₦airaland Forum

Agbalowomeri: Bros there is a linear relationship between ROE and PBV. I used to be glued on PE sometimes ago, no wonder some stocks will trade at almost the same PE forever. To determine that a stock is undervalued, one needs to see where the stock's data lies on the smoothed curve of PBV versus ROE (please dexter help). For example, if PBV is on the y-axis and ROE is on the x-axis, any stock that falls below the smoothed line is likely undervalued. One may need to do a research on the possible value of the gradient; perhaps this would likely differ from sector to sector. I think I have seen a similar graph in one proshare's document.

So, if a stock is trading at PBV of 0.5 and a PE of 4 and the ROE is 8 and you think it is cheap? Bros it is just rightly valued! But if a stock trades at PBV of 1.0 and the audited ROE is 25, bros you won't get this kind of bargain anywhere in the market! Please if u do abeg just let me know. That is why a stock with a high ROE will always be more expensive. For example, Stanbic's PE is already taking over from GTB because the ROE has moved higher than that of GTB, the same reason GTB traded a higher PE than its peer all along, the same reason it appears FBNH is getting cheaper by the day because of its depreciating ROE.

Back to Afriprud; ROE here is around 25 (I'm projecting it to year end 30 as it appears from history their earnings increase towards year end), PBV is currently around 1.5. Now for an ROE of 25 in the global market, PBV should be around 3.0 and above. Now you can see it is cheap to me. Then the dividend payout ratio appears to be high. Finally, strong growth!

Bros, thanks for the great insight. I think I need to digest this more... you don touch something within. Bravo!!!

UkwuAmu: Sir Aks why you dey vex? What i write is my personal opinion . You do not have to read it . I am not a professor or a preacher . I would rather somebody shows me the negatives on the stock I am buying rather than telling me you cannot go wrong with that stock. Wetin concern me? Go buy you Oando . Its your money . Next time you respond it will good to add a caveat that you own oando and so you maybe biased .
Take am easy and buy more Oando . Na my computer, bandwidth and my idea for internet forum i take dey write. I am happy you cant take that away from me. No need to get unnecessarily emotional.

GBAM!!!!

1 more GBOSA to the 10 I gave you earlier!!!!

Dexterax: Once a debt has been qualified as "convertible", more than 6 times out of 10, you can be sure that option will be exercised.

Dexterax: A couple of days ago, I mentioned something about the "dudes at BusinessDay" on SMN which was wittingly re-echoed here.

You know, it's bad enough that you report complete bullshiiit about what's going down in the financial markets, then you decide to also charge for the bullshiiit?

Like seriously?

Anyone who swallows hook, line and sinker everything our so called journalists dish out daily will himself to blame. Most of those guys sit behind their laptops and dish out trash.

UkwuAmu: The day anybody can quantify how to calculate investor's sentiment, the person might just become the biggest new hit in the stock Market . Oando has come out with the result finally and the forum is alive. I can see a lot of flip flopping and everybody is quick to interpret the result depending on what side the person is .
The truth of the matter is a lot of people do not know what they are getting their hands into . Upstream investing is very different from downstream. There is no short term in Upstream , its capital intensive, short term in upstream is like 10 years . I would like people in this forum to educate themselves on this so that they fully appreciate what they are getting into. For you to succeed in upstream, you must have Good management, Good corporate governance, transparency, accountability and above all meticulous planning . One major incident can take the company to the cleaners ( does anybody remember the BP Spillage of the gulf of mexico? ) The company lost close to 100 Billions dollars YES 100 Billion.
Now Oando is venturing into upstream, they need a lot of cash from what we can see from the financial statement yet they are giving away cash in form of dividends. We also hear they might also do a right sales to raise capital . Is everything going okay here? I have heard a lot of people here saying owners of the company are doing their best to crash the price so that they can mop up. Would not paying dividends be the best way to crash the price . If you are sure of what you are doing, all you need do is to assure shareholders that you are at transitioning phase and some projects going forward will require a lot of capital. Tell them you wont be able to pay dividends now but in like 3 years from now, you will take the company to a new level .
What we are seeing is a company who is more interested in the price of the stock rather than the plan for the company by trying to buy investor's favour by paying dividend from money that they need and in turn will get the money back from the rights sales .
From experience, any company that is more interested in the price of the stock rather than a good plan for the company has no interest of the shareholders .
Like I mentioned earlier there are certain qualities that are required from companies going into upstream. I think Oando management has got everything figured out . If things do not go the way they plan, there will be only one loser -The Shareholders
I will be watching this company with very keen interest and the Nigerian in me really wish they do well . Am I confident ? Not the antecedent they have shown . A Leopard does not change its skin overnight . Will people make money ? Yes if you are insider and knows what is going on . Should I invest in oando or not - my answer - SIDDON LOOK. if you hammer i celebrate with you at Mama Ejiro
There are a lot of other companies out there that you do not have to be waking up 10 times at night to see if there is any update on Oando.
People can keep deceiving themselves to think they have a strong mind by saying investing in Oando is not for the faint-hearted . I wonder how many of those invested in Oando do not get palpitations from time to time with their oando investment . The new one being cooked now is their third quarter result which will reflect he COP will blow out the exchange. We dey watch. Good luck to all

