₦airaland Forum

ositadima1:
So you mean the earning grew by 50% for the 5 years not annually? Ok, now I see. Lol, fear catch me.

By 50% for first 5 years and 25% for the next 5 years.

Although the earning growth from 2019 to 2023 was over 70%

emmanuelewumi:
By 50% for first 5 years and 25% for the next 5 years.

Although the earning growth from 2019 to 2023 was over 70%

Not correct, each year generated its own EPS, you have to do the calculation for the present value of each year's EPS separately, then sum it up. I hope bankers in the house can help us with this. Megawealth where are you?

ositadima1:
To calculate the present value correctly, you need to discount each year's figure separately and then sum them up. Using an accounting calculator, the proper present value is much higher than the N1,500 you mentioned. The discounting needs to be applied year-by-year to get an accurate present value.

Warren Buffett will forecast the EPS for the next 10 years based on his projected growth rate then multiply by the average PE or justified PE of the stock whichever is applicable.

The will give him the expected value of the stock in 10 years time.

He will then discount the value by 15% to get the Present Value of the stock

ositadima1:
Not correct, each year generated its own EPS, you have to do the calculation for the present value of each year separately, then sum it up. I hope bankers in the house can help us with this. Megawealth where are you?

I am not talking Mathematics, I am talking common sense as used by the Oracle. You might read more on it.

I think he called it reverse something

emmanuelewumi:
Warren Buffett will forecast the EPS for the next 10 years based on his projected growth rate then multiply by the average PE or justified PE of the stock whichever is applicable.

The will give him the expected value of the stock in 10 years time.

He will then discount the value by 15% to get the Present Value of the stock

I understand that, but if you want to discount, you need to consider each year's earnings individually. For example, if the earnings in the second year were 78 naira, you would discount that for 2 years; for the third year, 118 naira would be discounted over 3 years; and for the fourth year, 177 naira would be discounted over 4 years. It's important not to discount the final sum over the total 10 years as a single amount, as that would be inaccurate.

yMcy56:
https://doclib.ngxgroup.com/Financial_NewsDocs/42498_PRESTIGE_ASSURANCE_PLC-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42499_ACADEMY_PRESS_PLC.-_QUARTER_2_-_FINANCIAL_STATEMENT_FOR_2025_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

https://doclib.ngxgroup.com/Financial_NewsDocs/42497_ALUMINIUM_EXTRUSION_IND._PLC.-_QUARTER_3_-_FINANCIAL_STATEMENT_FOR_2024_FINANCIAL_STATEMENTS_OCTOBER_2024.pdf

Hello @Mcy
Please, do you know if reconstructed transcorp units have been added to people's cscs now?

When you discount by 20% for 10 years, you will just multiply what you got as the value in 10 years time by 0.16 to get the present value.

I discounted by 20% because that is about the average yield on a 10 year bond

emmanuelewumi:
I am not talking Mathematics, I am talking common sense as used by the Oracle. You might read more on it.

I think he called it reverse something

Please don't speak like that. I'm explaining the correct way to handle discounting. Anyway, I'm done with this—go ahead and do it your way. You're the expert, right?

Or you fit bet, lets bet 50k that the way you discounted it is wrong, call your broker or banker and ask, no be math something.

ositadima1:
To calculate the present value correctly, you need to discount each year's figure separately and then sum them up. Using an accounting calculator, the proper present value is much higher than the N1,500 you mentioned. The discounting needs to be applied year-by-year to get an accurate present value.

Osita na beg I dey beg.Free this maths for presco. No put sand for this garri as per valuation yet.Allow this stock to still come down for us.No come make the stock out of reach.This stock is worth below #400..Thr results is audio for now

Streetinvestor2:
Osita na beg I dey beg.Free this maths for presco. No put sand for this garri as per valuation yet.Allow this stock to still come down for us.No come make the stock out of reach.This stock is worth below #400..Thr results is audio for now

Brother, no be math, he should just accept that he is wrong this time, base on his 50% annual increase in EPS. That is what I am arguing. Shebi, when you are right about something you would hold your ground?

Aradel might likely hit ₦300...

ositadima1:
Please don't speak like that. I'm explaining the correct way to handle discounting. Anyway, I'm done with this—go ahead and do it your way. You're the expert, right?

He tried to get what a stock should sell for in 10 years time based on the earning growth after which he will discount the 10 year value by 15% or just multiply the answer by 0.25 to get the present value

emmanuelewumi:
He tried to get what a stock should sell for in 10 years time based on the earning growth after which he will discount the 10 year value by 15% or just multiply the answer by 0.25 to get the present value

You still don’t get it. Let me explain again: if a business is expected to yield 500k every year for the next 10 years, and you want to discount it to the present value to determine the business’s worth, you need to discount each year’s earnings back to the present value individually. So, each 500k should be discounted separately using the formula you posted earlier. If you were to receive a total of 5 million only in the 10th year, then your current approach would work. But in our case, you’re receiving 500k year after year. I’m not sure how else to explain it.

Something is definitely brewing in UBA.

These volumes are not ordinary...

ositadima1:
Brother, no be math, he should just accept that he is wrong this time, base on his 50% annual increase in EPS. That is what I am arguing. Shebi, when you are right about something you would hold your ground?

