₦airaland Forum

Does anyone know what is going on with UBN.

I just learnt about a system flash report from bloomberg that states in a one liner that UBN may be on the verge of been acquired!!!!. Nov 28th.

I will let u know as soon as i have more information.

aktopgun:
i haven't said much in a little while but i've been following the trend closely on this thread and i am really worried speculators are becoming distracting and feeding the unfortunate hunger or should i say greed of young investors.
we are all here trying to share info and learn as much as possible to make informed decisions and take the proverbial "calculated risk" with our resouces.
i am always one for expressing your opinions freely but do not badger impressionable, less experienced investors into taking your advice or suggestions. put forward your arguments and reasons for thinking the way u do and let the other party make their own decisions.

this thread has and continues to be a wealth of information and learning. it is a real credit to all nigerians. lets keep it that way!



lets keep it clean, informative, productive and wealth producing as it has been in the last year (at least up till about 3 weeks ago anyway).

enough said,
lets talk money brothers.

anyone got any any insights into why firstbank is doing so well?

Good day Gentlemen.

I have not contributed in a while, but i have been following the thread steadily. I am howver compelled to write to find out if there was a vote to appoint prefects in the house to weigh comments made by different people. One of the the things i enjoy most about this thread is the widely divergent outlooks. This varying perspectives and the ensuing dialogues is is one of the things which may not be obvious to many but has kept this thread growing.

Let everyone come and contribute "the villifed speculators " and the self righteous fundamental investors". All of una. I beg let us hear word. Varying positions (speculators, shot-timers, medium timers, long-timers) all together make the market.

FAtherOF2, i enjoy your no holds barred approach which i know may have gotten you into trouble a few times, Pumping your obsession for fundamnetals provides a healthy check and balance.  However, i have learnt a thing or two from u guys and other people in the forum.

It is beyond anyone paygrade here to be cautioning on individual's styles and approach to the market.

So to the "self righteous lets keep the thread fundamental analysis focused" folks. Read the thread, take what you need, junk the rest and resist the urge to talk down on anyone's style.

Hi Guys,

does any one know if FBN has started or when they will start to return the monies of people who were not allotted any shares. The market needs the money.

Guys,

We have not seen anything yet ooo. I read today in the news segment of the nigeriansecurities website about govts proposal to fund their cashcalls through finacing from NIgerian banks. Can you imagine what $10Billion in a loans provided by Nigerian banks will do to the income of all this banks. I have had people ask me where the income of bank's raising this huge sums will eventually come from. There you are.

As regards insurance, i believe this is the time to buy insurance shares. They do not have a choice but to shape up to take advantage of the local content policy that forces multinationals to cede currently about 40% of their insurance needs to local companies. The plan by govt is to get it to 80%. Jimoh Ibrahim willsomehow eventually settle for something that will not disrupt the sector. So much is at risk for the rule of law to take its course here. It is what they call here in America "Matters of National Security". An Uncoventional
approach to setllement may be resorted to here.

UNIC

Unic has some serious technocrats who understand insurance. They are at this time refocusing and working hard in their pioneer status in the health care insurance business. They are taking a deliberate approach in building life, health and oil /gas portfolios.

wanaj0:
yet to see Costain prospectus but I will go with FCMB. Cosntruction is not a high margin sector. I know they are diversifying into Furniture but still, not convince about the margins. Hype is what is pushing them up.

CAPL, made a lot of money selling assets. So, don't base your long term projection on last year and this years result.

Flour Mills is good but I will root for BAGCO. The margin is wonderful.

Longman is good but not for the long term. They are so susceptible to changes in government education policy (that changes too frequently for me)

BETA glass is returning back to profitability but the competition is high and the market environment is changing. Will not hold them for the long term.

Dangote Sugar is currently fairly priced. Will go for it for the long term. Just hope Dangote will stop this quarterly dividend payment. It is affecting the price too much!!!!

Wema, definitely not for the LONG term. It is a prme candidate for acquisition.

I don't BUY mostr offers. I don't get carried away with the hype. Being in the market LONG enough not to make emotional decisions.

Your comments about Dangote is the more reason why we should expect a shocker. A 4 for 1 is all it needs to take it to its rightfull place

Guys,

I am in deep suspicion of Zenithbank. A record was broken last week in the speed at which their results were announced and their shares placed on technical suspension.

