₦airaland Forum

Okiki:
@easimoni
Your expected PAT for MBenefit might be a bit too high unless their result improves dramatically. The half year result was just over 400m, the result was released but not well publicised. On ther other hand, C & I to me has capacity to grow their earnings dramatically. Remember they just acquire 2 vessels and their attempt to acquire contrlling share in Ghana 2nd larged leasing company is still on going.

I believe both MBenefit and C & I are good if you are looking at 12 months frame.

Easimoni, do you know the total share outstanding for Standard alliance and Soverign trust?? Need to do some analysis on them. Wapic is getting close to a very good buy point too. They will have unbeatable earnings in the sector for sure!!

U are maybe the 3rd person today to mention this N400M interim result. I never saw it and it's not on the NSE or proshare websites. Oya, make una direct me.

Standard Alliance = 3.47B
Sovereign Trust = 3.51B

And before u ask, I'm sure.

jungle700:
@ easimoni
M Benefit has 5.911B outstanding shares - Does this number of shares include the public offer that was done sometimes last year. Please see below

Mutual Benefits Assurance Plc plans to raise N2.4 billion by offering for subscription, four billion ordinary shares of 50 kobo each at 60 kobo per share. The application list opens on 6th September 2006 and closes on 29th September 2006. According to the prospectus, “the purpose is to enable the company meet NAICOM’s minimum capital requirement for insurance companies and for possible consolidation with other insurance companies.

The 4B shares were 94.71% subscribed = 3.788B shares. they had 2.123B shares prior to the PO. Total is now 5.911B

@ CrazyT, you can "western union" me too a year from now.

@ yodiyokun,
If you calculate a forward EPS, you multiply the forward EPS by an assumed PE to get an assumed (target) price.
A real example: M Benefit has 5.911B outstanding shares. I expect the Full Year result to be N1.4B (2 X 2006 FY) which gets me an EPS = 1.4/5.911 = 24k. If you assume 20 is a good ratio of price to EPS, you can expect the price to adjust to 20 X 24k = N4.80 or N5.

Note, all the numbers (except # of shares) are assumptions. Assumptions are always wrong. The company controls the results, the market decides what PE to "pay" for the EPS. It's your job to guess at both and buy something.

My advice is to do the math on as many companies as possible and pick the one with the largest ratio of forecasted/target price (as described above) to current price. That's most consistent way to pick companies over a 1-yr window. Right now, companies like M Benefit and Nig-German are ahead (in my s.sheet).

Note some companies will disappoint (AP/ ABC transport) and some will surprise (Crusader, Lasaco).

@ Shig,
I pretty sure M Benefit has only 5.911B shares. This time last yr, they had 2.122B shares. I've doubled checked with the SEC website and no new M Benefit shares have been requested or alloted.

If there's more coming, o ti tan!

@ koksie,
shigidi has answered you quite well but I'd keep Oceanic out of the short-term list (the banks are asking for a beating) and Oando out of the long-term (I own a lot of Oando, but if u read this and other threads, you'll find they have a lot of issues that Wanaj0 and others have raised, I'm looking for a good time to bail)

Nice work Shig!

whitelexi:
I must say that my broker seriously agrees with you. I was hell bent on buying C&i Leasing shares, perhaps because their shares are doing well, perhaps because my elder sister is one of their directors - i really don't know why but it really was appealing to me all of a sudden, but when i arranged the money and spoke to my broker, he told me to hold on, surprisingly he even suggested MBenefit, AIIO, Prestige & Crusader. . .  Of course i didnt see this as a good route for profit in the medium term as mbenefit has dropped almost N2 in the past few weeks, but he wants me to trust him. At the end of the day we didnt reach a concencus.
From what you guys are discussing, he seems to be on the right track, right?

For once, I agree with a broker. The C&I shares will be listed, sooner or later. The fundamentals will then adjust unfavourably. We know the full picture with M Benefit and it's a good short- or long-term deal at N3+.  And remember, a good stock that just dropped is a great buying opportunity!

yodiyokun:
Shigidi,

I understand the projected eps, but how can you determine the future price of a share from the eps or PE ratio , can someone explain to me.

