₦airaland Forum

DeRuggedProf:
Pluto09,
What are we buying tomorrow...

I don't like to make recommendations on what stock(s) to buy.

Godisfaithful:
Fitch: Nigerian Bank Results Put Spotlight on Capital Weakness


https://www.fitchratings.com/site/pr/1022829

Not only Fitch,we should all be concerned about CAR,liquidity, impairment charges and asset quality of Nigeria banks.
Imagine a situation where one single bank booked over 200b as impairment charge in just one year. Some directors are just wicked!!

fxuser:
loll 2 years loun loun nice one
FBN gradually pulled back from N20 to below N4 in under 10 years.
That pull is still looking for the last chapter

Respect !

Coolcash1:
Except zenith, the list makes sense...

Nothing is wrong with Zenith except you are only looking at its price movement on the exchange and not what is happening in the bank.

Princkez:
uncle P, why not give FBNH a chance cos dey will surely cum out of dis mess

It is actually difficult for anybody to predict what we happen to FBNH in one to two years.
The bank is not out of its problem yet and I don't understand while some people are keen to put their money in a company where one can clearly sees trouble.
NPL moved from 24% in 2015 to 26% in 2016 despite all the talks about loan restructuring and it is a situation of hope against hope.
Investment in stocks is risky but the onus is on investors to minimise the risk .
Fundamentally, FBNH is too risky at this point in time.
The only people who should be looking at the stock now are the insiders and the technical gurus and even at that I am sure oga fxuser and BullbearMkt will not be talking about what will happen to fbn in 2 years time but what they can gain from it in a very short time.

ihedioramma:
PLUTO09, You are wellcome to the NSEMPA . As new baby all ways cry after born so it is to stock, that is why i tell new investors not to invest all they have . ONE LOVE .

I might be new here in NSEMPA but I am not new to stock investment.
Certainly, it is against investment rule for investors to invest all what they have in stocks.
This is a great platform where you learn everyday.
One love.

OakPearl:
My exact mindset bro.
Pluto09, I can confirm you are a value investor.
Overtime, your likes always ends up on the winning side.
Core Warren Buffet approach.

Thanks @ Oakpearl.
I have had my fingers burnt severally on the NSE,hence my new approach to always do my due diligence on any stock before I put my money down.
So far so good,I am better off than when I used to follow hot tips and all the noise that surrounds the NSE .
I am still learning, and more than Warren buffet I am a great follower of the legendary Peter Lynch.

Tritri:
Bros the bear today no be small..Not only fcmb....

Investment in stocks is not only about what happens with prices everyday in the market. I am more concerned with what is happening in the companies that I have invested my money than the bear/bull tussles on the floor.

austinkenneth:
Abeg represent us well.

Most importantly, try to have an aside with someone from their investor relations and get the person's contact.

One key issue is how they book their forex income and gains. Most of it were booked in Q3/Q4 in 2016 leading to a leap in profitability. These went on to reflect in FY2016. Such money is still being made but not yet booked in Q1 2017. Please find out how and when they booked it in 2016 and how and when they'll book it in 2017.

Am not in this bus though. If I were in it, Thats what I would be most concerned about.

The huge forex gain they booked last year was made possible by the official devaluation of the naira.
That kind of profit is not sustainable since it doesn't come from their core banking operations.
Prior to the release of fcmb q1 result, I made a reference to this particular issue where I tried to alert our people that the result might be disappointing since most of their profit in 2016 came from forex gain.
As long as there is no official devaluation of the naira this year again, bank like fcmb will find it difficult to make the kind of profit they reported last year

lancee:
Forecast ..Mr mkt go decide how he wan do

.

holm:
What the OS for FCMB?

19.8b

locodemy:
Is that 32k eps not for Q1?
Why will you divide it by 4?

EPs is PAT divided by os
Do the math yourself and tell me the answer

Tritri:
Bros u just wake up?

I can see that many have already fallen for that manipulation
32 k is the annualized EPs
Divide that by 4 and you get 8

locodemy:
Abeg make una comot eye for fcmb make go over to fbn.

E b like say na 8k fcmb made for q1

locodemy:
Its 32k against 33k last year.Though flat result.I am not shaked.Make i use the dividend rest.i don try jare.

Still better than fide wey be 15k eps.

oga.loco. do.your calculations well o
How.did. they arrive at 32 k
Is like they annualise it

Intendy:
For those willing to take a short trade,livestock is presently good.
entry price to be BTW #0.59k - #0.63k

DD required thanks.