I read the article on zenithbank on www.nigeriansecurities.com which underscored this. Like the writer speculated, could they be in the market to secure funds to buy another bank. Also a lot of the shares is a rights issue. What does Jim and his fellow shareholders know that we dont ooo. This was just too quick

If this was the case i wonder who the banks they could buy are. WEMAnians on this blog  beware (just kiddin, that may be more reason you should hold on to your stocks, if that was the case.)

I know that such a time would come when the much talked about second round of market induced consolidation will start. If large banks like AMRO are being bought, and a bank with a somewhat profile similar  STB of those days which acquired UBA to begin a great success story, why will Zenith may not be thinking on that approach.?

Hello guys,

I had to take a short time away to fine tune my year end buying strategy. I see that a lot of water don pass under bridge.

Guys Dangote Sugar is the stock to watch for the following  reasons.

1.  its near future EPS is over 2.65 (compare the price with other stocks that the market has bidded up at about thesame expectation of earnings; Zenith at EPS expectations less than that a few weeks ago was bidded up to N65 , it is now at N46, 7up with earnings expectation less than dangote is at N45, see other stocks in this category on the nigeriansecurities website.


2. We know for a certainty that they are doubling capacity in the next few months (infact work is almost complete on that)  hence doubling revenue and possibly PAT, assuming this is the only growth that occurs, EPS will no be less than N5.2 sometime next year. Their contemporaries  that have about thesame earnings potential (EPS); FLOUR MILL at now 73.00, AP at N84, OANDO at N78.92

3. They are opening two new factories in Ghana and Angola (an economy which is expected to grow 31%). This will also increase revenue and possibly PAT

4. There are feelers that Dangote Sugar may likely give bonus shares. I will not be surprised cause in my own opinion asides the reasons that may be responsible for those feelers,  the man knowing that people feel they know what to expect at the end of the year may likely trump people by doing this.

The man has also been quoted in his assurance to investors in his sugar business that this stock is a $1 stock. Even with the dollar out in the cold, this is still over N100


My personal expectation is this,

Projected PE for their year end this Dec is as at today 13.21X  (source;my calculations, IBTC report,          nigerinasecurities.com)


Projected PE for nestle in thesame industry is 24X


so if dangote at PE      13.21               equiv to       N35.00

assuming that nestle which shows a comfort level of trading at 24X in thesame industry
an inference we can draw is that given the right conditions as shown above, the market can bid
dangote up to    24X.

The question nowat 24X, what will dangote's price now be


Answer = 35/13.21     X  24  =  N63.50.
This is the amount thesame people buying Nestle now are potentially ready to push dangote to in its first lap.

Angel Lily:
Please i'd like some info on investment in stocks and shares, how to choose, buying and selling of shares. im really interested

Start first by identifying a broker and setting out a sum to invest initially. I think a hands on approcah is best to sustain interest and to drive ur quest for knowledge. Once u state in the forum that u have done this and uo are trying to determine what to by. I can assure u , u will be inundated with ideas

[quote author=omo_boy link=topic=31554.msg1635965#msg1635965 date=1193838460]Guys,

which site do you use in getting current NSE trading activities?, The ones that I use (e.g. Punch) come 1 day later[/quote]Omo Boy go to www.nigeriansecurities.com. They have daily positons which they update daily and promptly too since i discovered it about a week ago, In addition,  U can create a portfolio and put in all ur current stocks, the quantity you have , how much it cost u and they will then tell you the daily value of your portfolio.

easimoni,

i see that you are right. I think the guys on nigeriansecurities just did some update on their valuation page. It confirms your own calculations.

Infact they just brought AIICO into my radar. PE of less than 10!!!. I have confirmed that their profit last year was 483,702,000 as reflected on that site. IS their shares outstanding truly 1.7 bill? becasue it is the bases nigeriansecurities have calculated PE and a projected PAT of 512,000,000 which is conservative in my opinion. If it is then aiico looks sweet

I think with their merger with NFI and LAMAK they should be close to 1 billion this year. THose guys are been very conservative in their Projected PAT

Check this out and tell me what u thinkWhat do you think.

easimoni:
The 1st 3 on your list are the 1st 3 on my list. Those 3 all have forward PEs below 16. not bad at all.

