₦airaland Forum

@ poster,

when company issues bonus shares, the NSE adjusts the price to account for the new shares. Therefore since FBN declared 1-for-6. The new price = (6/7) x the old price. Therefore the price at closure date was 48.5, the price after closure was (6/7) X 48.5 = 41.57. Now you have 7 shares worth 41.57 each instead of 6 shares worth 48.5 each. Both cases are worth 291.

No winner, no loser. Don't go looking for bonus. It's a mirage.

shigidi:
steevie, i thought i gave u advice on first inland earlier and u said u would hold on to it. so whats the big fuss, i don't think much of first inland in the short term but who knows.

First Inland has not show us anything since Oct 2006. No audited results in the bank's history! Don't buy if you don't have. If you have; a market cap of 90B needs 4-5B in PAT to justify. It may be worth a gamble to see if they'll deliver 4-5B after auditing. But it's a gamble none the less.

enurayce:
@ Easimoni
Thanks so far 4 your posts and candid advise.
Do u still think that ABC trans is worth it like advised some time back

Is there any clear cut way to analysing the intrinsic value of a stock


Why is it that some listed companies don't have their prices listed daily.whats the implication of these and what should one do regarding such stocks

Phew. lots of questions!

ABC results were soooooooooo disappointing. I guess all those contracts and new facilities have not yet begun to payoff. Based on 1Q 07 results, the FY EPS should be ~ 14k. NOt impressive for a N3 stock struggling with growth. I'm going to have to see some PAT growth before I think about re-entering. I bought 300k units (at N4.20) when I was in love with it. Good thing I sold at N4 or I'd be crying now.

Intrisinc value: no real agreed way to calculate it. PE, PEG, ROE, ROA, PB are all ratios used to compare stocks to determine it's value but that value will vary according to valuation styles. Some people love PE much more than PB and vice versa. Most people are falling in love with CAGR, which is like a bank rate. I think Warren Buffet uses a variation of CAGR when valuing stocks but I stand to be corrected. All vlauation methods require some prediction of future earnings and those predictions are always wrong!

Dunno the answer to the 3rd question. Most likely there were zero trades that day on that stock and your broker decided to skip the blanks.

REZIGIRL:
Please oh can someone tell me why the price of wema is dropping everyday. I've got some shares there that I'm planning to sell but was only waiting for the price to appreciate further.

Please I need candid advice, should I hold on or sell or plsssssssssss?

Hold on. I've been burned by selling a stock before the results are listed. The whole market is going thru a bearish period, it's not just Wema or the banks. I own a lot of Wema shares and I will sit this one through. All the 2nd tier banks have exceeded earnings expectations on the way to POs. Wema should not get left behind.

All Wema holders; prayer and fasting this Friday! (just kidding)

@ Shigidi,
excellent question! I also have wondered about Intercont. bank. Some parts of the PO were oversubscribed to 774% but not the whole thing. Plus I don't think the bank itself would be willing/able to absorb as many shares as they were alloted. The MD is on the record as saying they raised 95B total from the offer. At 13.5, that is a little over 7B shares. If you use 8B and with the current 10.72B, you'll end up with 18.72B. With a PAT projection of 22B, you get a forward PE of 20.3, the lowest (according to me) among the 1st tier banks, but not awe-inspiring. Numbers could get much worse should they choose to absorb more than 95B

Personally, I'm taking a break from the banks.

Back to the topic. I work for an American company in Houston. If u are complaining about Nigerians, you should see the average American dress to work. Appalling! Ties with button down shirts and chinos? Someone once walked up to me and said I must be Nigerian because I'm well dressed. Nuff said!

However, those brits dey dress o!

frankiriri:
As I said elsewhere Naija is the only place where the size of the cake can be increased by cutting it into smaller peices.

Nice quote! I've made a mental note to use it in the future. With your permission of course

Iwerebor:
Looks like a correction has just occurred on Zenith Bank and First Bank.
They both have one thing in common: an unusual rise and an unusual fall.

That's incorrect. Both companies declared "bonuses" and the prices were adjusted downwards on Friday to account for the "bonus" shares. Since FBN did a 1-for-6, the new price would be (6/7) x the old price. Same goes for Zenith: (5/6) x the old price. See why bonuses don't mean anything and why you shouldn't rush  or ask for a abonus?

@ Opomulero1,
nice try by APT but no cigar! Ashaka as undervalued? With profits dropping like a rock? Nig-German overvalued? Just wait till Wanaj0 logs on; he will finish them.

