₦airaland Forum

yodiyokun:
@pumping, thanks for that wonderful spreadsheet.


It appears, there are soo many red columns for forward P.Es its absolutely ridiculous.

What exactly should the  average P.E ratio be? mid 20s to 30s seem to be the norm from that spreadsheet.

As you know it needs to be different for the different sectors but I have not included this level of sectoral analysis in the excel sheet yet though this is easily done. For the banking sector, I think 25 should be the average.

Generally a PE above 20 gives a red signal on my excel sheet. It is my tolerance level. You can change this to what you are comfortable with. Between 15 and 20 is Yellow and below 15 is green. However, I have to analyze each stock on a one to one basis.

BGL is having a private placement.

Minimum subscription 1M shares @N7 each.

Access the offer document from the link below.

http://us.f13.yahoofs.com/bc/473db9b4_a39e/bc/My+Documents/Private+placement+24+nov+07+CD.pdf?bfwTXTHBgKJmVeLZ

Save the link as a pdf file.

MyPeace:
hahahaha

i siddon dey look. lets see how it appreciates .

This is a piece of news from yesterday.

"Equity Assurance and Lasaco both had robust trades and closed with unfilled bids at maximum price, a trend which may persist tomorrow."

MyPeace:
hahahaha

i siddon dey look. lets see how it appreciates .

We both siddon dey look. I get some for pocket too

MyPeace:
@fatherof 2
Ok, thats about N4.3k

@pumping
i think if the price gets to the above as predicted by our PROPHET, i may have to cashout, l even want the money for Bank PHB offer.

thank you.

Hold means do not sell for now (It does not mean hold forever  ) which is what you want to do. Wait for some more appreciation.

In the very short term I think N4.30 is ambitious though. Lasaco's half year PAT was 0.54B, so a Q-3 PAT of 0.87B is not such a surprise.

RoughCut:
I think a better startegy will be to aim to grow the portfolio by a combination of the returns you expect from your investment and also capital injection from your personal resources i think you can reduce the time frame to achieve your goal. If you have fixed-assets as part of your portfolio( then you don't need liquidity injection) as this will grow organically without you pumping_{you are already pumping anyway} in additional cash but for the liquid assets side i think you might need some more capital injection for a few more years but then it depends on the size of your liquid portfolio and how deep your pockets are

Oh yes, I will continue to feed my portfolio with more capital and I also have other investments which should shorten the years.

MyPeace:
please somebody should react to pumping post on Lasaco result on page 87. lt seems am the only person suffering losses from lasaco? l bought at N3.25 4months ago, l hvnt joined this forum then shaa

Lasaco's result is good. Marginally better than projected.  They are on course for a PAT of 1.15B which is the highest I have projected for any insurance company currently. The forward PE is about 21 which is about the 3rd lowest in the sector right now. If you have the stock, my recommendation is to hold.

adeyinkat:
@All,

Quite a lively discourse over the past 24hours. Would like peeps to know that there are several silent members of this thread who value the education and information! So we all should be accomodating for the common goal is capital appreciation (whether hit & run, tech. analysis or long term). Let everyone decide on who to follow!

@Wanajo
Welcome back, hope to do same by this time next year i.e tske my family on a deserved holiday from dividend payouts but in the meanwhile, I missed your incisive posts.

Please what happens if after you give your broker a stop order and they still went ahead to buy the stocks on your CSCS acct (at a much higher price o)?

@Pumping77,
Can u please give a link to this much talked bout spreadsheet? I've tried to check your previous posts to see if l can get it, to no avail!

The spreadsheet is already on this thread. I'll post it again.

https://www.nairaland.com/nigeria?action=dlattach;topic=31554.0;id=57668

wanaj0:
N1bn (approx US$10m) portfolio is not difficult over TIME. It is that TIME element that is killing people. You need to be patient to be able to achieve that. That is a medium term goal for me!!!  See why some stocks even if they retuned 10,000% will not be in my portfolio

If you've bought Oceanic and NAHCO in the apst two years, you may be close to that.