Hey Easimoni

By my own calculations unic and and crusader 2 and 7 have the lowest calculations. This is further coroborated by IBTC's calculation of UNIC and www.nigeriansecurities.com calculation for Both. What numbers are u using for instance for mbenefit, crusader law union (ur 3)which brings their PE ratio under 16?

yodiyokun:
@Tonyjon
Where in Canada are you?

As per your question, if you have a time frame of 18 months to 2 years, you are almost sure of good returns on the insurance companies you mentioned.

But the point is, during that time frame could you have multiplied your investment better.

The way things are with Wema, I would advise us to be cautious with this insurance people, because of all this their merger arrangements that are hidden under the table.

If you are doing Insurance, pick one or 2, stick with fundamentals and do not invest a significant portion of your portfolio in them.

The truth is it all depends on your investment objective and outlook.

My 2 CAD

Some of them are great bargains if you are in for the long term. The insurance sector stocks will be trading in the future at prices over 10 naira. We have seen an upward trend with the banking sector as capitalization was moved from level to level. The value investing approach is what i am most comfortable with which is finding what is dirt cheap compared to peers and buying while waiting for the market to correct itself. I have been able to reduce my burn rate to almost nothing with this approach together with other considerations such as liquidity and corporate governance.

As regards the list , Unic and crusader are the cheapest at todays prices going by forward projections of what there PAT will be and consequently their earnings multiple. However consider this in light of other things such as ensuring no shocker such as intended payouts are not sitiing on theri books. I go to the extent atimes doing a sampling atimes of major conglomerates as to who has the bulk of their insurance business.

in summary , chaotic situations as the case may be might provide the opportunity to buy. i personally like to buy when the market seems to be dumping.

krisbobo:
just saw that Unic is recomended for a buy in the valuation section of nigeriansecurities.com. Please gurus is there something coming up there?

thanks
P.S
my questions above remain unanswered!

Krisbobo

Yodiyokun is right.  Ultimately your investment decision should be based on your personal decision to buy or sell at any time.  The recommendations by analyst in this companies should only serve as a guideline. What it does for me is it reduces the lenght of time we get involved in crunching numbers.

I use IBTC reports to get a general pointer in the direction i will be looking. If nigeriansecurities keep what they are doing up, they seem to be a good source. What i used to do before which they seem to have taken care of for me is the detrmination of forward PE ratio averages in a particular sector so i have a general idea of how the specific company i am looking at compares in its forward PE ratio to other companies in same sector.

Let me give you a particular example. Take the insurance sector for instance has displayed at the nigeriansecurities site, the average of the insurance companies  listed is 24.24. I would think this way if the industry can bid up insurance sector shares to an average of 24.24 earnings multiple (PE) and  say a cornestone ins to a PE ratio of 29.58, then a company like UNIC or crusader from thesame chart still could do some climbing if their is suddenly a positive outlook that gives the impression that they will meet or surpass the analysts projection of PAT at their next financial year end (This is cos they have the lowest earnings multiple based on projections so far and could get bid up to 24 the avaerage).



e.g

UNIC today is N2.47    PE = 15.59
The question is for it to trade even at that  average PE of 24.24

PE of 15.59         is equivalent to                 N2.47
PE of 1                is equiv to                         N2.47 /15.59
PE of 24.24   will therfore be equiv to         N2.47/15.59 X 24.24  = N3.84


The interpretation is that in a situation where the market follows a trend

UNIC has the potential to be bidded up to N3.80 which will result in the PE of 24.24 for UNIC , which is also the sector avarage


This approach applies to any stock in any sector in determining when to buy and when to sell. I try to pick shares that are not priced well which is what this application of the PE ratios help u to detrmine.

You will now take this information and determine together with other factors such as what we talk about in this forum, news etc to determine if this is a buy or not.  


For a better understanding of the PE ratio and its applications, i have another posting i had written asometime back on this thread it

I hope this helps you to understand how to use analyst reports better

Iwerebor,

i retract my statement then. I just don't like people including you been dissed particularly when the assault borders on assumptions of ignorance of another individual. I have made mistakes in learning the ropes of investing in NIgeria. I wish i had a forum like this to exchange ideas when i first started. That is why i am a bit passionate about keeping the good that is happening on this this forum going on through encouraging everybody and contributing my widows mite.