We need to have a summary on each company; how many shares, what profit projections, risks, opportunities. Use it as a starting point but do exhaustive research before you issue a BUY order.

Nice to note that they have all the banks (except InterCont.?) as overvalued.

MyPeace:
no body is talking about lasaco insurance. l learnt they just published their result. please how true is it? l have 10,000 units of it bought at 3.25 and now it is sold for 2.83. ls there still hope on it??

Lasaco released N560M in PAT for 6 months to June 2007. this is up 1300% from the same period last yr! The problem is (just found out yesterday), they sold almost 6 billion shares during last yr's rights/PO. Factor in those shares and now they have 7.4B and a full year EPS of 15k. I'd say the current value is fair but in the long-term (1-2yrs) they should outperform the market.

To the guy I told last week to keep his Lasaco, above is my revised position.

tellmemore:
Thanks easimoni.
So what do I look out for in both E.P.S and P.E ratio before I buy a stock.? Is it the high or lower of any of them?

EPS is simply a means to calculate PE. Because of the inverse relationship, the higher the EPS, the lower the PE and a low PE is what we should be looking for. Now here comes the caveat: on the NSE, companies are always doing stock splits (aka bonus), rights, POs, IPO, private placements etc. Since EPS = Profit-after-tax/outstanding shares, you need to keep track of how many shares a company has sold that have not yet been listed. This is the current problem with banks and insurance companies; no one knows how many shares most really have and the NSE website takes time to update.

Anyway, as a start, looks for the lowest PE (within the sector you are interested in) and account for sold but yet-unlisted shares in EPS calculations.

Enjoy.

Ijay07:
Hello easimoni,
I have been following your contributions, advices and all acorss the variuos threads and i must honestly commend you. You have a way with handling requests (even of the dumbest nature)
More kudos to you and keep being you.
Regards

Silent admirer

Thanks! You just made my day!

@ boysteve,
you can contact me at easimoni2004@yahoo.com.

tellmemore:
Can someone please explain what E.P.S and P.E ratio are and how I can use it to judge which stock is good enough.

They stand for Earnings Per share and Price to Earnings ratio. EPS tells you how much profit a company has made per outstanding share. PE tell you how much you are paying for each naira of that profit. PE = Price/EPS. The lower the PE, the cheaper the stock (all other things being equal).

For more on EPS, click here. For more on PE, click here.

Seun:
Wasn't that email supposed to be confidential?

All powerful and gracious host,
The email went out to all who received the report. Besides it been published on Proshare.

sharestalk:
easimoni
Dont fall in love with any stock. WEMA is going nowhere. You would have made more if you have divested earlier and have put the money on a more vibrant stock.

Bros, I've been begging for advice. I will def sell this month. But tell me what to buy. I can't get the ones I want coz everybody wants them: C&I, Crusader, Nig-Germ.

I haven't laughed this hard in a long time.

doncaster:
Ok will the price continue to go down or what?

I don't know if it will but I know it should.

presido1:
Please what is happening to FBN share price, it keeps on going down and today its N49. Is the downward trend associated with the what is happening at NYSE. As at today Dow Jones is recovering.

I've always thought NSE was insulated from the events in the global markets. The decline in the NSE is likely jus market adjustments. Most of the shares (esp. banks) are over-priced. Plus the rash of more (bank) offers is adding fuel to the fire. N120B to be raised by Afribank I bet 95% of Nairalanders don't even know who the Afribank MD is! I don't! and I don't care to know! And they ask us for N120b? Anyway, that was not your question. FBN is over priced: N20B in profit btwn 15B shares (and u know the offer was mucho-oversubscribed) doesn't add up to more than N30-something.

Iwerebor:
Hey friends:
I stumbled on a statement from someone in another forum that buyers of FBN's last PO will neither partake in the 1 for 6 bonus nor the dividend payout. Is this true talk or misinformation?

True talk it is. No bonus or dividend for people who purchased the PO. I believe the propsectus warned people beforehand.

Lagoschic:
Thank God i only invested 10 million

Only? I want to be like you when I grow up!

Michaeli:
CSL or ARM?

CSL worte the report and fired the guy who worte it!

