target N12.00-15.00
Betaglass entry point below N35.00. My Target 48.00-52.00-60.00
I sold Nestle Friday. Buy back if below N350.00 grin grin grin Will review if new data comes in.
My UBA target still N19.00 . Will buy more only if it dips below N12.00. I Expect it to have the most Blow out income statement for H1 of the banks based on their Foreign Currency Translation Reserves.( Second highest FCTR (N40bill plus) after First Bank’s (N50bill)


Please do your due diligence. Above are my Common Sense Entry Points.

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 9:20am On Jul 28, 2023
Market may react positively to this credentials

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 9:16am On Jul 28, 2023
Ministerial list 1

Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 11:26am On Jul 24, 2023
Popson92:
How do you check the current prices please?
#
I am not sure I have understood your question but if you meant what is today’s current price, I suggest you check on the NGX platform with your stock broker. However, if you meant how I deduce the My Common Sense Entry Point, I would just say..COMMON SENSE based on what the market is doing which is a function of expectations of those buying into it. Call it support and resistance but really in a layman understanding it’s the meeting point of demand and supply. Think in the same line as one buying crayfish from a market less on TA .
Investment › Re: Nigerian Stock Exchange Market Pick Alerts by aj8(m): 11:07am On Jul 24, 2023
yeddy99:
How do you reconcile figure of almost X4 when naira only did approx X2?
Also note that the X4 accommodates the initial sum. Without the initial it would be a ratio of 53.667:156.495=2.9

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