₦airaland Forum

yodiyokun:
That is why I will not buy it. But my husband will not let me rest if it should cross N12 peren

That's probably the right decision. Those you us who bought around N4 can wait it out. At N10, that's a different ball game.

@ Shig, sure if Costain does a PO/rights, it  will dilute the value we are projecting. Then again they will surely bid up the price (a la Fidelity Bank) before freezing it. If you like it, buy it. Until they formally apply for the PO, it's all just gist.

Tmoni:
good news on ACCESS,

AT FORUM MEMBERS, at what time do you think we should exit ACCESS,

not going to get the DANSUGAR bug BITE me again

ON the day it stops gaining 5% daily. That means the pent-up demand has been satisfied. We go watch am together! My bet is on 27.

yodiyokun:
I no sabi for WEMA ojare - its btwn the devil and the deep blue sea. IF we wait for financials be4 plugging in and the results are good - it will be too late then to get on the bandwagon. If we get on now and the result isnt impressive -------na loss be that ooo

Welcome to speculative investing! You must hold liver well well!

Costain = 159.9M shares
Berger Paints = 217.4M shares.

Let me know what your calcs come up with.

shigidi:
@ easimoni, i asked you about costain earlier but you didnt answer.
what projected eps do you have??
and the same goes for berger paints . why do u see it doubling over the next year. please holla.

Must have missed it.
Forward EPS for Costain is N2.90 and I think it's conservative

Berger paints should have a FY EPS of 60k and should be ~75k by this time next year. I'd think it should be worth 12-15 by then. More if they do have the aforementioned contract (I have not done much digging).

damoche07:
hi gurusapologise for breakin the flow of your conversations.

don't mind my layman question please. BERGER has won the contract for the lagos state mega city as the official paint. is it true?if true,would it be advisable to buy into them now or later.remember the ascent of costain(WA) over rumours of contracts.


Dont ignore me abeg.

I was going to ignore you until after I bought mine but . Berger PAINTS is a very very sound stock. Current PE is 14, Forward PE is 11, should double in price over the next yr. With good contracts, you'd better get in now before it translates into results.

yodiyokun:
Costain closed at 20.99 today, Its on the upward move, If it continues like this It may hit a new year high.

I think WindyWendy, said somewhere she bought into it and made huge returns. I wonder if she has a copy of their last financials?

That girl too much.

RoughCut:
21M shares of WEMA bank were traded on the NSE just today there is serious and heavy speculation going on here. This is a bank whose EPS is 0.08(one of the lowest in the sector) and EP Ratio 119(highest in sector) and yet the share has appreciated by about 47k today. Talk of a classic case of market irrationality!
Somebody knows something that we don't or at least i don't

Wema's numbers look much different if you project instead of looking at the outdated statements. Sure the current fundamnetal look like utter rubbish but if you consider what most people believe the unreleased results to be, Wema could easily have a trailing EPS of 70K and would become the cheapest bank by far. The MD promised results would be out by November. If that's true, you'll see the most dramatic shift in fundamentals a single announcement can have.

I own a lot based on the potential.

If you know how I've been kicking myself for missing this one. Been so focused on banks over the last year that I've taken my eye off several gems. Quick math projects Costain to N40+ by mid 2008 (just look at the forward PE). There isn't much to go on but what there is sure looks promising.

MT:
@Easimoni,
Thanks for your comments, but how did you calclutate the earning growth rate and the forward PE in the above example? Please you can use my previous example as an illustration

PS:- We still await the other Gurus contributions , likes of Shigidi, frankriri etc

Earnings growth the the fine art of investing. If a company makes N100M in 2006 but makes N75M in the 1st quarter of 2007, do you consider the 75M as an aberration or a sign the company will make N300+M this year? If you choose the former and the 2,3 & 4Qs go back to normal, the company will make 75+25+25+25=150, if the latter, then you have a 200+% growth rate.

If the company has 1B shares and is selling for N5ea, the current (trailing) EPS is 75M + the earnings over the last 3Qs of 2006 = 150M/1B shares = 15K.
Current PE = N5/15k = 33

The forward EPS (if u believe the company will make N300M) is N300/1B = 30k, Forward PE becomes N5/30k = 16.7

THe difficulty is in predicting future earnings. No one can do it with a reasonable degree of success. Several companies have projected well and done poorly while others have projected poorly and released amazing results resulting in a stampede (been watching Costain?)

MT:
Please I still dey await response oooo

No single indicator is an absolute guide to the value of a share and quite frankly, the true value of a share IS IMPOSSIBLE TO DETERMINE. What we all try to do is predict the price in the future and buy if we believe it should go up and sell if vice versa.

PE is a double edged sword. Let's consider you proposal. If EPS is 1.20 and price is 60, PE is 50. Most people would scream overvalued. What is the annual earnings growth rate is 400%? Next year the EPS will be 1.20 X 5 = 6 and the PE would have dropped to 10 (if the price held constant). Forward PE takes the growth factor into account and should be the basis of an investment decision. For the above example, current PE may be 60 but forward PE is 10. It's clearly cheap going forward.

