₦airaland Forum

Payunsin:
Pls need advice on what to buy from my following stock picks.
Cadbury
Unilever
Dangote sugar
Wapco
Chams

DANGSUGAR would be my first choice followed by WAPCO. I won't touch the others for now.

emmanuelewumi:
With a return on equity of about 113% and a dividend payout ratio of 86%, Nestle should have a sustainable growth of about 16% whereas the earnings are growing at about 20%.


You get the sustainable earning growth by subtracting 86% ie the dividend payout from 100%, which will give you 14%. Then you multiply by the return on equity of 113.

Nestle is appropriately priced at a PE around 16, but nothing bad in getting it cheaper

I assume their is a direct relationship between sustainable growth and PE. I also understand that the company doesn't need more than 14% of earnings, hence d high payout ratio.

Agbalowomeri:
Yes coupled with the growth.
I haven't calculated it to confirm though.

However, it has to be cheaper e.g. PBV 3/4 to catch my money Lol

So Oga Agba, this is ur secret sauce dat u have been hiding.

- get assumed PBV by dividing ROE by 10, if actual PBV is less than 3/4 the assumed PBV and coupled with decent growth u have a green light.

Agbalowomeri:
What is the book value?
ROE is strongly correlated to PBV. From my gut experience, for every 10% increase in ROE, I expect an increase in PBV by a multiple of 1. So if ROE is 112%, the an appropriate market price should not be less than a PBV of 11.

PBV to be 7.4, if my calculation is right then ur gut says its undervalued.

At current price dividend yield is 5% even with very high payout ratio of 86%(shared 86% of 46 billion to shareholder, i think ).

He too cost, except u bought at discount, then hold.

emmanuelewumi:
uthor=ositadima1 post=119313407]

What about ROIC? For all I know they may have used a lot of debt to finance their businesses. What is their debt-to-equity ratio like?

They also have a lot of cash in the bank

With a ROE of 112.9% (Earnings was larger than shareholders equity), the high debt-to-equity of 254.2% (two and half times) was utilized very well. Its a good company!

The problem is in d cost of d stock, it is too expensive comparatively. PE at 16.7 times needs to come down to around 12 times. See some highlights below.

thesilentone:
The challenge for fundamental analysts is the number of parameters they consider.

ROE/ROIC/DEBT plus more are all parameters worth considering - Horses for courses.

The award for NESTLE was specifically for ROE.

I dey tell you. Since i started looking into fundamentals i haven't had it easy. One thing i am kinda sure of lately is dat ROIC should be higher than WACC (Weighted Average Cost of Capital).

A company is either creating value or destroying it, and a company dat consistently posts ROIC above WACC is a good one.

thesilentone:
NESTLE received an award last night - 2022 Highest ROE on the NSE.

I have checked the favourites, none comes close.

What about ROIC? For all I know they may have used a lot of debt to finance their businesses. What is their debt-to-equity ratio like?

4tunebest:
I can't get tired of saying thank you

Were we following the same thread?

Ahib/Alikote that was against sukuk and Tbills cos according to him (he is sort of right though) dollar devaluation was going to eat up ur interests. Again, there was also another reason he was against it that i cant remember now.

Though he gave good investment advice mostly real estate and hauling business. I miss d guy.

do4luv14:
Bros if you look the policy well, you will see that it favours the Governor's and super rich Nigerians


let me ask you can you efforts to pay 1k extra, for withdrawing another urgent 20k


Or can you pay 5k, just to withdraw another 100k, for your small business

Why do you need to be withdrawing several 100k cash when u can do transfer without limit?

And that is why countries like the USA are able to print money as a quick short term strategy. They do all d above.

BabsO2:
Thanks for the clarification.
I can see two big ticket items from this short brief.

1. Debt sustainability issues of some developing nations
2. Capital Outflows from some developing nations

Number 1 looks like a problem developing nations really need to address by themselves. Why do they accumulate unsustainable debt. Looks like those in power in developing nations don't really have the interest of their nations. Perhaps a simplistic perception as even the USA debt also looks unsustainable. But the US debt can be managed by printing money. While the developing nations debt can only be managed by mortgaging resources. Thereby compounding their future Capital Outflows. Globally it will be ideal debts are forced to be only usable for growth activities (investments) that can return value (future cashflow streams in the borrowed currency or in a strong internationally traded currency) and not for consumption purposes that passes the burden of repayment to the coming generation.

