₦airaland Forum

emmanuelewumi:
Leverage is not bad.

What is bad is over leverage.

What is bad is using leverage without having cash flow that can liquidate the loan in 5 years or less, but focusing on capital appreciation for the servicing of the loan.


What is bad is using leverage on a stock whose Return on Invested Capital is less than inflation and the interest rate on the loan.

What is bad is using leverage when you don't know how to value and business and also incorporate the sustainable earning growth of the business into your valuation.

What is bad is not knowing about Growth At a Reasonable Price. Some of us buy growth stocks and the valuation given to the stocks are extremely high.

What is bad is the inability to identify quality stocks that are selling at a discount.


What is bad is using leverage based on the current valuation of our portfolio. Eg having a portfolio valued at N100 million, but the dividend paid in 2025 is N3 million and it is expected to grow by 10% for the next 5 years but you got a loan of N50 million against the portfolio. How can the dividend service the loan.

Whereas another investor with a portfolio of N100 million, but the dividend earned in 2025 is N8 million and it is expected to grow by 15% for the next 5 years. If this investor gets a loan of N16 million to N24 million against the portfolio. This is about 2 to 3 years of the current dividend earned. His portfolio dividend can easily liquidate the loan in 3 to 5 years.

Or using leverage for stock market investment should not be more than your total annual income from all sources for 2 years provided you don't have other outstanding loans or debts to service



Ask the Pastor that got a loan of N60 million to invest in Sterling Bank in 2005, what was the total dividends he hoped to get from his portfolio when he got a leverage of that amount, did he consider the valuation of Sterling Bank.



To do well using leverage you have to consider the following.

1. Valuation
2. Expected sustainable growth
3. Efficiency of the stock bought through leverage.
4. Liquidity of the stock bought through leverage
5. Your cash flow.
6. The leverage should not be more than thrice the most recent total annual dividend.


These are very conservative but it will give peace and the staying power to hold on when the market is bearish and that will happen at least once in every 3 to 4 years although the longer the bull market the more brutal the bear market

emmanuelewumi:
Top 10 stocks with the highest return in 20 years.


Transcorp should not be in the list, they had a share reconstruction.


United Capital should be in the list, they had a 2 for 1 bonus

emmaodet:
Why did you say most stocks are over-sold?
Because according to this Meristem research, the current ASI P/E is below average 5-years SD/-1
Which means fundamentally, the average stock needs to be priced up.

aj8:
Please ignore my brother. The eps was annualized.

Agbalowomeri:
I hope you know that the EPS is annualised?

aj8:
Common Sense Target for Nascon N206.72-N258.40

aj8:
What’s the organic earning? Common sense strategy has to be applied to organic earnings. Search aj8 organic for further insight. In that way, the next earning is more mathematically predictable. However, what’s organic in one sector may not be organic in another sector. We need to apply small common sense in such too. It’s all about averaging out our expectations. No stock can resist appreciation above a price 4x its FY EPS as long as the earnings were derived from sheer sweat and administrative sensibilities, not even one. That’s the heart beat of the Common Sense Strategy.

Streetinvestor2:
All these jijo guys no just allow the market rest
It looks this CGT go be blessing in disguise for real investors..lol.
I see serious drop in jijo next yr

jckgroup1:
Price may never see sub N500

Sunrisepebble:
The majority shareholder in Aradel, the PE firm, have sold off their holdings now

olig:
Haha! Now I get it, I didn't know that it can not be migrated. Thanks.

Locotrader:
Do not sell your Japaul.
You will regret it if you do.
Loco don't need anyone's thank you.

emmanuelewumi:
They already have the N250 billion and N500 billion, the right offers and public offers are mere formalties

MeezPat:
Please who has ever been able to reach first registrars here. Their phone lines do not go through, They do not respond to emails. I thought PaceRegistrars was terrible. First is worse. What is the email to copy for SEC please as I am tired of reaching out with no response.

Locotrader:
Maximum peterichy will cash out in Japaul is N50m .
In the next one year,Japaul will become an investment stock and will no longer be a cash out stock.

This September, there will be lots of activities in Japaul and might cause a possible breakout.

Watch the volumes closely.

Agbalowomeri:
Geofluid dey learn work

ositadima1:
Back to my bunker..., see you.

PuristForest:
dangsugar not out of the woods yet, two scenarios at play bullish wave 4 back to 53.4 and then to 107 or bearish lower than 31
caverton - we still think there is downside towards 6.1 region
Oando to 45 region
nascon - downside to 50 region
japaul to surpass 3660 ath
August may not be as bullish as we think ....DYOR.. no play with your money
on the bullish side, hmcall can double in price, break below 4.2 violates option
Stay ahead - https://ewnation.com/category/stock/nigeria/
Enjoy

faoogoke:
Investor wey follow Loco go miss road

I dey Royalex kamape!

Locotrader:
Let's do this business now with all pleasure

Locotrader:
Can you collect my right.come over to cardinal stone let's do business @N2

100% genuine.cardinalstone acct available for the transactions.
Also a available at Atlas portfolios