₦airaland Forum

ositadima1:
Prediction is very much an art. Your valuation of GTCO, for instance, is also an art because you made assumptions to arrive at a specific number. You do have a number in mind that you believe reflects GTCO's value, right? How did you arrive at that number, and what assumptions did you make?

Applying concepts logically is always better than ignoring them (in your case saying it is futile) . Someone who doesn’t calculate and simply assumes GTCO is undervalued is likely to get burned sooner or later if they don’t know where to stop buying. This is just an example to illustrate my point.

I no get power to argue but I dont see the logic in doing this calculation. Average P.E can give a reference for historical valuation, average book value can also give historical reference. Historical EPS has no use what so ever

ositadima1:
Because EPS fluctuates from year to year, certain years may show a very high EPS due to factors like reduced interest rates or unsustainable revenue jumps. In other years, unfavorable events can pull EPS down. The idea is that an average will smooth out these anomalies and outliers. You’re likely familiar with this concept from stock movements; the same approach applies to physical quantities like temperature, humidity, and more.

I know what you are saying but you are trying to turn an art into a science and it is futile

Sunrisepebble:
GTCO and Zenith making me smile

Smart money is taking position. Though I own more GTB than Zenith, Zenith is slightly cheaper at current prices.

ositadima1:
Yeah, there’s nowhere they can’t be used, as long as there is a time series of data points.

I know it can be used anywhere I just dont see the efficacy of using it with EPS

ositadima1:
You may not have heard of moving averages, but they are widely used in the real world, from finance to engineering. I suggest you update your knowledge—lest the world leaves you behind.

Moving average for EPS? ok na

yMcy56:
Tips needed 😊
2 suspected

Meanwhile, GTCO @54
The resilience though!

While they have been fixated on OANDO we were positioning.

ositadima1:
Although averages can sometimes be misleading—just ask the guy who drowned after being told the average depth of a swimming pool was only 1.5 meters before he dived into its deepest part at 4.5 meters—in this case, averaging may be useful as a low-pass filter.

Now, book value per share is essentially a fancier term for equity per share (kind of...). Therefore, EPS divided by book value per share gives us ROE. By averaging ROE over five years and re-substituting it for EPS (now an average), this method makes sense.

This doesn’t mean his discount rate or current value calculation wasn’t incorrect (it is an he needs to admit that), but this approach helps smooth out unusual fluctuations in EPS.

Smooth out unusual fluctuations in EPS by averaging it out?

That is utter BS in the real world.

It is wise to discount unusual income but smoothing it out makes no sense

emmanuelewumi:
The banks have been coming out with fantastic results since 2023.

It is proper not to use their current EPS for valuation.

One can use the average EPS for last 5 years or use the average return on equity in the last 5 years to get the normalized EPS.

I prefer using normalized EPS.

Average EPS might not give the true picture of things, the company might have issued bonus shares, done public offers, converted debts to equities or given stock options to the workers which might dilute the earnings.

Why 5 years? The average business cycle is about 5 years


To get normalized EPS, assuming the current Book Value Per Share is N100. The company's return on equity in the last 5 years are 20%, 25%, 30%, 35% and 40%.
The average return on equity in the last 5 years will be 30%.

30% of the N100 ie the book value is N30.

The normalized EPS will be N30, even though the current EPS for the year is N40

This doesn't make any sense

Me4bas:
Help with your spreadsheet

I dont understand

BabsO2:
In my own spreadsheet I deducted N500b from GT's PAT as it counted unrealized gains of about that amount in its PAT. Ideally it should be placed under comprehensive income.

I initially did that but I undid it.

yMcy56:
ZENITH
https://doclib.ngxgroup.com/Financial_NewsDocs/42517_ZENITH_BANK_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42518_STERLING_FINANCIAL_HOLDINGS_COMPANY_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42514_ECOBANK_TRANSNATIONAL_INCORPORATED-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42515_BUA_FOODS_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42524_VERITAS_KAPITAL_ASSURANCE_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42523_ABC_TRANSPORT_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42513_CORNERSTONE_INSURANCE_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

When I see bank results I quickly go and input the data in my spreadsheet to do a comparison,

GTB has the lowest PE, Highest ROE and like the 4th lowest price to book value.

