₦airaland Forum

brotherly:
Investors have varying perspectives on which stocks to buy or sell. I remain bullish on OANDO. Given its substantial oil production surpassing Seplat, larger power generation capacity compared to Geregu, and significant natural gas reserves (10-15%), its current valuation seems undervalued.

Even if 2024 financials are subpar, the company's growth trajectory is undeniable. OANDO's recent statement encouraging local companies to lead the energy sector reinforces my optimistic outlook.

https://www.thecable.ng/oando-indigenous-firms-must-step-up-to-drive-growth-in-nigerias-energy-industry/

I concur 100%.
In fact, Oando's power plant is 930MW, more than double that of Geregu (435MW). Yet, Geregu is selling at N1,000 on NGX (I understand the issue of outstanding shares, earnings and dividend per share etc. may be different)
Add that to its higher oil reserves compared to Seplat, plus its leading role in Renewables etc.

[quote author=HgsMediaPlus post=131526411][/quote]That must be in Ghana!

emmanuelewumi:
I will always be myopic based on available figures.

As far back as 2012 Oando was my largest holding on NGX. Because some figures did not make sense I wrote series of emails to the company after that I wrote an article about the company unfortunately non of the newspapers published it including Sahara reporters.

I have to post it on Nairaland, the defunct Stock Market Nigeria and on Knight of Delta blog

You can search for my old moniker on Nairaland and read about it.

After this I sold all my holdings for between N24 and N26 even though I bought the public offer and right offers for between N95 and N100.

Selling Oando in 2012 was quite emotional for me, because I have been a shareholders since it was known as Unipetrol before Wale and co came on board.

Used the proceeds to buy Nigeria Brewery, Unilever and Nestle. By 2014 , I sold some of the shares to buy United Capital and APR.

Since 2014 till date first quarter of 2024 ,I never sold my United Capital shares. It was this year that I started selling to buy Fixed Income invested.


Being myopic based on available figures made me to exit my positions in Intercontinental Bank, Bank PHB, Oceanic Bank, Skye Bank, Union Bank.

Being myopic based on figures made me to drastically reduce my holdings in First Bank. By the way First Bank was my largest holding in the banking sector

The best way to do analysis is to combine technical, fundamental analysis with sector or industry developments, and impact on future earnings. So many things could happen within a year before the next financial results are released.
There is also analysis of valuation based on ''future or potential earnings'' in investments.

Kindly use whatever you prefer. We will be here by the grace of God when Oando release full year 2024 and mid year 2025 results. All our eyes go clear very well by that time!

megawealth01:
People can only win in this market when they stop being emotional...

When Oando gets green people start running after it but suddenly red you go see unnecessary fights which to me is highly uncalled for anyways...

Nobody here has the funds to influence Oando prices

What is happening in Oando is just an eye opener that there is huge interest in the stocks. All that is required for another serious rally is some positive results in the H1 2024 financial reports.

emmanuelewumi:
You will realize that the previous to delist was far better than recapitalization of a business with a negative working capital that deteriorated over the last 6 years and above.

And a negative shareholders fund that deteriorated even after selling assets to pay debts yet debt still increased.

No big deal in having a negative working capital once in a while, but when it becomes a normal occurrence over the years and getting worse, there is need for caution

A business with a negative working capital and negative shareholders fund is technically bankrupt.

This is the trap you fall into when you get fixated on financial numbers drawn from only past events.
Have you ever seen a company that has transited from the downstream to upstream sector the way Oando has done, and without facing some liquidity and debt challenges?
Have you factored in the value of oil and gas reserves, resources and other assets that Oando has acquired just recently?
The company now has more volumes of crude oil to produce and sell, almost double of what they sold in the 2023 accounts.
Do you know the implication of having their sales and receivables denominated in USD but trade payables in naira?
Oando becomes technically better off because the devaluation of the naira gives them more revenue to settle their naira-denominated obligations.
When did you ever see a bankrupt company giving USD550m loan to a government agency like NNPC?