Great insight. I toyed with some numbers when I started out on the NSE and I figured time has to be my good friend.

I figure that if I grow my current portfolio consistently at an average of 100% year on year for 5 years, I will have gone past the N1B naira mark. However, I will be more reasonable and plan for 50% annual growth in which case it can happen in about 8 years. I truly believe that money is just a number.

REZIGIRL:
@ to all gurus in the house,
I must commend d good work, have been learning silently for sometime now. Just imagining mysef reading this thread as if am preparing 4 an exam. Anyway, it's really worth it. Let's keep it up.

Got a teacher in d house already, _{he knws himsef}.  I appreciate this thread.

@pumping
Am really challenged by your story, am also a mechanical engr. and seriously developing mysef in stock analysis too. hope to become a guru like u guys soon _{if not better}.

thanks 4 that spreadsheet, it's good and taking time to understand it very well, got a few questions anyway, can I have your email, let's talk.

If you have any questions on the excel sheet, post it here and I will clarify.

wanaj0:
Which spreadsheet are we talking about here

My excel sheet is attaahed to this thread. Access it from the link below.

https://www.nairaland.com/nigeria?action=dlattach;topic=31554.0;id=57668

tonyjon:
@ pumping 777,

Please do you have any recent info on UNIC?.

Peace.

Only what Emmaachile shared with us recently. See below. You will find a report on UNIC.

http://www.emmaachile.itgo.com/

LondonCool:
I have been applying the Japanese Candlestick Charts on some few Stock and got a Long White Candlesitck for Livestock Feeds and NAHCO(buyer induced price push) and a Long Black Candlestick + Doji for GTB and Dangote Sugar (traders shold be on the alert for a potential doji morning star.ie. a Bullish trend).

Candlestick charts provide a clear picture of price action of various stock based on the relationship between their open and close values as well as the high and low values each day. The relationship between the open and close is considered vital information to traders and forms the essence of candlesticks.They are quite useful for day-trading punters and could be applied to support a stocks fundamental analysis.

Thanks. The open and close price have always been vital to me when placing orders. It's interesting to know it can be used for buy and sell signals also. Do you have a software for plotting this? If so, please share. In many cases, the closing price can be so misleading. Institutional and foreign investors tend to enter the market later in the day after judging the supply and demand situation for the day.

Good results from Lasaco.

LASACO ASSURANCE PLC
UNAUDITED Q-3 RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2007
PERIOD 2007 2006 ABSOLUTE CHANGE %CHANGE
TURNOVER (N'b) 2.09 0.54 1.55 288.6%
PBT (N'b) 0.96 0.16 0.81 514.4%
TAXATION (N'b) 0.99 0.12 0.87 739.4%
PAT (N'b) 0.87 0.15 0.72 496.1%
* Means Decrease & * Means Increase
Net Profit Margin 41.51% 27.06%

I only use the spreadsheet to alert me of the need to further analyze any particular stock at a point in time. So I just want to advice that it will be counter-productive if you decide to pick a stock on the list simply because the PE is low. In particular it helps me to avoid buying expensive stocks except there is news that does not support the numbers.

I had two minds about sharing this spread sheet because it can make folks lazy but I don't believe in re-inventing the wheel. The idea of sharing is to help those that need the raw figures and maybe help with the format. I am sure many folks can come up with something much better.

Happy investing.

I have also been developing a spreadsheet for stock analysis and I don't think there will be much improvement again until new results are announced so I will share it with the house.

For those that have been asking for similar, you can modify it to suit yourself. You now have to continously update the sheet with new results; updated outstanding shares and new projected PAT if necessary.

If you find errors with number of outstanding shares or interim results please let me know. Also, if you have results that I have not included, please share with me too. These are all the current results I have been able to find.

I have had to remove all comments because  of identifiable information. How I arrived at the outstanding shares may have been clearer. Just note that I have made provision for shares to be listed in the future including provision for 25% oversubscription. You can adapt this to your own style.

FatherOF2:
@ ALL MY OFFSHORE NAIRALANDERS

PEACE.

