AN IMPORTANT NOTICE;

For those who may not know, all network operators in Nigeria (MTN, AIRTEL, GLO & 9MOBILE) will henceforward utilize a UNIFORM USSD CODE for all mobile-related services following an approval by the NCC (the Nigerian communications commission), to allow for the use of a single identical code accross all network.

The implication of this is that you can now use a single service code as a subscriber irrespective of your network operator of choice.
So whether your an MTN, AIRTEL, GLO or 9MOBILE subscriber, simply dial;

*310#... To check balance
*311#... For airtime recharge
*312#... For date plans
*323#... For data balance
*321#... For share & sell services
*303#... To borrow airtime
*305#... For VAS (Value added services)
*996#... For verification of sim registration, NIN (national identification number), and/or Msisdn linkage.

Dial 300... To reach out to their respective call/customer care centers.

This presumably, took effect on the 1st of May, 2023.

Pls do well to be guided accordingly!
...just thought I should share this here.
Regards

ositadima1:
Here are some stocks, their fair values, and their divergence from fair value (VPD). I used 2022 reports as my source. PE was as of yesterday. You can see that I sorted them in order of rising PE.

Good job, why will you ascribe a PE of between 4 to 4.5 to GTB and Zenith. Even stocks with zero growth and return on equity of 10 will have a PE of 8 to 8.5

More than enough time...

Zenith Volume: increased for the past 5 weeks with corresponding price action
GTCO Volume : increased for the past 3 weeks with corresponding price action

Your assertion that FPIs might be entering the market is valid.

BabsO2:


The way GTCO is flying. Looks like some FPI's are already sneaking back. Till I find time to look up if their holdings have been updated on morning star. They seem to like GTCO and the 2022 FY and 2023Q1 suggest GTCO has turned around from the low quarterly earnings I & perhaps some others were worried about.

GTCO gained a further N1.05 today to close at N 26.15 While Zenith gained only N0.65 and closed at N25.15

ositadima1:
Here are some stocks, their fair values, and their divergence from fair value (VPD). I used 2022 reports as my source. PE was as of yesterday. You can see that I sorted them in order of rising PE.

Great input bro!

Here's the thing though...
Since you used PE, perhaps it would be better to work with their Q1, 2023 figures with a conservative projection of the balance of 3 quarters in 2023 or that of the trailing 12 months period to March 31st 2023, again using a conservative approach.

But I totally agree/align with most of your estimate.
Well, except for a few which seem a bit exaggerative and GTBANK, where I disagree. ...check well.

Fantastic job you did there though.
Regards

emmanuelewumi:



Good job, why will you ascribe a PE of between 4 to 4.5 to GTB and Zenith. Even stocks with zero growth and return on equity of 10 will have a PE of 8 to 8.5

PE, or Price to Earnings Ratio, is a financial metric that compares a company's current stock price to its earnings per share (EPS). It is not an estimated value.

ositadima1:
Here are some stocks, their fair values, and their divergence from fair value (VPD). I used 2022 reports as my source. PE was as of yesterday. You can see that I sorted them in order of rising PE.

Another question, how did you get your equity growth. Was it year on year, 4yr CAGR or a blend of 2yr, 3yr and 4yr CAGR

For the EPS I use the 5 years average and also the normalized EPS based on the average 5 year return on equity.


We are on the same page concerning Dangote Sugar, Total, Vitafoam, Nahco and APR fair value, but not on the same page as the others

STERLING - Running into Multiyear resistance but above some of my moving averages.

Volume appears to have deserted it in the last 2 weeks.

2.10/2.15 next stop above for likely digestion of move.

ositadima1:


PE, or Price to Earnings Ratio, is a financial metric that compares a company's current stock price to its earnings per share (EPS). It is not an estimated value.

So GTB and Zenith at a PE of 4 to 4.5 are still over valued according to you

ositadima1:


PE, or Price to Earnings Ratio, is a financial metric that compares a company's current stock price to its earnings per share (EPS). It is not an estimated value.

It is very possible to have an estimated or justified PE, based on the return on equity, earning growth, cost of equity and interest rates.