You are apparently a good guy , only good guys realize theve made mistakes and apolgise.

Lets continue to empower one another.

What do you think about dangote considering that it is cheap compared to its peers in the Fodds and beverage sector and their plan to both double capacity in the coming months and open up factories in the coming fiscal year in Angola and Ghana?

Iwerebor,

I think if nothing, one of the things we have learnt from the usefull  non-condescending contributions so far before you joined, is that anlyst opinions and buy recommendations are theirs and not necessarily ours. For a lot of us here, we use it as a pointer as to what we may look out in the future and not the absolute fact in making a decision.  This forum  provides us the opportunity to table such recommendations determine the merit  from usefull contributions and then go again to indivually do due dilligece before making the decision. I don t hink there is any resource out there including my brokers and IBTC reports that i follow well that does not warn you about the the objectivity of their buy and sell recommendations. By the way IBTC which i use has WEMA as a Buy buy, as at their last posting. I will not call them or sue them for such if i bought WEMA as a result of that ssuming i lacked the ability to make my own buy decision.

Please dont call people names here because the internet obscures your identity.

If you really have to be negative and i understand that some people cant resist the urge to be jerks. !Find the jerksconsortium blog!

FOR MY PEOPLE WITH WEMA

For people who have WEMA. In the short term it may look bad now, but you have a stock with good forward earnings potentials and it can only drop so low. If i were u i will not get out now but reduce my exposure by buying more when it bottoms out to reduce my exposure. The market will reprice it in a short while now that the bad loans and the liabilities on their books are largerly gone (subject to confirmation).

The key is not to panic, this seemingly short term mistake might turn out to be a medium to long term bumper harvest

Motai,

Your idea of buying insurance may be good. But please buy a company with good corporate governance and cheap relative to others in view of all that is going on in that sector.

AIICO or UNIC is not a bad buy. AIICO moreso because their results at the end of this year will be that of three insurance companies in one, (NFI which was delisted earlier on in the year and one more i don't remeber now). I think the analysts  at www.nigeriansecurities.com are been cautious as in estimating the Projected PAT at 250M. I expect it to be more than that thus bringing the PE ratio well under 20 to make it attractive fundamentally together with UNIC and Crusader.

The average for the companies listed on their site is 24.75. This of course is not the industry average. They have just the average for the companies they have in their valuation sheet. I don't know the criteria for which those stocks were selected. I am just glad that there is a reference point i can use.

I hope they can maintain and keep this resource available They howver seem to be intent on doing this as they have been responding to inquiries well by mail

     EXPALNATION     EPS & PE RATIO

Motai

THE EPS, which means Earnings Per share is the  earnings per unit share . Imagine a company makes 1000 naira. If the total shares in a company are 2000 units, then EPS is 1000/2000 which is 0.5 (50Kobo). This means this stock has an earnings per share of 50k. The company may then decide to pay this 50k per share a dividend of 15k. The rest go into all kinds of reserves, and some may go to service debts etc. Therefore we can say it is the total earnings on a unit share before other considerations such as debt repayment, reserves or expansion expenses etc. THE AGM meetings is usually called to ratify the allocation

The PE ratio which means price to earning ratio can now be  obtained by dividing current price of the stock divided by the EPS. THE PE ratio shows you the number of years it will take you to cover the cost of the price of the stock at the EPS you have obtained assuming the company does not grow. Note it is important that the consideration here is if the company does not grow, i.e it makes exactly thesame profit as it has made now in the following year. Assuming a 50k or 0.5 naira EPS, if price of that stock is 2 naira, then pe ratio is 2naira/0.5naira=4. So if u buy the stock at 2 naira, it will take you 4 years at a yearly earnings of 0.5 naira to make the 2 naira that it cost u to buy the share if u were to buy it now and assuming the company does not grow.(A company always grows though)

The EPS and PE i have described in this case is called the trailing EPS and trailing PE ratio. They usually dont mean much to a prospective investor. What you want to determine is the Forward or projected EPS and the forward or projected PE ratio.