Wait until you see the inflows from the acquisition of ENI/AGIP oil and gas assets. Any analysis of Oando's financial accounts before that time will be an exercise in futility because the fundamentals will change drastically.

Every company goes through what Oando is facing at one point or the other.

Choiceguy:
It depends on your strategy tiring down your money for long while hoping to get N49.when there's other stocks you can play and make better money,without taking risk.

Yes, you are right.
It also depends on your entry price, risk tolerance, target price gain and the volume of units you command.
I bought most of my units at very low price around N5. I bought a lot of units so N49 is more than enough for me, even if I should wait for another 6 months.
I rather stay with Oando and receive even N40 or N35 per share than make some silly moves and then lose out when it eventually starts to rally to N50 and above.
A lot more will be clearer after the H1 2024 results

emmanuelewumi:
How did you arrive at the N49 valuation.


The only valuable thing is the company's goodwill and brand name, every other thing na korofo or shell.

The company is working for the banks and can't even meet up

The N49 is based on the SEC rule regarding the price to apply when a company applies to delist its shares. Oando got to N49 before it dropped to N40

Raider76:
Don't they use closing price? N49 was intra day.

The rule only says the highest price at which the shares were traded over the 6 months prior to the AGM. It does not distinguish between intra-day or closing price.

emmanuelewumi:
Yet shareholders fund deteriorated from negative N197 billion in 2022 to negative N236 billion in 2023.
Yet working capital deteriorated from negative N800 billion in 2022 to negative N1. 5 Trillion in 2023
Bank debt and lease increased from N600 billion in 2022 to N820 billion in 2023.
I hope you have the knowledge, skill and experience needed to read and interpret the table attached below

Thank you for the analysis and the last question.

May I ask you if you know and understand the limitations of financial ratio analysis based on historic data?
Also, ask yourself if you are aware of the impact of the oil reserves and other resources that Oando just recently acquired after the release of the 2023 accounts that you reference?
Do you appreciate the impact or relevance of post-balance sheet events when doing your analysis?

Raider76:
Don't they use closing price? N49 was intra day.

The rule does not specify whether intra day or closing price.
Even if they use closing price, it would be N44.65 per share.

emmanuelewumi:
How did you arrive at the N49 valuation.


The only valuable thing is the company's goodwill and brand name, every other thing na korofo or shell.

The company is working for the banks and can't even meet up

Oando's price got to N49 per share before it dropped on the same day to N40 on the NGX. The peak/highest price it ever got to within six months prior to the AGM is what will be paid to shareholders if they decide to delist within the next 6 months .
We have witnessed and overcome the worst days of Oando which is in the past already.

emmanuelewumi:
They will be doing it for the banks who technically own the company at its current state

Oando has paid most of its bank loans using the proceeds of the sale of their downstream filling stations to NNPC. It is contained In the 2022 and 2023 accounts. The major loan they have now is the USD800m from Afrexim bank.

megawealth01:
I've tried all I can to avoid OANDO talks because when you want to offer honest contributions here people get extremely emotional...

BUT

My only concern in all this Oando bla bla na Wale

You see Wale changing abi being born again eh... I laugh in Swahili

Shebi on top this Oando matter everybody go collect when time comes...? We are watching

It depends on what you define as your collect ooooo... It can be collect profits if you play well or the other collect wey people here hate wella

No one should be scared even if Oando wants to delist. The least that they will have to pay to each shareholder is N49 per share if they decide to delist within the next 6 months.. And if they deliver good results by that time, the price may even go higher than that.

Streetinvestor2:
Is it not possible. That was what I meant by special placement. And I expected it to come from Tinubu family so that they will still have full grip. Then again if they decide so they may want to take the company full private to take all the profits

Oando had done several capital raising by offer for subscription/rights issue, private placement etc in the past. They did not go private even though the Tinubu family could have bought all the shares at those times if they wanted to.

The Tinubu family has always been in existence; they did not just arrive from nowhere in 2024!

emmanuelewumi:
What you don't know is that Wale will be among the strategic investors.


Insiders and retail investors are playing different games.

Profit after tax can be misleading, try to dig deeper for the company's owners earnings.