PEACE.

bigjay01:
Having said that though, I tend to lean towards Fatherof2's school of thought. I, like a lot of people are beginners, I need to know how the technicals translate to decisions.
If company X's PE is ~13, what does it mean for me? For people like like Roughcut, pumping, wanaj0,easimoni and the rest of the Gurus when you arrive at this kind of figures for company X it would help a lot of us if u tell us if you are buying or selling.

I do understand that yoy are not obliged to do so, but for brotherly love do it.

At then end of the day whether Jonah swallow fish or fish swallow Jonah, there was a swallow. Whether technicals or hit and run, all we want to do is make money.

If something is not clear, just ask and I'm sure someone will answer you. Most folks here are working full time just like you and there isn't always the time to elaborate on so many points.

I learnt the very little I know on this site and another sister site and I'm always here because I want to learn even more. I am a Mechanical Engineer by training and I've been working in IT for several years now so I don't have any training in stocks or the like.

I only started trading in AUGUST THIS YEAR. Just over 3 months ago. I bought my first stock on the NSE on the 13th of August 2007. I had absolutely no clue before then and I've been learning every day since. Some folks that say "I am inexperienced" have been trading for much longer than myself. I joined this thread only on the 15th of September.

I entered the market in August which is probably the worst time you could have entered this year with the bears but I I've still ended growing my portfolio significantly because I have adapted many of the things I learnt here to work for me. When I provide analysis, I am hoping someone will puncture it constructively so I can look even deeper.

Stock trading is not rocket science to me. If you really want to learn and you focus you will but you can never stop learning.

I have no beef with anoyone's method. I am always looking for something to prod my antenna. FatherOF2 has shared brilliant strategies here and I have borrowed (not returning them sha) from some too.

Fundamentals has worked for me big time and I am not about to throw it away. I learnt it here. Other methods are welcome. We are all learning.

I hardly ever buy a stock because anyone here says it is great. I try to reconfirm and convince myself that it is so. If I am not convinced, I let it pass.  You will do much better if you learn yourself. Very much better. It's all up to you.

ololufemi:
@ All,

I think its time we calm down,

People should stop castigating Fatherof2 about his methods because to be honest, he has helped some people make some cool money through this thread.

I also do not fault his method because it seems logical to me. In this market, there re short term and long term traders. I just got N1.5 million and I can't be long term on that based on the interest I have to pay.

Dealing on the floor of the stock exchange is a risky business and you must learn. I bought Wapco sometime last year @ N61 and did not break until recently. But I have been wiser and I learnt. I also seek for advise and decide whether to take the risk or not.

Also remember that the higher your risk the higher your rate of return on investment.

If your timing is right and market sentiments favour your entry and exit point, you can make above 50% within a 35-40 day period (AP)

Let all the gurus keep crunching their numbers and Fatherof2 provide his strategic advise.

Its ll for everyone's benefit.

I'm still in on FCMB, UBA and Oceanic.

There was no issue until the guy castigated number crunchers again today. Please let us be objective.  If you don't like a style just ignore it. No one has condemned his method. In fact he has been commended several times. The only advice was to let folks understand that nothing is set in stone so they can exercise caution. No one is an expert at predicting the market.

Zenith Bank.

However, I look at this, it is going to be a money spinner at current prices by either buying from the floor or the PO.

After making privision for possible 25% oversubscription from the coming PO, the projected adjusted PE for Zenith is 22.6 based on the TS price and current earnings. Only UBN and WEMA have lower numbers at the moment.

If the PAT forecast for the current fiscal year in the prospectus is even greater than N32B and is reasonable, this is going to be a very hot stock even in the short run.

FatherOF2:
@ ALL MY OFFSHORE NAIRALANDERS,

  I keep seeing jaw breaking number crunching flying across the screen.Why don't you translate your number crunching into something more tangible for the numerous not too discerning investors that watch you daily.BECOME REAL TEACHERS.
We keep seeing scenerios like " Mr. X have many shares do you have outstanding for Company J.Mr. Y replies 600bn.
Mr. X says " Oh sorry my mistake".My Z now adds his own 5bn too.
Many investors on this thread have one question ".HOW DOES THIS TRANSLATE TO PROFIT FOR ME.?, ".
Translate your figures to Buy and Sell decisions.  
Period.