These are a few ways smart countries reduce their debt burden:

Increase economic growth: One way to generate more value is to stimulate economic growth, which can be done through measures such as investing in infrastructure, education, and research and development. A growing economy can increase tax revenues and make it easier for a country to pay off its debts.

Export more: Another way to generate more value is to increase exports, which can be done by promoting domestic industries or by negotiating trade deals with other countries. Exporting goods and services can bring in foreign currency, which can be used to pay off debts.

Attract foreign investment: Attracting foreign investment can also be a way to generate more value. Foreign investors may be attracted to a country with a stable political and economic environment, a skilled workforce, and a favorable business climate.

Increase productivity: Improving productivity, or the amount of output produced per unit of input, can also help a country generate more value. This can be done through measures such as investing in technology and training workers.

Agbalowomeri:
You do not get the point. How did they achieve those? By exploiting the same regions you are quick to condemn

I am not looking down on any one o.
Exploitation is universal, it is every where you go.

Agbalowomeri:
The lies you were fed. How did they achieve all these?

Google is your friend but if you are in doubt check this article on wikipedia:
https://en.wikipedia.org/wiki/Timeline_of_historic_inventions

See how the modern era starting from the 17th century is dominated by the west.

look very well at the picture bellow, for all we know that man could be ur great great grand father in 1879.

RabbiDoracle:
United Nations General Assembly voting : Towards a new international economic order

Voted for : 123

Voted against : 50

Abstained: 1

Check out the split in the votes at the UNGA meeting. The emerging world vs the developed world. The 85% population vs the 15% population.

Lots of countries seem very tired of the current economic order.

The emerging world should have some respect for the people that made many many things possible.

If not for them we wouldn't have made this much progress. We wouldn't have vehicles, airplanes, computers, internet, mobile phones. Or huge reduction in mortality rates from advancements in moder medicine.

The west practically invented the world economy when most of d emerging nations were still running around butt nacked.

emmanuelewumi:
We also have FCF for the firm and for the equity

I guess, from d "firm", we need to add back interet paid to debt olders while calculating net cash flow from operating activities. Debt and equity are considered together as one capital input. They call it unlevereged FCF.

Explained here:

" Unleverged fcf
Free cash flow (FCF) is a measure of a company's financial performance that indicates how much cash is generated by the business after accounting for capital expenditures. FCF is calculated by subtracting capital expenditures from operating cash flow, which is the cash generated from a company's normal business operations.

Unlevered free cash flow (UFCF) is a variation of FCF that excludes the impact of the company's debt. In other words, it is the amount of cash that the company would have available if it did not have any debt.

To calculate UFCF, the following formula is used:

UFCF = FCF + Interest expense (1 - Tax rate)

where FCF is the free cash flow, interest expense is the interest paid on the company's debt, and the tax rate is the company's effective tax rate.

Unlevered free cash flow is a useful metric for comparing the financial performance of companies with different levels of debt, as it allows investors to compare the cash generated by the business without the impact of debt. It is also a useful input in valuation models, as it reflects the cash available to shareholders after accounting for the costs of financing the business."

ojesymsym:
If enaira is adopted, (at least to the extent I understand enaira) then banks will no longer enjoy many of those charges they used to enjoy from our transfers.

U may be right...

"The potential impact of a central bank digital currency (CBDC) on the financial system is a subject of debate and ongoing research. Some of the potential impacts that have been identified include:

Disintermediation: A CBDC may reduce the need for intermediaries, such as banks, in the payment system, which could lead to disintermediation and a reshaping of the financial landscape. This could have both positive and negative effects, depending on the specific circumstances and the regulatory framework.

Monetary policy: A CBDC may affect the transmission of monetary policy, as it could change the behavior of households and businesses and their demand for money. It could also alter the relationship between the central bank and the commercial banks, and the central bank's ability to conduct monetary policy.