If I may ask, why do you think livestock is good?

locodemy:
They are working hard to get out of their wahala and the thing dey increase the more.
You dont know what you are talking about....

You get bad mouth too much,kilode!

DeRuggedProf:
You are quick to see trouble...

Intendy:
http://nse.com.ng/Financial_NewsDocs/17744_GUINNESS_NIG_PLC_-_Q3_MARCH_2017_FINANCIAL_STATEMENTS_APRIL_2017.pdf

This coy case na wah o

It be like say na gbese go kill this company.
Finance cost moved from 3b in 2016 to 8b in 2017 for just one quarter, chai!

PharmAlfred:
Who saw the volume Transcorp trade today?? 56million plus. Something is telling me those investors can't all go wrong.

NB: Just watching from the sideline.

Transcorp can trade a billion units for all that care.
I don't have to be in every stock that will make money for investors this year. There are better stocks out there with minimal risk. I waka pass.

BullBearMkt:
If I may ask, why are you eyeing stock with bad FY 2016? Any idea of what Q1 result will be?

Check my post on diamond bank FY 2016.
The result was not bad at all. I even said I prefer it to fcmb if they were selling at the same price.

locodemy:
For those who want to play a calculated risk game in Diamond bank,begin now to watch the technicals.it is almost at another good entry price awaiting Q1 results.
This game will be sweet this time...........Damage control things ongoing.............thru Q1 result.

My eyes on diamond bank too.
They should not release the q1 result till next week,the price never fall enough!

BullBearMkt:
"Last year, DANGFLOUR moved below N1.00 to over N4.00"

Although it might be too early to draw conclusion on this discussion, however the followings are my take:

1. FUNDAMENTALS drive the market/stock
2. TECHNICAL helps to determine right ENTRY and EXIT periods
3. Any stock with bad fundamentals but with accumulation will possibly have its rally limited
4. Stocks that have dipped for over a period of time, and later backed up by good fundamentals & with accumulation will possible produce the kind of rally seen in Dangote Flour in 2016

Thanks to pluto09 and OakPearl for their wonderful contributions.

...Over to you DeRuggedProf! I've learnt a lot from this

That is summary of it all.100% in agreement. Thump up!

BullBearMkt:
@pluto09 you are one of the people I respect on this forum... I deliberately kept behind the weekly chart of the stock before. See the Weekly chart below, the decline started in 2014, 1 year after tiger brand took over & reported loss of $40.5m as you clearly mentioned.

However, do we say because of Dangote taking over alone shoot up the price without any profits cum dividend declared by the company?

I am still keen to know the company's FY 2015 and Q1 2016 results

Thanks for the compliment. I always learn something new any time I engage in discussion with you.You are also fuelling a renewed interest in me to learn this technical stuff...

Like I said earlier, there will always be a time lag between a price change and the fundamentals of a company.
One thing is however constant: a company that consistently churns out bad results will experience a dip in share price no matter how long.
Dangote flour started reporting a loss in its operations from 2011 before the tiger brand people came.The reaction as to the share price might not be immediate but with a consistent operation loss for 3 to 4 years something will definitely give.
In my own opinion the mere rumour of dangote coming back to take over the company is enough impetus to trigger a rally. And don't forget we are talking about dangote here who has the capacity and the know how to move a stock from nothing to something. Add the irrational behaviour of mr market when in mood swing you will get a better picture.

BullBearMkt:
Thanks pluto09. I do understand the dilemma of bad fundamental stocks providing good rally... What I will appreciate are the followings:
1. What are the fundamentals of Dangote Flour for Q1 2015 before the fall began?
2. Its fundamentals for FY 2015
3. Estimated value price based on FY 2015
4. Also its fundamentals for Q1 2016 that led partly to the massive move

This will further help us to see if the company's fundamental was in good shape by 2015 ending or not OR when the fundamental changed for better...

As per the question of how many months accumulation on the stock last? From the chart, it lasted for about a month on high volume - from mid-December 2015 to min January 2016 (circled in black)

Cheers.

Yea, December 2015 was when dangote took back the ownership of the company.

BullBearMkt:
Thanks pluto09. I do understand the dilemma of bad fundamental stocks providing good rally... What I will appreciate are the followings:
1. What are the fundamentals of Dangote Flour for Q1 2015 before the fall began?
2. Its fundamentals for FY 2015
3. Estimated value price based on FY 2015
4. Also its fundamentals for Q1 2016 that led partly to the massive move

This will further help us to see if the company's fundamental was in good shape by 2015 ending or not OR when the fundamental changed for better...

Cheers.