When the PE becomes too high relative to the growth rate and similar companies, the market tends to sell and the price will adjust downwards. So, we don't like high PEs (ever!) but a high PE could indicate that the company has a lot of potential and people are willing to pay extra to watch that potential become reality.

You should consider a share undervalued when it meets your minimum investment criteria. For ME, a company is undervalued if:
1) the forward PE is less than 20. Last yr I used 10 but the market is more "expensive" now
2) the growth rate is >60%. Lots of high growth companies on the NSE. Why waste my money on a stagnant one?

These 2 rules are for very quick screening. Of course, you MUST consider the issues affecting that industry, the quality of management, competition, profit margins, primary market activities etc.

Ulimately, the market decides what value a company's share is worth. The game is forsee the info the market is mssing before it becomes obvious. That way you can make a buy/sell decsion before the market can respond.

@ Yodiyokun,
WAPCO's mid-yr was 5.746B PAT. Only 12% higher than the same period last yr. With 3B shares, you get a forward EPS of N3.83. At a PE of 20, it has an outlook of ~80 in 6 months.

Ashaka's earnings are dropping and WAPCO is struggling to grow. Not enamoured with cement companies at the moment.

yodiyokun:
Easimoni don't mind those yeye lead .

I asked for crusader last week too na so so talk talk.

My account officer now told me I have re-order everyday if they don't get it at my price.

I no fit buy crusader at 4.75, thats a bit pricey.

What about those of us who bought above N5. As for Lead, "the devil you know" is the only thing keeping me from jumping ship.

yodiyokun:
Chei,

What was I thinking, ?

Wema get as e be ojare, but I am actually thinking of Oceanic and UBA, since their Yr end is september.

Anyone know how many shares of Oceanic and UBA are yet to be listed (from their public offer earlier this year)

Dangote sugar @ 34 dosent look too good , to what level will it appreciate, can it pass 40 , I doubt it oooo.

You've started speculating o!
Neither bank has had shares alloted to them but the offers were for 3.36B Oceanic shares and 1.66B UBA Shares. If you take the 3Q results for both banks, annualize them and apply a PE of 20 (ignore PO shares, they'll likely not make it in time), you get 32 for Oceanic and 54 for UBA, both roughly N1 above today's price. Not exciting is it? You could chose a higher PE.

Upside is the market (as if na person) likes dividends and bonus, so you could score big if they go big. Downside is (if) the results are delayed long enough for the PO buyers to get some of the action. Either way, buying for the YE results is speculative.

yodiyokun:
I missed dansugar and crusader because of my slowness, can you imagine they have gone up about 15% in 4 days. what was I thinking!!!!!!!!!!!.

Thinking about firing my broker. Asked them for more Crusader last week and got no response.  

Crusader is still a good deal at 4.75.

Roughtcut,
regarding the YE 2007 numbers (PAT = N444 and shares = 2.4B), the EPS is 19k and forward PE at offer price is ~20. The YE 2007 numbers you quote don't include the offer shares (prob a fair assumption since the certs won't be out). Anyway, my point is the numbers won't start to look good until well into 2008. Not an offer for short-timers.

touche:
Definitions:

Saving: Making banks richer (they invest your money).

(Wise) Investment: Making yourself richer.

[s]My advice, invest:
-forex trading
-club freedom
-getaway club[/s]

Invest? Yes. In Forex/Club Freedom/Gateway? HELL NO!

Pay your tithe (it is a question of love not "robbing God" if you are a xtian and invest as much as possible in the stock market. Be sure to educate yourself first and be prepared to wait 12+ months for sure returns. Plug into the stock market threads for good advice.

shigidi:
its ridiculous, what is going to be the drastic increase, that was the same problem i had with dangote flour(from 0.42to 1.6) but i have no other choice but to work with these figures because thats what we are given.
fidelity is definetely a no go, maybe from the floor if it drops but not the po.

This is the issue with most of the new POs; very ambitious profit forecast. On another forum, Windywendy wrote a PhD-quality thesis on how ambitious the Dangote Flour PAT projection is. You should read it. The girl sabi  . ROE is projected to climb to 47% by 2011! From 4% in 2006, something is fishy.

Has anyone noticed the deafening silence on the "Scam-Prone Business" child board? I see Seun has returned the board to it's previous place now that they've gone belly-up!

I heard a colleague lost 15M!  Really sad!

[quote author=Atam-Man link=topic=52566.msg1540328#msg1540328 date=1190990359]@All
What is going on with Guinness? It is falling even in the face of a reasonable dividend declared last week. Any answers anybody?[/quote]Probably the love of bonus issues! It may also be due to the general bearish atmosphere at the moment . Guinness is ridiculoulsy solid but unspectacular. IF you own any, don't sell.

Temmie10:
just read the fidelity prospectus.
The bank will have 22 billion shares! and thats if there's no over subscription
And to think the offer was supposed to go at 10 naira earlier, what were they playing at?

Its not cheap o but the psycology of selling something 8 naira when its currently pegged at 12 naira will assure them a good number of people buying the offer, not me.