Financial stability: A CBDC may impact the stability of the financial system, as it could affect the level of leverage and the risk-taking behavior of financial institutions. It could also affect the stability of the payment system, and the resilience of the financial system to shocks.

Cybersecurity: A CBDC poses significant cybersecurity challenges, as it involves the handling of sensitive financial data and the protection of the digital infrastructure. It is important for central banks to address these challenges and implement strong security measures to ensure the integrity and resilience of the payment system." - ChatGPT

As stated in d passage it will depend on d regulatory framework adopted by d central bank. I feel that people will use both CBDC and traditional banking systems, but rely more on the later cos of other services they offer.

talk2me2:
Have you seen yours?

Yes, on d 6th.

and then this one ; What Nigerian stocks should I buy?

its answer: "I'm sorry, but I am not able to provide specific stock recommendations. As a large language model trained by OpenAI, my primary function is to provide general information and answer questions to the best of my ability based on the information that has been input into my system. I do not have access to real-time stock information, and I am not able to provide personalized financial advice."

AI, Artificial Intelligence, has come a long way, I asked chatGPT how I can calculate the free cash flow of a company and here is its answer:

"The free cash flow (FCF) of a company is the amount of cash that is available to the company after accounting for its capital expenditures (CAPEX). The FCF is an important metric for investors, as it represents the cash that is available to the company for paying dividends, repurchasing its stock, or making acquisitions.

To calculate the free cash flow of a company, you need to first calculate the company's net cash flow from operating activities (NCFO), which is the cash flow generated by the company's core business operations. This value can be found on the company's cash flow statement, and is calculated as the sum of the cash inflows and outflows from operating activities.

Next, you need to calculate the company's capital expenditures (CAPEX), which is the cash that the company spends on acquiring or maintaining its long-term assets, such as property, plant, and equipment. This value can also be found on the company's cash flow statement, and is typically reported as a separate line item.

Finally, to calculate the free cash flow, you simply need to subtract the company's CAPEX from its NCFO. For example, if the company has an NCFO of $100 million and CAPEX of $50 million, its free cash flow would be $100 million - $50 million = $50 million.

I hope this helps! Let me know if you have any other questions."

This is mind-blowing

Total interim dividend

Willie2015:
Don't understand the intention of the CBN...
What's the essence of placing the cart before the horse...?
With almost 40 per cent of the population unbanked...
D best move is to first ensure they are captured...
Most agric produce in urban areas are moved from rural areas...
Whilst transactions are done on cash basis...
Dont understand how CBN wants middlemen to conduct businesses...
in rural areas with zero banking platforms, poor network coverage.... etc..

At least more profits for banks and us as investors. More bank charges, the type dat dont require overhead, it goes straight to d bottom line.

Change is never easy, even when d change in question is much cleaner and efficient.

Agbalowomeri:
Come and buy us lunch with your loot o

But are you still waiting for it @12

.

.

.

Agbalowomeri:
Sha bring your profit make we share am

DM ur account make I buy u lunch @mamaput

100naira:
you try, I gave up after season 7

I stopped at season 9 and just binged d rest recently. Its other fork Fear the walking dead kept me going.

The walking dead:World beyond, this one was very boring, I never made it past a few episodes.

seyisanya:
Ha, no be so ooo. Nah oga u too b. More power to your elbow. Your contribution on this platform is well appreciated!

No mind me o, na joke i dey joke so.

IYGEAL:
Okay. That would be difficult to execute.

I use python to track trailing stops. Just need to download d daily price list from morgan at d end of each trading day, place d pdf file in a specific folder and d program will do d rest. Lets me know if stop is crossed or at what price it will be crossed.

U can also do that in excel, of course you have to manually add new row with d day's closing price and drag down d formula.

Alternatively, u can try d Instrument alert on investing . com (screenshot)

I came across this interesting BBC podcast made of short episodes on economy, titled - Understand:The Economy

https://pca.st/podcast/cdc7bea0-3c3b-013b-efc9-0acc26574db2

Agbalowomeri:
Who dares take away the shine from the Nostradamus of our time
All hail the king

Including u !