Based on my (short) history in this market, it appears the forwards EPS (and thus PE) is the best way to predict underpriced stocks. At current conditions, a PE of 20 is a reasonable way to forecast future price. The report Emaachile posted at the top says the market average is 24. (not sure if it's arithmetic or weighted)

If you calculate the forward EPS of say M Benefit to be 25K (I came up with 24k) then a reasonable target is N5.00 as shigidi rightly pointed out.

On the other hand, due to all the additional shares C&I sold, their forward EPS is 22K, therefore you can target N4.40.

M Benefit is now N3.25, C&I is N5.50, which would you buy? 

Best idea is to go both ways. Have separate accounts for your salaries (assuming you both work) or allowances (assuming only one person works) and have a joint account for "capital projects" e.g. buying a house/car, investing in the market or a business or saving for the future. You don't want a spouse monitoring every purchase as if you were a child. Also, set a limit above which the spouse MUST be consulted. I had to clear it with Mrs Easimoni about spending $600 on my PS3 (yes shameful for a 30 yr old, I know )  and I recently vetoed her $1500 LV bag (bought it for her b.day anyway, I'm sneaky like that)

Bottom line: If you don't like a man/woman's spending habits, DON'T marry him or her. once you do, curbing overspending is by negotiation only if you  want the marriage to work.

whitelexi:
Are they all out? I thought some were waiting on the tech suspension list? I'm very interested in japaul, nahco and fcmb so it'll be nice if they are spread out a bit

They are all out or on the way in a few weeks. Not so sure about Dangote.

Icon4s:
FIDELITY BANK, DANGOTE FLOUR, JAPAUL OIL AND MARITIME, AFRIBANK, NAHCO and now FCMB .Why all at the same time?I didn't buy FIRSTBANK because of ACCESSBANK.Now How do I spread my money? Maybe I should buy ten-ten naira of each

Ten-ten naira of each is a formula for mediocrity (and I don't mean that as an insult). I haven't seen the propsectus for anything except Access so I can't comment much. Japaul will be hard to justify. Even the triple-digit growth is hard-pressed to overcome tripling the number of shares.

Why not join the insurance party? I'm the dee-jay!

Temmie, I'm not so sold on C&I. Yes the 6 mon PAT was up 200+% over last yr but did you factor in the PO from June 06. They've been alloted 71.5% of the 1.4B shares they offered (1B) and that takes total outstanding to 1.6B. I don't know when those shares will be listed but that may be why the market has failed to respond to the result. If you double the 6 month result, the stock is selling at a forward PE of 25. A good growth stock, no doubt, but it'll require some patience I think.

@ mendax,
at least in a movie, there is always the fine print at the end. Let me see if I remember; "this is a work of fiction. Any similarities to actual events or to people, living or dead, is purely coincidental and unintended". When they make a movie about someone or an actual situation, they say "based on the life of" or "based on actual events". Certain professions (journalism, ministry, financial advice) are based on intergrity. Would you allow yourself (assuming you are a xtian) to be pastored by a fornicating reverend? Does his sin mean he can't teach you about, say, tithing? While I don't compare RTK's work to that of a minister (it's not even close), the point is intergrity is implicit in both jobs.

Take the lessons, but with a pinch of salt.

And if you want the thread to die a natural death, leave it alone?

Hello all,

Please be informed that FCMB has been placed on technical suspension today as a result of their planned public offer. The proposed offer price is N14.00.

Regards,
LeadCapital Limited

Osisi, it's so true.

Here in the US, you can always pick naija women out from a mile away. They are usually poorly dressed with whack hair and even whacker make-up!

@ poster above,
NASCON has not released any results in a loooooooooong time. (has anyone ever seen Nascon results). The increase to N30 was driven by the Dangote hype and scarcity. Now, a bunch of people who bought at 69k or less than N10 are selling (can u blame them?). Maybe even Aliko himself.

Solution: wait until results are released. Salt is inelastic (in terms of demand) and this will be a virtual monopoly. It should be a long-term gem. Plus, as Temmie says, you don't realise a loss until you sell.