Come, you must be Oracle from SMN....

ifeykay: You need not be surprised. Is simple, company that have retained profit in the past (reserve) can dip hand into that account and pay far more than their current year's EPS. This also happens when a company has determined that going forward the company is better positioned to generate more profit than in the past (sometimes new business).

Oando can't be looking for money to develop the assets they bought from COP and be paying dividends. The journey they just embarked on is CAPITAL INTENSIVE and we're talking MILLIONS OF DOLLARS.

omaojo1: Oga, all this media propaganda no go work.

Please don't fail to get today's Thisday, see page vii for aiteo's position. Amongst others, it stated that:

-The Aiteo Group did not bid nor has it indicated any interest to bid for the OandoPlc downstream assets.

-The Aiteo Group has no intent to purchase the said Oando downstream assets.

The situation as it is is that there is only one interested party and the outcome is still probabilistic for now.

10 GBOSA for you

Once you mention Oando here....be ready for attacks and sarcasm from all sides.

Aks: @mpi210 - but you have google by your side even if you are not privy to the info. Btw- you can check this out http://businessdayonline.com/2014/09/forte-oil-aiteo-group-others-scramble-to-acquire-oandos-downstream-assets/#.VCGCQFekrxU

Oga, my point was that he was stating it as if he's part of the negotiating team.

The post below explained my point better.

UkwuAmu: Like you are most times for the bolded . Nothing is conclusive yet and Aiteo is in the picture right now. Aiteo is bidding for upstream assets and are favoured to get one . You must realize that you have become a kind of cult figure for some people in this forum and they take what you say as gospel truth because we are incredulously gullible people . The same reason why a prophet will see Air malaysia airline crashing but not see his building collapse . I would advise you to slow down .

UkwuAmu: Like you are most times for the bolded . Nothing is conclusive yet and Aiteo is in the picture right now. Aiteo is bidding for upstream assets and are favoured to get one . You must realize that you have become a kind of cult figure for some people in this forum and they take what you say as gospel truth because we are incredulously gullible people . The same reason why a prophet will see Air malaysia airline crashing but not see his building collapse . I would advise you to slow down .

You reach to hug for this wonderful post.

10 GBOSAs for you

Dexterax: My oga, please remember that a prophet only sees future things.

In this case for instance, that which was seen by FO as being in its INFANCY has been extrapolated to an ADVANCED stage of development.

Some of these extrapolations dey run belle o!

People on a forum like this can make investment decision based on this and the end of the day, the deal might not go through.

What if that downstream company happens to be Eterna?

myjoy08: Sir, i don't think there will be any right because Oando and FO are in advanced stage of negotiations concerning the selling of Downstream Sector of Oando to FO. Expect some news so soon concerning the deal and how much FO will pay in cash and equities (In FO) if everything went well. So let's see how things unfold sha...(I might be wrong...)

Myjoy08, FO told the stock exchange clearly that discussions on the proposed acquisition (NOTE, they never mentioned oando) is still in its infancy

Dexterax: Now you're one of the sharp guys too...

Bros, I never near those guys in Financial Engineering.

Better to watch from the sidelines as things unfold.

Dexterax: My oga, this is also dynamic. Honestly.

The qualification date of the interim dividend far no be small.

They might throw in the rights issue before that date........

Sharp guys!!