Read my post well.
I have already said it in my post that Wale and a few executives may provide the funds. And it is now a new thing. It happens in most companies. when they are cash strapped.

But it does not mean they will reduce the number of shares that you have, though the relative percentage holdings may change if they do not do a rights issue to raise the additional capital

emmanuelewumi:
So what will you call the people that might inject up to $500 million for the recapitalization of Oando

They will call them strategic investors. The company Oando will just issue more shares to them, but it will not be too high to make Wale lose control. They don't have to reduce the shareholdings of current shareholders in order to do that. In fact, Wale himself and a few other executives can provide the money or arrange with a lender. All they would need is authorization at AGM.
Like I said, they can also raise convertible loan stock which can be either repaid gradually or converted to equity in future as situation demands.
Restructuring like that of Unity Bank means an entirely different company is taking over and Wale and other executives would likely lose their shareholdings percentage and control of the company! Can you allow to lose control and ownership of Oando if you were to be Wale, the CEO?

emmanuelewumi:
Is Zenith having a capital restructuring. You should use Unity bank as an example because the capital will be restructured

Unity Bank is being acquired by Providus Bank; that is why the shares are being restructured.
Oando cannot be acquired by any other company for now. So the scenarios are different!
The worst that can happen is for Oando to get some big investors to pump in money and buy more shares or they acquire convertible loans that can be converted to equity shares in future.

emmanuelewumi:
Is Zenith having a capital restructuring. You should use Unity bank as an example because the capital will be restructured

Oando cannot do any capital restructuring to reduce the number of shares in the short term. That would be share buy-back , which is similar to the share buy-out that has been blocked by the Court, at least for now.

What they can do is rights offer or new offer for subscription, or they go private.
They are looking for money, so why would they do a buy back that would require them paying huge money to shareholders

emmanuelewumi:
I don't think you understand what I am saying. Prior to capital restructuring there will be a technical suspension, so I don't know where one will get the capital appreciation if one did not book profit.


With current outstanding shares of about 12 billion, it might be compresses to 1 billion and capital raising will be issued for about 10 billion shares.
Hope you understand the type of dilution being referred.

That is why when insiders want to take their company private, I no dey argue with them. I sell and move on. They know how to legally carry out what they have planned to do

Oando cannot do any capital restructuring to reduce the number of shares in the short term. That would be share buy-back , which is similar to the share buy-out that has been blocked by the Court, at least for now.

emmanuelewumi:
I don't think you understand what I am saying. Prior to capital restructuring there will be a technical suspension, so I don't know where one will get the capital appreciation if one did not book profit.


With current outstanding shares of about 12 billion, it might be compresses to 1 billion and capital raising will be issued for about 10 billion shares.
Hope you understand the type of dilution being referred.


That is why when insiders want to take their company private, I no dey argue with them. I sell and move on. They know how to legally carry out what they have planned to do

The rule of technical suspension during public/rights offer does not apply anymore. Go check the banks that are currently doing new subscription/rights offer. Their share prices are still moving up/down on the NGX. For instance, Zenith price closed today at N37.85 on NGX but their current offer price is N36.50k
Same will happen if Oando should do any new offer/rights issue.

Again, do you know the price at which the new/rights offer will be made? What if the price is N50 or N70? Cant I sell and make profit at that time?

emmanuelewumi:
The problem is with the recapitalization that can turn 1 million shares to 100k shares.

In order to avoid this shareholders will need to pump in more money, do you think shareholders who have not earned dividends in 8 years will be willing to do that?

That is why insiders and their friends in politics will pump in the required capital injection which will dilute the holdings of the retail investors

Are you looking for dividend-related gains, or capital appreciation on the NGX and sell off your Oando?
That is what determines whether you should worry too much about dilution of shareholdings due to recapitalization.

Streetinvestor2:
ok.you are still repeating my initial stand.That the case of the 14 in court has not ended or determined. Though any judgment from it is no longer weighty on the remaining shareholders. That said the case of the 14 shareholders is still in court. Pls go read back my observation to your initial post on this matter. The finished case is that of second group which is the most important to other shareholders

I repeat: The request by the 14 minority shareholder for the buy-out of all the shares (which is what concerns all other minority shareholders like myself and people here on NL) has been thrown out. QED!