YOu simply calculate this by dividing in this case what analysts have projected as the future PAT factoring growth potential if there is any, divided by thesame outstanding shares. YOu then obtain projected EPS and then dividing price by this EPS you get the projected PE. (EXAMPLE, using that same company that made 1000. Assuming it is projected that they will double their profits it means that potentially their Projected EPS will be 2000naira divided by remember their outstanding shares which is 2000units. EPS now is therefore 1 naira  (i.e 1 naira per share). LEts us backup to the past again. in this scenario

You can thn use the PE to help determine what to buy and what not to buy. What is cheap and what is not cheap by comparing it to other companies.

For instance if you look at that new site  www.nigeriansecurities.com and you go to thier valauation page. Take a look at the banking sector shares. They have very accurate data. That is not to say that ther advise to buy or sell should be taken without you doing due diligence.  Howver they have shown that the avearage PE for the banking sector shares they have listed is 27.67. Diamond bank is much lower  at about 16 meaning  and so it definitely is cheaper than the average. Sorry i forgot to say the lower the better.

WEMA bank at 17.19 is also cheap considering the average. You take this information and factor in other things such as liquidity and others to determine what your ultimate pick is.

look at the building industry on that same site you see that WAPCO is the cheapest and has the best value for money at a Projected PE ratio of about 15 compared to its peers.


HOMEWORK

Take a look at the valuation sheet on that website www.nigeriansecurities.com

which is cheaper stock?

UBA OR FIDELITYBANK

NESTLE OR CADBURY    

pumping777


pumping777, i suspect you have something to do with this people who have done this terrifc job with all the facilities available on their website www.nigeriansecurities.com. The quality of the work reeks with you. The so called improvements you mentioned earlier about formatting number and other issues have been taken care of. Tell us the truth. We will support this initiative because meeeeeeeeeeeeeeen, your contributions to this forum has been invaluable

alanbolo.

check the valuation page on www.nigeriansecurities.com. They will have it there

TFLOW

Do not be discouraged at your one experience in the market. I have been involved for a while and i have made and lost money in the short run. What i have not done is lost money in the long term. it took me a while to determine that VALUE INVESTING was the way forward.

Value investing essentially seeks to identify stocks that are cheap relative to its peers. There are some basic tools for determining this of which chief among this is the PE ratio which is a function of the earnings per share of a stock. Do a search on this topic and understand well. Use this together with other factors of which another important one is liquidity (volume of the shares trading daily- the higher the better) in detrmining what to buy. try to have a medium to longterm outlook and let the short term outlook be based on opportunities arising.

A good site that i just subscribed to that has tools to help u do this complete with graphs and a portfolio manager to help uou manage and know the value of ur portfolio at any point in time is www.nigeriansecurities.com.

All the best

D-DOTS,

check out www.nigeriansecurities.com. They may already have the info u need. They sure have a lot of data available once u subscribe. I use them for monitoring the value of my portfolio and also their graphs and valuation page for determining my fundamentals.

Though they seem conservative as the PE ratios of the companies already factors in the potential shares allottment all the people with recently concluded IPOs or are concluding right now will have at the end of the exercise. I like that.

15% off WEMA is not bad.

I always tell people to determine their exit price before they even go in. Long throat however is a tough one to overcome so i commend you wanaj0 for exiting with your hat in your hand on that WEMA transaction.

Predicting the market is for the guys with the crystal ball. That is not my league .I just prefer to go by what is cheap (considering the fundamentals) and liquid relative to its contemporaries in thesame sector. You cant go wrong if you walk the path of a value investor. The growth investor path is rife with booby traps.

Kpineao

You dont want to bail out of NASCON prematurely at this time. What i told a freind of mine who got caught up in the hype of NASCON's one day PO is to reduce his exposure per share by buying more at this time since the stock seems to have sstabilized at 14+. He is buying a little more to reduce is exposure per unit share from N22 to N17. That way you are not waiting for N22 to break even . At N20, you can exit with a profit.

My own two cents.

Guys i think it is too early to panic on oceanic. There is time to ride it to a profitable end. Unfortunately this ride is for people who bought in the secondary market. I also bought in the primary and later picked some a few months ago.

Dont forgt that intercontinentals outstanding shares rose astronomically when they listed thier shares but did not impact price that much. It is even on an upward movement now