The FY 07 results are not out yet but if you annualize the 3Q results and compare to the offer projections, they plan to grow PAT at 140% this fiscal year.

realdosh:
Help where and how can i buy NEM INSURANCE STOCKS in private placement.

Please i need this info

thanks guys.

Is NEM doing a PP again? They had an offer last year. If that's what you mean, you have to buy on the market.

RoughCut:
easimoni you don change location to H-Town abi which one be H-Town? well it doesnt matter where you are located as long as you still live and kicking on this forum

Relocated to Houston a while back for a work assignment. Nothing changes!

crazyT:
Thanks Bibiking1 and to other guru's any differ opinions

I side with the Shig. Somewhere in the fifties.

Femtex:
To all the Gurus

Quote from Japaul Prospectus "The new shares being offered shall rank pari-passu in all respects with the issued ordinary shares of the company, except that they will NOT qualify for any dividend or bonus declared for the year ending 31 December 2007." My question is that, since the offer is for 3.95 per share. Lets say Japaul did issue bonus and dividend for the year ending Dec 2007. How will that affect Japaul Oil price moving forward factoring share reconstruction due dividend and bonus issue? Does that mean people who buys into the public offer will get screwed again considering the situation with First Bank.

Yes, they will get "screwed" because the bonus will eat into the margin between the current price and the offer price. No one has a crystal ball to determine if Japaul will indeed issue a bonus but they very well could to discourage people from dumping their shares once they get the certificates. Now that First Bank has opened the door, PO buyers must now sleep with one eye open. Shame.

Femtex, you live in Houston?

[quote author=Rob-roy link=topic=31554.msg1534255#msg1534255 date=1190833551]@ Shigidi
How liquid is Japaul, would it be easy to offload in 2009? I know i might be hard to say just now but take a guess?[/quote]Japaul averaged 5M units/day in the 1st 5 months of 2007. If you own less than 5M units, you should have no problems selling.

shigidi:
@ wanajo,
from their Q1 reults, WAPCO looks like doing an eps of 3.8-4 naira, so it should hit at least 80 naira i guess. also, its pe ratio is by far the lowest in the building sector. there was a rumor of bonus last year and i hear its very probable this year. although they have 3billion+ shares.
thats why i think its quite good.

True, but that only puts WAPCO's FY value at 20% above it's current value. If they fail to declare a bonus/reasonable dividend again, the market won't be happy. Why not try for something with a higher upside. Dang Sugar looks a LOT better than WAPCO right now. Lower trailing and forward PEs, higher PAT growth%. Easily N40 when the bulls return.

yodiyokun:
Insurance will do well, but I don't think it can be as good as banking except for those that bought the shares at < 1 or 2 naira. We have to remember that insurance business still has a long way to go in this country where there is little or no disposable income. An average lagosian has a bank account, how many have insurance policies - whether motor, house or life.

I would argue that's all the more reason for the Ins. companies to grow at a larger rate; there's a large untapped market. And as wealth increases, more people will be aware of the need to insure valuable property. After all, the best investment is always protecting what you already have. In other words, a bird in hand,

yodiyokun:
Wanaj0,

OK so Banks are not looking attractive, what else is out there? Let us know your thoughts - Because I am still ruminating on what instructions to give my broker today.

I am seriously looking at crusader ,law & union and wema - let me have your suggestions for /or against.

I think Wema is still O.K though, if you are ready to wait for 1 year be4 you see any appreciable gain.

I vote Crusader in spite of the merger gist. the growth rate is phenomenal.

@ Shigidi,
You mentioned both my primary sources of outstanding shares. I tend to use the NSE website to fill in the blanks and run web searches to see if the company has issued new shares in the last 2 yrs (may not have made it to the NSE website if so). Ultimately, you need to keep your own records until someone develops a comprehensive/accurate website.

donne4real:
Easimoni, Tmoni, Temmie etc.,

Abeg I need you peoples' advice o. I just got a loan of about $10k to invest in stocks hoping for a quick return. Which stocks can you advice?

Thanks

A loan? Hmmmmmmmm. I'd hesitate to advice people to take a loan to invest (you might have to wait longer than expected), but since you already did, put 33% each in Wema, Nig-German Chemicals and Crusader Ins. All have 100+% potential over the next 12 months.

shigidi:
easiiiiiiiiiiiimoniiiiiiiiii, i don miss u oooooo!!!!!!!! you should be banned from any further holidays.
@ wanajo, i remember u saying earlier that nigerian german is not a liquid stock which means it only responds to fundamentals,does that mean there wont be any significant price change till january?? and how do u know liquid and non liquid stocks i feel that is good knowledge so one knows when to jump into stocks instead of tieing money down.
once again, oga easi welcome back

I missed this forum as well, esp the mind-bending questions from u and Tmoni! 
NGC has only 154M shares outstanding. If you can afford 1M shares (and can find to buy), you might be able to get a seat on the board! As at YE 2005, only 5 peeps had more than 1M shares. The point is NGC trades only ~ 100k shares/day vs ~ 10M/day for the top banks. Much harder to find someone willing/able to dump/mop shares when only 100k units change hands. Leads to good price stability.