Why should I be concerned with the other case coming up in (October) if it no longer affects me and my shares and that of all other minority shareholders in Oando? It is no longer material or important

emmanuelewumi:
Do you know what it means to have a negative shareholders fund?

Return on equity will be negative, Return on Invested Capital will be negative.


As earlier said the company will need to be recapitalized through Right Offer to the tune of over N300 billion.

Having a public offer or special placement might wipe out the current holders

Read my post carefully! I am NOT targeting dividends from Oando. I am targeting capital appreciation from price rally when they release good results!
There can always be price appreciation whether they recapitalize or not. I am also suspecting that they will recapitalize, but that does not detract from my strategy.

Streetinvestor2:
The judgement I am aware of is that of the second set of shareholders who asked to be joined in the suit which was delivered in thr favour. The first case which I believe was by the 14 guys is yet to be determined and I believe was adjourned for October. Though I believe it is now dead on arrival by recent events. Don't be taking oando issues personal.If I am wrong you could show the link

There is nothing personal.
The 5 minority shareholders went to court to challenge and oppose the initial 14 minority shareholders that originally went to court to ask for Oando to buy-out all other minority shareholders. Oando offered to pay N7.07 per share.
The Court then gave judgement (in favour of the 5 shareholders) by telling the 14 minority shareholders that they have no right to ask Oando to acquire the shares of all other minority shareholders who do not want to sell their shares. The Court said all the other minority shareholders cannot be forced to sell their shares.
The Court then said it's earlier order for Oando to submit a Scheme of Arrangement (for the buy-out and delisting) should be limited/restricted to only the shares of the 14 minority shareholders if they still want Oando to buy-out their shares.
The Scheme of Arrangement is the case that is still to come up in future(in October).
So even if Oando is to buy-out any shares right now, it can only buy out the shares of only the 14 minority shareholders that signed the court documents and took the case to court. Other minority shareholders cannot be bought-out for now. That is the judgement of Court.
So the Scheme of Arrangement case coming up (in October) concerns only the 14 minority shareholders. It does not concern the other minority shareholders (like those of us here on NL) who were not party to the case in court.
This has basically destroyed the whole buy-out plan.

thebargainhunte:
O and O wey go sell above #150 before May 2026

Lol! I can imagine the number of people saying a big ''amen'' to that prophecy/prayer.

This is what some folks should realize:
Oando's price going down very low in the last 5 or more years is an opportunity for some people to make big money. It comes once in a very long time. This is Oando's turnaround period when people need to take position.
I have witnessed similar things in the past with stocks like BCC (Later Dangote) Cement, WAPCO, FBN. That is what gave me the heads up and made me realize the opportunity that Oando presents.

Currently, International Breweries and Honeywell Flour are other stocks that can give similar huge profits in future. But the exact timing of the year of their turnaround is what we do not know yet.

Streetinvestor2:
I cannot remember this happening yet.Though I have the strongest reason that it will happen

The judgement of the Court is available in newspapers and online. All it would require is a few minutes to search, read and be very aware.
The certified true copy of the judgement can also be obtained from the Court Registry.

For emphasis, the Court has thrown out the request of the 14 minority shareholders for Oando to buy-out all minority shareholders. That is part of the reason for the price rally in the last few weeks.

emmanuelewumi:
I won't advice you to make it a long term play until the picture is clearer, enjoy the capital appreciation and remember to book profit.

The company will be recapitalized and i won't be surprised if the current holders will own 5% of the recapitalized business

Check out the shareholders fund @ almost negative N200 billion

Thanks, advice taken.
My context of ''long-term'' is not necessarily to keep it for dividends. No! But I want to keep for a while and sell at a higher price relying on the rally after they release some good results for FY2024 or mid year 2025.
The final destination of my funds will be to buy FG treasury bills and collect huge interest upfront, but Oando is the stock that can surely give me the kind of capital gains that I am targeting between now and then.