After the justified PE, some analysts make provisions for discount or premium, based on the efficiency, market leadership, debt profile, cash position etc of the company

emmanuelewumi:



Another question, how did you get your equity growth. Was it year on year, 4yr CAGR or a blend of 2yr, 3yr and 4yr CAGR

For the EPS I use the 5 years average and also the normalized EPS based on the average 5 year return on equity.


We are on the same page concerning Dangote Sugar, Total, Vitafoam, Nahco and APR fair value, but not on the same page as the others

Let me start by saying that the work of a fundamental analyst is very hard, which is why most analysts go for technical analysis. Gathering and studying company financials in detail is no easy task. Therefore, I decided to base all my data on one set of financials at a time, meaning by year. All of the data is from 2022, except for the current price.

I simply calculated equity by finding the percentage difference in equity from 2022 to 2021. EPS and ROE are based on 2022 alone. PE varies as current price varies.

I believe that if a company has done well with equity growth and ROE, it is likely that this will carry over to the next year.

ositadima1:



Let me start by saying that the work of a fundamental analyst is very hard, which is why most analysts go for technical analysis. Gathering and studying company financials in detail is no easy task. Therefore, I decided to base all my data on one set of financials at a time, meaning by year. All of the data is from 2022, except for the current price.

I simply calculated equity by finding the percentage difference in equity from 2022 to 2021. EPS and ROE are based on 2022 alone. PE varies as current price varies.

I believe that if a company has done well with equity growth and ROE, it is likely that this will carry over to the next year.

I understand, just that a year performance can mislead one.


All the same you are doing very well.


And you will learn more tricks as you progress

onegentleguy:


Great input bro!

Here's the thing though...
Since you used PE, perhaps it would be better to work with their Q1, 2023 figures with a conservative projection of the balance of 3 quarters in 2023 or that of the trailing 12 months period to March 31st 2023, again using a conservative approach.

But I totally agree with most of your estimate.
Well, except for a few which seems a bit exaggerative and GTBANK, where I disagree completely. ...check well.

Fantastic job you did there though.
Regards

Thank you, Sir. What I did there is child's play compared to what you do, trust me on that. I have quite a lot of things to improve on in my free time.

For Dangote Sugar I have an average 5yr ROE of 22%.


Based on my graph at an average ROE of 22% estimated PE will be 16.3 using average 5 yr EPS and estimate PE will be 13.6 using normalized EPS.

Average 5 yr EPS of Dangote is N2.37k and normalized EPS is N3.17k.


So Dangote Sugar should be N2.37k multiplied by 16.3


Or

N3.17k multiplied by 13.6.

I can decide to find the average of both figure to get my estimated value.


I will discount for interest rate by multiplying 12 which is the normal rate for a 10 year bond and divide by 15 which is the current yield on a 10 year bond

Got the normalized EPS of N3.17k.


By multiplying the current book value per share of N14.1 by the average return on equity of 22%.


This is better than using the current 2022 EPS of N4.50k declared by Dangote Sugar

Interesting discourse going on in here, some KPI being revealed.

With this epistle it shows that Dangote Sugar at the current price it sill very good.


If I now go to the free cash flow of about N7.00 per share. That should give the stock a free cash flow yield of over 35% based on the current price.

FCF margin is about 20%

thesilentone:
Zenith Volume: increased for the past 5 weeks with corresponding price action
GTCO Volume : increased for the past 3 weeks with corresponding price action

Your assertion that FPIs might be entering the market is valid.

i doubt this sir. FPI knowing there is high likelihood of devaluation with the incoming administration would rather want to wait till the devaluation to get more naira for there FX (rational economic behaviour + it brings certainty instead of speculation on the devaluation ). However, what is not in doubt is that there is positive net inflow into the market, so maybe it is local institutionals trying to front load the FPI (cos they are already denominated in Naira so no gain from devaluation) .

ositadima1:


Thank you, Sir. What I did there is child's play compared to what you do, trust me on that. I have quite a lot of things to improve on in my free time.