Everything that happened to dangote flour can be explained fundamentally.
One key factor in the fundamental analysis is a change of ownership.
A little background check here will help our discussion;
In late 2012,tiger brand acquired a majority stake in dangote flour. In the first year of operation (2013), a loss of $40.5m was recorded and in 2014 they made a loss of $34.3m.
By this time,investors have lost patience with tiger brand and coupled with the fall in oil price and the possibility of a devaluation of the naira which many believed will hurt the company more,the stage was set for fall in dangote flour price.
And the rally? Dangote factor- by December 2015,dangote took the ownership of the company back which actually ignited a rally. I actually saw the rally coming then but unfortunately I was short of cash. The price was latter sustained by a very good result and so on and so forth...
Let me say this,in fundamental analysis, there is always a time lag between when an event occurs and when the price of the stock will reflect the new change.
And if dangote for any reason decides to buy into FO or Oando today, I will also join him there to make some cool cash as that will be a good fundamental change!

BullBearMkt:
"Last year, DANGFLOUR moved below N1.00 to over N4.00"

Since @DeRuggedProf threw out this interesting challenge, I've checked and checked the particular stock over and over again. Knowing that statistically, using 1 dataset out of pool of stocks in NSE for this kind of findings is insufficient, I looked over at 2 other dataset with almost similar behavioural pattern. 3 datasets to me could still give room for large errors...

My findings will surprise everyone & probably many of you would want to "eat me raw" when you see me. I sincerely welcome +ve criticism and contributions to the laudable discussion brought up by @DeRuggedProf.

Summary
-Stocks that did not perform well in the last 1 year or more (for whatever reasons)
-Stocks with price depreciation of 60% and above
-Before the monumental rise, there have been lot of accumulation going
-Readily, what comes to my mind are FO and OANDO, the much rejected stocks fundamentally!

Below is the Dangote Flour Daily Chart for the period under review. I can throw out more if you wish, but for now, let the discussion begins...

Good you are sticking your neck out on this. This really demonstrates your confidence and great belief in your methodology.
I agree with your summary on the first two points i.e;
Stocks that did not perform well in the last 1 year or more( I however think the reason(s) they did not perform is very very important for us to have a better understanding)
Stocks with price depreciation of 60% and more.
I am still learning this technical stuff and that will put me at a disadvantage to say more about point three. There is one question I want to ask here ,the accumulation in dangote flour lasted for how many months?
On your conclusion, FO and Oando?
The technicals might be good but I personally prefer stocks with good fundamentals in addition to a positive charts.
Oando is weigh down with too much debt and now that they have sold all the sellable, we need to ask how they are going to pay back money owed.
FO,for me is expensive at current price but we all know price is not the only yardstick and FO can still do its magic anytime.

Tritri:
@locodemy i have decided to join you in the fcmb bus.Reason was because Q1 2016 was just 1.6b and with the FX gain am sure q1 2017 will be within 4-5B. do i make sense at all?

Where do you think the fx gain will come from in q1 2017?
Tread carefully!

locodemy:
FCMB is the only stock i will play @nse until i see another robust stock to play.I am still at heavy profit even till now.my dividend coming up next week is 2.1m or thereabout if tax is deducted.i also bought almost all at 1.00 which still has upward direction any moment from now.

It is not too good to get attached to a particular stock when you are not an insider. Spread the risk, as nothing like 'guaranteed' in this game.

kentoto:
A result with profit position draws more investors/traders to itself more than a loss results, dividend also draws more attention than no dividend,

please dont compare FCMB AND DIAMOND bank together, mind you the stock price has been scripted for dividend payment, people are expecting alert next week, Diamond alert na next year oh

Yes, profit is very important in our clime and that is why you see all the manipulations with bank results.
Let me ask you this question; why do you think banks like fcmb,gtb and fbn add their fx gain to their profits while banks like access,uba,diamond and fidelity reported their fx gain separately?

locodemy:
I just guess the recent move is coming from Q1 result.if not diamond bank shareholders should brace up for free fall from tomorrow.
What is the comparism of diamond bank to fcmb.EPS:15K VS 97K,DIVIDEND:NIL VS 10K,EARNING/PROFIT:Not comparable in any form.

Make i quickly rush to buy more fcmb tomorrow.

My brother, diamond bank result is not bad at all.
Gain in forex was reported separately from PAT compare with fcmb that added it to PAT.
They also grew deposit remarkably and they are also growing their loan book.
Don't just look at PAT if you are looking at banks results.
Line by line comparisons, I will choose this diamond above fcmb at the same price going by their latest results.

Note; I have neither of the stocks in my portfolio.