Choiceguy:
It is unfortunate that most of us fail to listen to that call of 400% even when they were seeing it on paper profit. Oando on a free fall by next week will be selling below 30

Now everyone is shouting I will load more if
price goes beyond a particular amount.

That's how gamble stock behave

For me, Oando has transited from being a gamble to a strategic investment, the moment the court threw out the request for buy-out by the 14 minority shareholders.
What happened just recently on NGX should be an eye-opener to all gamblers/investor! There is huge, but latent interest in Oando and the price can possibly make a constant 10% gain on daily basis for 3-4 weeks if they release good results!
Just let's wait until they release full year results for 2024 and half year for 2025.
People may not find it to buy at N50 or more.

SonofElElyonRet:
N10 bawo

Lol! Anything is possible. Don't be surprised if you see the Ondo's price going down towards N10. There are people that would want that to happen so they can buy more, and I am one of them.
What matters now is individual preferences and focus. Short term gains/gamble; or long term massive profits?

The industry/sector that Oando belongs to is the money-spinning one, if one allows his/her investment to mature.

atiku4President:
This is what heavy taxes being imposed on non-Lagosians in Lagos, especially the business-minded and hard working Easterners, is giving Lagos. Look at the big structures being erected with people's sweat.

And tomorrow they'll come and say non-Lagosians should go? Not possible! non-Lagosians will seat and work in that building and become the Local government Chairman.

Edited at 10:32 am
Hmm, I know say them go carry this dry news go front page as soon as I throw my usual tantrums. The moderators will never acknowledge how I drive traffic for them, but I know how to do it. No wonder my likes don dey reach 40,000

This is the kind of foolish talk that destroys a nation or society.
Why don't you go and stay/work in your state and pay taxes to your state government so they too can build structures for you?

Omooloriredade:
What was all that hullabaloo over Oando about?
A stock delivered almost 400% in about 5wks and retracement led some to lose their cool?

Can someone point to a stock on the NSE that has delivered the way Oando has in 5wks? Take a look at the TA na. Daily max gain for more than a week. Profit taking should be expected along the way. It's just the way the market works. The market will now determine a fair value based on news released so far until next news/announcement is released. If it's positive, expect the market to reward the SP. If negative, expect the opposite. C'est normal.

Can I just ask that we show some respect to other forum members? Social/forum etiquette is important. Please let's show some maturity in our posting. Allow others share their views and once you have made your point, there is no need to troll the forum.

In my opinion, Oando will .........

Let me stop there. I need to be sober.

Disclaimer - I didn't suggest any trading or investment strategy, if it appears I did you probably misunderstood my point.

I wonder how people worry and disturb themselves unnecessarily about Oando's price.
For those who may want to make some good cash from Oando in the short term, they may feel worried about the recent fall in price. But I have said it severally that Oando is a huge money spinner for those who are playing for the long-term. Such people should not be bothered with this momentary loss in price. In fact, I would be happy if the price falls to below N20 or even around N10 in the next few days or weeks (short term) so that I can load more and more units.
My focus is when Oando releases their 2024 full year results and 2025 half year results. That is when the prospects would begin to manifest clearly.
Any price movement before then cannot worry or move me, except to use it as opportunity to buy more units.
My target is to wait patiently and eat the fattest meat in the long term, and not to be running around chasing bones in the short term.
Guys are lurking around to make billions!

GeeKudi:
You’re so wrong and you don’t know it.

I don’t talk for OANDO or any other stock. In fact, I am a newbie in stock trading and have been monitoring proceedings here and reading other stuff to learn. I bought my first ever share on the use on the 20th June this year.

My point is, don’t be so assertive when throwing allegations for which you have no proof just like you did with this moniker thing.

And before you go, bro, please help my life. I have been with Bamboo but they don’t have a provision to monitor prices live. Please could you suggest a better platform that offers this and more? And, would it be possible to move my stuff to the other platform? Thanks.

May God bless you for the words of wisdom, as bolded (above).