My Pleasure Sir.
I know the sky will be your starting point with the effort you put in your analysis. ...needless to say that you're proficient at what you do.
I also like the way you apply dexterity on many aspects of your estimates and sampling.
Keep it up bro!

Btw, na small boy I be oo! ...like you, we still dey learn too.

Do take care.

thesilentone:
Zenith Volume: increased for the past 5 weeks with corresponding price action
GTCO Volume : increased for the past 3 weeks with corresponding price action

Your assertion that FPIs might be entering the market is valid.

Whether it's LPI or FPI doing this, might not be a bad idea if one has loose money not in use for a month or two, to place it in the market for 1 to 2 months trading.

Caveat: Not an investment advice. Due diligence and personal situations should dictate actions.

It seems the subsidy removal is happening. (Subject to confirmation)

Zagee:
It seems the subsidy removal is happening. (Subject to confirmation)

What does this portend for the market?

otokx:


What does this portend for the market?

Can't really say, but if we could see a partial float of the naira just as foreign airlines are having a circa 500 exchange on the dollar, just maybe FPI may flow in. Inasmuch as that subsidy is removed, Nigeria will have to do ALL it can to attract foreign investment. The Stock Market is the first benefactor of such influx.

But all still theoretical

Abbasmh:
FTNCOCOA has been moving.
Now Full bid with 21M, any news?

Heishere:


The obtained about $6Million loan from a foreign company. How that translates to immediate value is what I don't know.

After all, they complained of lacking sufficient operating capital to boost production and balancing the books. If they could get this. Well, let's watch out.
https://thenationonlineng.net/ftn-cocoa-processors-completes-n850m-debt-to-equities-conversion/

Disclaimer: Still a SHITTY company for now

PEP EJIKEME NKEMDILIM GUARDIOLA.

Now you can go get that trophy!
...am sure @RabbiDoracle will be glad to welcome and celebrate it with you.

It is well

robobo:


i doubt this sir. FPI knowing there is high likelihood of devaluation with the incoming administration would rather want to wait till the devaluation to get more naira for there FX (rational economic behaviour + it brings certainty instead of speculation on the devaluation ). However, what is not in doubt is that there is positive net inflow into the market, so maybe it is local institutionals trying to front load the FPI (cos they are already denominated in Naira so no gain from devaluation) .

Naira has been gradually devalued over the last 4/5 months , it’s at 635 today officially for spot from cbn if you are lucky to get allocation for lc transactions using form m , don’t know if pta/bta , form a and q are still getting at a cheaper rates

I no know why my mind keep telling me that Access bank has more value, and is cheaper than both UBA and Dangsugar. Although the three are my favourites for now.

rmx:


Naira has been gradually devalued over the last 4/5 months , it’s at 635 today officially for spot from cbn if you are lucky to get allocation for lc transactions using form m , don’t know if pta/bta , form a and q are still getting at a cheaper rates

635 as CBN rate?

FTNCOCOA has continued it's Northward journey.

This is also possible.

Front-loading with billions though, using the low of the week for the past 3 weeks in GTCO gives a minimum of #6BN in transactions. I don't underestimate the local institutions but such amount in more than one stock if you consider the transactions in other banks as well (GEREGU & Transcorp are special situations) might still suggest it is FPIs.

The positive net inflow is a sure giveaway.

robobo:


i doubt this sir. FPI knowing there is high likelihood of devaluation with the incoming administration would rather want to wait till the devaluation to get more naira for there FX (rational economic behaviour + it brings certainty instead of speculation on the devaluation ). However, what is not in doubt is that there is positive net inflow into the market, so maybe it is local institutionals trying to front load the FPI (cos they are already denominated in Naira so no gain from devaluation) .

It is a good observation - not sure about the timeframe though.

BabsO2:


Whether it's LPI or FPI doing this, might not be a bad idea if one has loose money not in use for a month or two, to place it in the market for 1 to 2 months trading.

Caveat: Not an investment advice. Due diligence and personal situations should dictate actions.

May and baker is down to day.

Trading at 3.9