I siddon gidigba dey look this market

ndept:
https://doclib.ngxgroup.com/Financial_NewsDocs/42460_GUARANTY_TRUST_HOLDING_COMPANY_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

Good result. EPS of 38.41k as against 12.98k

Abeg does anybody know when the shares issued in the latest capital raise get added. They are still using 28b shares ourstanding

Is this service still available?

designking:
Even the UBA positive Q3 report didn't really impact the stock price much.

The market is quiet. We are seeing more offers than bids these days across the market.

On a historical basis the stock is very cheap, heck the sector is cheap. However, given current valuations in the banking sector; this result is not so wow.

For example the return on equity for UBA is less than 20% while GTB is doing 30%

GeeKudi:
Sure, Dangote Refinery will have massive patronage when it lists. Coming from NASD where people already have massive holdings prevented ARADEL from giving us that magic but I believe it will yield bigly when this initial dust settles.

Dangote wont leave that of meat on the table

Streetinvestor2:
That will be a hard one.i only see it possible in new listing maybe from dangota refinery and subsidiaries.Or any big company out thr coming to list.My oga 800% na different level in a short period. To see 200 % in a year in this present nse will require miracle

I see it happening in the banking sector

KarlTom:


You should understand the feeling that comes with gaining up to 800% from a single stock in a couple of months...

I do, but it is not likely to do same any time soon.

zendi:
We're here to make money.

So which other stock has made people more money in recent days than Oando?

The "fixation" is well earned.

Our job right now is to find the next oando before it does an oando

zendi:
Oando's follow-follow, Eterna, shielding it's master from new boy Aradel's cough and catarrh.

This fixation on Oando is very interesting.

Are you guys here to make money or to tell stories

yMcy56:
Nothing that I can think of really....
That's just the market for us.

Return on equity is lower than GTB thou price to book value is much lower as well.

Overall the banks are very cheap

BullBearMkt:
INVESTORS ABANDONING OKOMU RED OIL FOR OIL AND GAS STOCKS
Sellers are dumping OKOMU red oil stocks to capitalise on the ongoing rally in oil and gas stocks, thereby creating a potential buying opportunity for OKOMUOIL. The price is now nearing the demand zone, with a subtle support level ₦320 (circa).

PLAN YOUR TRADES AND TRADE YOUR PLANS

We are watching with side eye

emmanuelewumi:
EPS of N10 is possible at the end of the year. Forward PE of about 30

Thats Expensive in my view

OakPearl:
These are the issues.
Endless acquisitions that always leads to fat total assets but dwarf net assets without regard for minority stakeholders.
You begin to wonder if the owners themselves are really shareholders, because other reasonable founding bank shareholders have made sure returns reflect in the form of dividends.

I believe they are betting on greater integration between African countries. This is a valid long term strategy though I personally don't see that future.

Agbalowomeri:
But if you are convinced that it is going to 200, even 100 sef, then current price is still cheap

True, but I wanted to trade small.

Agbalowomeri:
Dem say Agbaje tif money

Maybe we go fit see am for N20 in November

I say make I use part of the dividends buy more units. Before I transfer funds price don recover

megawealth01:
Expected

Fully reversed. Which kind wahala be this. Make una panic sell oh!!!!

megawealth01:
Expected

I didn't expect it

GTCO down 4% this morning. Wow

jonnysessy:
GTCO interim dividend landed. This is what I call efficiency. Probably will used to add more units.

Distractors can continue their game plan. It has no effect.

Landed as well

essentialone:
So much allegations on GTBank. Should I be worried? Is my deposits and investments in them safe?😭

What allegations?

gbengafaro1986:
i dunno about UBA doing full bid, i thank UBA for the extra liquidity But we all know the N2 dividend is just for ToE to gather cash to take his rights, they made less profit, the dividend is not backed by fundamentals

And it is dangerous investing in companies like this

megawealth01:
LORD show this Nigeria mercy. People don't just know what's happening. The government should be proactive to economic issues with real urgency. If this continues to rise just know that...

Know that what, protests will continue?