Well, I don't know how this affects you. Just skip the posts. You can take care of your  own "students". According to Fela sha, Teacher Don't teach Me Nonsense. Also don't forget to answer the question for your "students", "HOW CAN THIS TRANSLATE TO A LOSS FOR ME)

RoughCut:
I'm assuming you added the 1.5B  convertible preference shares. As long as these preference shares have not been converted you will need to subtract these from the ordinary shares outstanding when calculating your EPS. Preference shares are treated differently from ordinary shares because they don't qualify for dividends due to ordinary share holders so i would make  the outstanding shares 17B until i can confirm they have indeed been converted to ordinary shares

I think easimoni is correct. I messed up my original calculation somewhere.

NSE (I tend to use NSE figure if it is the highest) lists the number of shares for Intercontinental as 17,987,322,448 and this will not include preferential shares that have not been listed.  If you add the supplementary listing it comes to 18.55B.

About Intercontinentals' additional listing. This was annouced way back and I think has already been factored in calculations by many investors.

Figures I have as at yesterday.


Price Out. Shar Proj PAT PE
INTERCONTINENTAL BANK PLC 29.99 18.92 18.40 30.83

Figures as at yesterday.

Price Out. Shares Proj PAT PE
R T BRISCOE PLC 28.56 0.45 0.64 20.40


AIRLINE SERV 19.39 0.63 0.42 29.31

@Omoba3

You should use the group. Also you need to deduct the minority interest of 0.019B from the PAT to end up with a PAT of 0.279M.

Please where did you get this detailed break down? It's more detailed than what I get for interim results.

Based on the attachment I think this is for CILeasing.

The outstanding shares has increased.  You need to add another 1B shares due to the 1.4B share PO that was 75% subscribed in 2006. You should end up with a PE of around 26 with outstanding shares of 1.6B at today's price of N6.09.

Omoba3:
To all gurus in da house. Are my calculations wrong or right based on the 9mths unaudited results? I used 600m outstanding shares.

Which would you use to determine the projected price? The Company or group figures?

Current Group EPS: 0.497

Current Group PE: 12.25



Current company EPS: 0.42

Current Company PE: 14.5

For which stock?

I have to add that FatherOF2' method is even more sophisticated because he is timing the lifting of TS and the release of interim results. No doubt a brilliant strategy which is really commendable.

dollarmani:
Gentlemen

I understand that you can not compare apples and onions. My point however is that it is thesame market that looks at all this tocks. The basis for investing in any stock by this market as far as we all know is earnings potential right?. Whether you are investing in banking, food or insurance, you are looking for who will give you the best value for evry naira you put. MY pseudo table above simply showed implicitly what that market generally seems appropriate to pay for each unit of the stocks. This comparison is valid across sectors because the denomiantor is common. "Earnings" . Now companies may have diff operatioanl challenges and advantages peculiar to the sector they belong to. However a non sentimental investor will look at earnings bottom line. (Earnings for each naira i put in which may translate into bonus issues, dividends or capital appreciation)

Riddle

Guys if i said to you here in one hand is ogbomoso grown agbalumo which if you buy for N1 today you can sell for N1.50 (and earn 50K)in three months and on the other hand i have californian glade grown oranges in the other hand which if you buy for N2 you will be able to sell for N2.25 (and earn 25k) in three months. Will you still need to look for the price of another strain of agbalumo say bakasi grown agbalumo (same sector) to tell you that the ogbomoso grown agablumo is a good deal.

My point is there are somethings that are obvious at the high level which further investigation only underscores.

You see, the real point is that you are projecting this income. If you are working with trailing PE's there is no problem. You see I can prefer a company with PE of 25 to a company of PE of 20 today if I believe the growth rate of company A is twice that of company B. So in 2 years time, based on todays price company A may now have a PE of 10 instead of 25 and company B will have PE of 15 instead of 20. Company A has made up for the initial premium paid on it's price.