Based on your approach you could be right which will shoot the value above his own Based on method he used for margin of safety. All that is going to be shouting 1k and 1k plus for that stock. This is a stock that does not need to pass #400 now for our own good.Abi you want to be adding more when e reach 1k.Abeg I no want watin happen for saplet happen yet here.This is our own crude oil as we missed saplet.
Walahi each time I see the price wan go up.My mind they cut.i bought some total at 230 too.Na this kind valuation push the thing reach 600.Since then I no fit add better quality. I know you go still wan buy more going forward..lol

[quote author=ositadima1 post=132661604]

ositadima1:
You still don’t get it. Let me explain again: if a business is expected to yield 500k every year for the next 10 years, and you want to discount it to the present value to determine the business’s worth, you need to discount each year’s earnings back to the present value individually. So, each 500k should be discounted separately using the formula you posted earlier. If you were to receive a total of 5 million only in the 10th year, then your current approach would work. But in our case, you’re receiving 500k year after year. I’m not sure how else to explain it.

That is discounted cash flow.

Warren Buffett doesn't use it because of its many assumptions.

What he does is to get the growth, compound for the next 10 years or adjust after the 5th year. Whatever he gets in the 10th year will be multiplied by the average PE.

Discount the final value by 15% backward for 10 year to get his own Present Value.


It might be Mathematically wrong but it has been serving his purpose are it is very easy for people like me wey no sabi mathematics to apply with huge success

KarlTom:
Something is definitely brewing in UBA.

These volumes are not ordinary...

RI pricing

Streetinvestor2:
Based on your approach you could be right which will shoot the value above his own Based on method he used for margin of safety. All that is going to be shouting 1k and 1k plus for that stock. This is a stock that does not need to pass #400 now for our own good.Abi you want to be adding more when e reach 1k.Abeg I no want watin happen for saplet happen yet here.This is our own crude oil as we missed saplet.
Walahi each time I see the price wan go up.My mind they cut.i bought some total at 230 too.Na this kind valuation push the thing reach 600.Since then I no fit add better quality. I know you go still wan buy more going forward..lol

The issue here is the calculation, not Presco. The calculation is incorrect, and it would be wrong for Zenith Bank, UBA, or any other company. Do you understand?

emmanuelewumi:
That is discounted cash flow.

Warren Buffett doesn't use it because of its many assumptions.

What he does is to get the growth, compound for the next 10 years or adjust after the 5th year. Whatever he gets in the 10th year will be multiplied by the average PE.

Discount the final value by 15% backward for 10 year to get his own Present Value.


It might be Mathematically wrong but it has been serving his purpose are it is very easy for people like me wey no sabi mathematics

Reference the book or post let me see.

emmanuelewumi:
By compounding quality a fund manager. They sent a free soft copy to me

Is it possible to get this from you, sir, privately?

designking:
Aradel might likely hit ₦300...

Someone will still say N250 or N200

Let holders calm down and do findings before "panically" offloading

emmanuelewumi:
Nahco is a N50.00 stock. This is a stock that sold for N2.50k in 2020

May Japaul be so in Jesus name

ositadima1:
Reference the book or post let me see.

He has said it on several occasions that he does not use discounted cash flow. He likes to keep things as simple and as uncomplicated as possible

You can do a Google search

What I described is Warrens variant of DCF


He also uses PBT multiple and owners earnings multiples instead of net income used by most investors

ositadima1:
Reference the book or post let me see.

You maths is perfectly in order.If you push that stock enter bid from now till end of this yr,you done buy job..lol

Oya go try that maths approach for elleh lake so that your interest go leave presco for now.Tell us the value you get with it on elleh lake

Agbalowomeri:
Why am I having ideas?

Your mind is corrupt. You need to go for deliverance session with Pastor Veecovee

emmanuelewumi:
He has said it on several occasions that he does not use discounted cash flow. He likes to keep things as simple and as uncomplicated as possible

You can do a Google search

What I described is Warrens variant of DCF


He also uses PBT multiple and owners earnings multiples instead of net income used by most investors

I can’t see your approach to discounting annual earnings. Let me remind you that Buffett studied business and economics and would not make these types of errors in calculations. I’ve reviewed several books and watched videos by Buffett’s followers, and they all use the standard method. I have never encountered your method before. If you’d like, I can provide references. We learn every day.

Another one

Mpeace:
Aradel to pay N8 interim dividend

sterlingD:
Please where you see the corporate action make l see am l want to check something

I don see am

https://doclib.ngxgroup.com/Financial_NewsDocs/42507_ARADEL_HOLDINGS_PLC-ARADEL_PRESS_RELEASE_-_INTERIM_DIVIDEND_CORPORATE_ACTIONS_OCTOBER_2024.pdf

ositadima1:
I can’t see your approach to discounting annual earnings. Let me remind you that Buffett studied business and economics and would not make these types of errors in calculations. I’ve reviewed several books and watched videos by Buffett’s followers, and they all use the standard method. I have never encountered your method before. If you’d like, I can provide references. We learn every day.

I have been trying to post attachment to show that he does not use DCF. He detests it. He does not use EBITDA also


He gets the 10 year forecasted value and then multiply the figure by 0.25..

Based on this if the forecast is that the investment should be worth $500 in 2033, he will value it at $125


My last post on the subject matter

Do what works for you

ndept:
Your mind is corrupt. You need to go for deliverance session with Pastor Veecovee

Na Veecovee go dey pastor us in hell fire