Let me ask another one:

What's the debt to equity ratio of Oando?

omaojo1: Mpeace: I'm begining to understand myjoy08's believe in oando, and I now see some sense in the believe that they may post a very impressive result(whenever they decide to) and even pay dividends. I just did a personal analysis of the whole COP deal, and my conclusion is that the whole sum spent in the purchase would not reflect in the profit and loss analysis. They may only appear in the liabilities column, and almost every company on the exchange do have liabilities(large or small). For instance, the sum borrowed from several financial institutions by FO and Transcorp to finance their power sector acquisitions did not reflect as losses in their results. Although there are outstanding payments to be made on the COP deal, the proceeds of the acquired company's buisness may just be used to defray the outstanding sum while that of the rights issue would go to the settlement of liabilities to financial institutions. I also think that the delays in releasing the result and the whole hide and seek game are justa n attemt at making investors to sell in frustration, while WT and friends mop up and accumulate more shares. Just an opinion(I might be wrong).

omaojo1:

This post only shows how ignorant you are when it comes to understanding the basics of a Balance Sheet and Income Statement. Keep living in fantasy island.

Oma ya e lenu.

Mpeace: I'll just reserve my comment, as only time(and WT) will tell. It will look like magic to many.

Oga, I still stand by my earlier position irrespective of what you are shown in this market. There is always the true position and the position you outsiders are meant to see.

Where have you seen a coy with an EPS of 23kobo paying 30kobo.

Have you seen the qualification date for the 70kobo dividend? Expect the rights to come before that date.

Did you see the current liabilities (borrowing) of 188bn of Dec'13 that reduced to 175bn in June'14. What is the definition of current liabilities again pls?

I will say the same thing if I were in your shoes. But me I know the actual deal and will never be deluded.

This our market is just a joke.

Dexterax: It takes on different numbers depending on how the cowboys feel.

But for some months now, it's been hovering around 8bn+ units.

8B?

With all the PPs?

Hmmmm!!!

Abeg, wetin be the outstanding shares of Oando?

mercylicious: @ feelamong, good for u.
i wanted to buy apr today. it traded at 3.20 till arnd 1pm. i used the money to buy transcorp.
Immediately my trancorp order was filled, see apr crashing like a pac of cards. it went to 3.15, then 3:10 . i have not checked how much it closed wit. over 1mila sale order was placed at 3.3 and.3.4. i guess they had to sell at any price when the bid finished
.
i feel d bull wil start from tues next week.

It closed at 3.10

Dexterax: I was never asked by anyone my oga. I was congratulated for my patience and long-suffering instead.

passwelle: Its funny how some folks want only their own views to be heard. No one can come here to instruct anyone else to desist from expressing their opinion, be it positive or negative about any stock on the NSE. Transferring aggression unnecessarily. we go see wetin den go do when WT request for technical suspension

Dexterax: Mercy's question will resurrect itself.

SWG1: I dont know why I am Uncomfortable with that post.

Afo1k: Morgan likes complaining about competitors

I noticed on SMN, once you don't agree with them, you're a competitor.

The guy managing their social media is still an apprentice.

I LOVE their innovations and creativity but they need to learn how to talk as a cooperate entity.

Tjohn1: As you cherry pick, even the prices of the ones you picked, continues to drop.

Stock Market, patience is key.

Bros, buying below the intrinsic value of a blue chip coy after my DD is key.
Even if it drops lower, I won't even bat an eyelash.

If e no shit, e must vomit

Abeg, make this blood continue o!

Cherry picking no go get part 2!!

EMEKA1MILLION: walka

ok.. thanks

EMEKA1MILLION: oboi Na streaming things o

on which site?

Havilah93: It flows in the blood!. . .

He used to be in City but was sold when the UAE guys came

Havilah93: Is he related to the real schmeichel?

Yeah, the son

Agbalowomeri: What was the price of diamond bank shares in 2007?

A lil' above N10. Hmmmmmmm

I want to believe they struck a deal then and bought the way PIC bought into Dangote Cement at a discount.

Charlesnerd: Pardon my ignorance.

If Actis had a shelf life of six years,its apparent their set target was not met ,taking into consideration the poor performance of the bank during the period.Is it possible Actis benefited from the partnership through other means?.

Assuming there was no side benefits,it seems logical to extend the tenure of your investment at a period when the bank seems to be turning a new corner.

I think they've realised their investment in Diamond bank. Looking at when they invested in the bank, they've made more than 100%. They've moved on to other things.