As an example Berger Paints has a forward PE of 13.69 but this does not make it the hottest stock even in it's own sector. CAP Plc in the same sector has a projected PE of 44.29 while NGC stands at 17.12. You cannot normalize the prices in the way you have. There are other factors that influence the price.

Of course you are right that the numbers can serve to raise your antenna and prompt further investigation.

I bow for your proverb sha. Keep them coming.

shigidi:
@ easimoni,
FCMBs prospectus factored in the possible oversubscription(25%) and it gave an eps of 0.96. 25 naira is still a possibility and thats 50% appreciation. they are on course to hit the 15bn pat because they make majolrly in last quarter

Did you notice that the prospectus listed the same number of projected shares for full subscription and 25% over subscritption?

"*Forecast earnings per share and dividend per share for the years ending 30th April 2008, 2009 is based in 14,923,859,000 ordinary shares of
50 kobo each while forecast earnings per share for the year ending 30 April 2010 is based on the 15,850,825,000 ordinary shares of 50 kobo
each that will be in issue after the conversion of the preference shares."

Also the projected PAT for FY 2008 with full subscription is less than the projected PAT with 25% oversubscription for the same fiscal year end.

shigidi:
@ pumping777, one important thing u ned to know about dang.sugar is it will always attract market sentiment, it has a forward pe of 14 and it can easily have a pe of 20. the fundamentals support it. 27 naira wont be bad by march. i have good views of this coy.

That will make me smiile but honestly I consider Dangote Sugar a slow coach. It has the lowest PE in the sector and this or sentiments are not driving the price yet. The dividends payout is a major issue.

Actually, I never wanted to touch on this topic again but I can't help expressing myself after a few responses that I think will only allow some investors throw caution to the winds. Some folks are only concerned about others that may be misguided without the necessary caveat or caution. I believe, folks here are happy to find opinions and investment philiosophies that differ from theirs on this thread. I don't think this is the point.

Let me put forward an example. I read earlier today of someone massing up Fidelity Bank during TS to ride on the "bull" after lifting TS. Do we really expect the price of Fidelity to rise after TS is lifted? It could not doubt but I just don't expect it. I think it is an unnecessary risk to take. The principle is okay in this case but it has probably been applied to the wrong stock.

It is very okay to express ourselves as we like but it is also good to always inject a word of caution so folks look well before they leap.

dollarmani:
Pumping,


I saw in the thread that you intended taking a position in dangote sugar. What is your outlook on this stock.

If we do not even go in depth to number cruching, it is easy to see that

if the market feels N47 is the right price to pay for 7UP for for projected   EPS of 2.53
                                         N61.50                                  for CONOIL for projected EPS of  2.88
                                         N 56.20                                 for UBA for project EPS of 2.04
                                         N 46.69                                 for FBN for projected EPS 1.75 or less
                                         N52.48                                  for Ashakacem for projcted EPS 2.05

The market will wake up to determine that N36 is not the right price for dangote sugar with Proj EPS of 2.65.

I already took position in Dangote Sugar at N34.54 about two weeks ago. Then the forward PE was around 14.5. The order had actually expired with my broker the previous week becuase the price did not drop to my bid price, but for some reason they still bought it the following week but no complaints.

I will not make the comparisions (In effect you are comparing PE ratios though with EPS) you have made above for 2 reasons.

1. The companies are in different industries and so we should not compare PE ratios in this way. When the growth potential in an industry is high, then a higher PE can be reasonably accommodated as we have seen with the banks. In the same way in every industry some stocks are considered premium and will usually have a higher PE. Nestle and Zenith easily come to mind.

2. Dangote's dividend yield is high and so capital appreciation will tend to be lower.

I have a positive outlook on Dangote but my entry price remains below N35 for now. With the bulls on, I feel it is still a safe pick. I don't expect mega returns but it will let some of my spare money work for me instead of loafing in cash. I don't think the stock is currently worth N47 now though.