BTW, by my estimates you invested over N2M in a company without seeing results? Don't get caught by the Dangote hype, he is a business man not a professional philanthropist.

@ Tmoni, if we are still talking about your sterling bank purchase, they have a forward PE of 24.6, not too shabby. But it took them an eternity to release the FY report so be prepared to sit tight. If you are banking on the rumoured PO to see an artficial price hike (a la Access and Afribank), good luck. It's almost certain that WILL happen if a PO is in the works but I can only tell you what the numbers tell me.

drdaniel:
Finally d dangote flour ipo is out sept 3.What do d u guys think.Seems they will be usual over subscription and return of monies.What are the prospects technically.To avoid return of monies some are saying buy in small quantities in relatives names etc.But what about verification and eventual sale.Gurus in da house please reply.easimoni ,aylala, temmie10 ,everybody
http://www.businessdayonline.com/?c=54&a=15631

No prospectus, no advice. Sorry. Can someone please post a prospectus or analyst report?

@ poster, do your NYSC O! I can't start to post about so many friends who took the masters option and had limited options afterwards. My wife included. defer your admission and get NYSC out of the way forever before the big bucks beckon.

Thanks for the info. Let's see the prospectus before we pass judgment.

Whatever happened to the NSE (or was it SEC) refusing to allow the offer because it was over priced? much ado about nothing.

temi900:
I love this blog. Easymoney, i want you to explain what you mean by CFA. Thanks

Chartered Financial Analyst

Capital Oil? No offense but I had to go to NSEPRO just to check it really existed.

No idea! What info do you have about them?

whitelexi,
Zenith has already done a 1-for-4 and also gave N1.00 dividend. Second gist is wrong.

I'm an engineer but know lot's of people in banking and finance and the answer to your question depends on what your plans are.

An MBA opens up more of the western world. Those countries tend to be particular about knowing the Institution you got your last degree in. I got my BSc in Lag but the fact I went to A&M is the only thing that carries weight with my american co-workers.

If you want to stay in Naija, go get your CFA. It's opened some big doors for 2 guys I know quite well. Plus, there is little or no lost income gettting a certification

Nevada,
the bonus will not be applied to those who bought the the PO. It was stated in the prospectus that PO buyers would not be eligible for 2006-2007 dividends or bonus issues.

I don't know when the certs will be released. I don't follow the primary market because it's too much stress and uncertainty.

The Wema Story from Vanguard

http://www.vanguardngr.com/articles/2002/cover/august07/23082007/f323082007.html

Fingers crossed everyone.

Madden NFL 2008. Much better than 2007!

Dr Eteng,
Nice to see that your business is doing well. Should I quit my job and come work for you? I won't mind being the next Charlie Munger O!

All Nairalanders. I go begin charge o!

enurayce:
@ easimoni
If a stock is not traded on 4 days on the exchange,whats the implication.

Where do u see ABC 4- 5 months from now

No implication. There may be buyers and no sellers or sellers and no buyers. It means it's not a liquid stock and may be hard to sell/buy.

I don't know about ABC. I feel it may hang out at the N3 mark until they impress us with some good results.

EPS on NSE website is almost always wrong! Dividend is only a fraction of earnings. Collect comapy results (or get them from cashcraft) and calculate your own EPS. OR sign up at FDSH securities. They have mostly correct EPS and PE calculations. But not the NSE website my brother, not the NSE website.

egoldman, u mean the PE today would be 20.9. That would be correct but your EPS calcs are wrong. Intercontinental PAT over the last 4 quarters (available info) is N18B. EPS based on 10.72 B shares (check the NSE website) is  = 18.0/10.72 = N1.68 & PE = 23.0/1.68 = 13.7

Now, Intercontinental shares are really closer to 18B based on the rumoured offer proceeds so the calculations become
EPS = 18/18 = 1, PE = 23/1 = 23.

It is still one of the cheaper bank stocks around as long as they don't absorb much more than 8 B shares. Some gist has it at 10B new shares which would make the PE 30.

enurayce:
@ Easimoni
So whats your take on buying ABC trans at N3 now

I wouldn't do it. It's a N2.50 to N3.00 stock until they start showing good growth. No upside here until then.