Vitastraka:
The material is false. Basically a hack job

IBTC and FSDH recommended Access to clients. These brokerages have in house research powerhouses that would have smelled any nonsense ages ago

Really? You don't think there is something fishy about almost 100% increase in profits for a bank? NOthing wrong with your MD and DMD sitting on the audit committee? There was a lot of speculation in the report and speculation has no place in such a report, but the guy asked questions any reasonable investor should have asked him/herself.

yodiyokun:
Easimoni,
can you imagine First bank is at 49.50 , there is indeed weeping and gnashing of teeth ooo, when some predicted it will cross 80.

LOL!  N80 for FBN? V Funny! And per Wanaj0's response, magin trading is dangerous business.

Wanaj0,
I did say I was going to avoid UNIC and N.E.M because I felt the picture I developed (in just a couple of days, mind u) was incomplete. The "question marks" are the ones I plan to avoid. What do you think of the ones I called "gems"? Niger Ins, Sovereign trust, Lasaco and Prestige? I think I have the full story on oustanding shares (including 06 offers) but there may be other news which I may not be privy to from across the pond.

tellmemore:
People. I would like to invest short term in a stock. Something I can resell by end of this month. Which stock will anyone advise me on. I have May and Baker in mind.

PLS, PLS, PLS go and do fixed deposit. The market is not for a month's investment. It's not a money doubling avenue. with the fees alone, you'll most likely lose money in a 30 day time-frame.

shigidi:
@ easimoni, please don't forget wapic? i think thats the number 1 insurance coy. right now.
in its last result, it got an eps of 69k, although i don't know anything about how many shares they yet have to list from their p.o, but their projections for its next year result is looking good even though its just a ten month year. forcasted eps of about 1naira.

I know Wanaj0 loves WAPIC but I've been doing some research. They will end up with a total of 4.23B shares (so says the MD, I googled them). If they double last yr's performance, they come up with N1400M which is EPS = 33k. for a stock already ~N7? Maybe the do more than 100% incr in PAT, but I found a few gems in the course of my research; Niger Ins, Sovereign trust, Lasaco and Prestige. Also found a fewquestion marks; UNIC, N.E.M., Royal Exchange.

I need to gather liver to sell my WEMA and hit the insurance sector. The PEGs are ridiculous!

wanaj0:
Just to sound a note of warning, all those that started investing some 12months ago and have only witnessed the bullish run, don't be fooled! There are bears in the market. With the bullish run, every one is a stock guru. At least if you bought Wire and Cable that is not producing anything you still have capital appreciation! Soon there will be a shaking then everyone will find its level. Then there will be weeping and gnashing of teeth. Be warned!!!

The market dropped 2% today, after dropping 0.5% yesterday. Banks alone dropped 3% today. Is there not weeping and gnashing already?

Omoba3:
Easimoni: Based on the results you posted would this prompt you to take a position in LASACO or any of those insurance stocks?

Been doing my research and I'm liking Lasaco, Crusader, M benefit and a couple of others. I know Crusader is scarce at the moment and I'm watching M benefit drop. I may buy into Lasaco until the others become clearer.

[quote author=Rob-roy link=topic=31554.msg1400918#msg1400918 date=1187299823]@ all,
What dyu all think about the idea of purchasing some Nairas ahead of the anticipated increase in worth/value?[/quote]The naira is not billed to increase in value. don't waste your time.

NBA, the quote you have is an excerpt from the report that Omoba has posted.

All, read the report. Interesting accusation. CSL (I think an FCMB subsidiary) has since fired the analyst who wrote the report.

crazyT:
@ Temmie, Easimoni and wanajo and others who contributed one way or the other to my LASACO question



Big Thanks to you all!!!

I think from the way Easimoni has drummed the idea into my head I'll still hold on to it.

I bought about 200k units @ 1.80 about 2 months ago (or thereabout), so if it goes to 15 Naira (before November) the way Easimoni put it; Na im bi say I don hit jackpot bi that o

Based on Temmie and Wanaj's info, I'll have to revise my projections downwards. Turns out Lasaco did an offer last year and will list additional shares. Can't remember how much but I did the math and Lasaco may have another 50% to go over the next 6 months or so. Still hold but don't dream about N15. sorry!

this might be useful to someone. ON pg 11 is a list of companies that accessed the primary market to September 2006. Contains a bunch of insurance company. It won;t offer the full picture on the number of outstanding shares, but it may help someone.

@ Jesu Seun,
sorry I don't have an answer to ur question. But I noticed from your signature that u are a "fountaineer". How's Pastor Tee these days? Used to attend when I lived in gbagada.