₦airaland Forum

crazyT:

@ Wanaj0

I have this question for you, this is based on the fact that I have noticed (on this thread) that you are good at jumping out of a ship before it wrecked

Yes, you could not have put that better!!!

Temmie10:
Anybody watching ikeja hotels?
Here's the problem i have with new and illiquid companies on the nse.
Its been on a freefall for a few days.
Only 3 deals worth less than 100,000 naira today and it lost maximum 5%.

FirstInland's also moving very interestingly, closed at 13.14 today

Ikeja Hotel - There are only 3 deals possibly because there are more people trying to sell but no one is willing to buy.

For the record, the stock has been falling almost consistently for the past 3 weeks. From a high of 8.20 on the 15th of October to close at 4.76 today.

The declared result in my opinion did not justify the hype. So I suppose you are right that the sharp rise in price may have been due to the fact that the stock is illiquid.

RoughCut:
Yes you heard right and i don't think you are missing anything they are repaying the loan from the proceeds of the offer and the rest will go on working capital and it will be 70% owned by Flour Mills

I remain with the chicken that owns 70% of all eggs.

Splendid parable!!

Oceanic, what can you say? It is a waiting game. Heavy speculation? Maybe. The price is crashing I believe because of the oversubscription that was absorbed. 22B shares is not a joke. I am holding on because of this rumoured mega results to be announced and I know this is a fact from the grapevine. What is the PAT? 30B No way!!!

I do not believe in compromising any financial officer but I could not help asking an Oceanic ED for a few hints this weekend about this result we are all eagerly awaiting. This is what was said and the person no go fit give me jist.

- As at year end 2007, Oceanic had a balance sheet that beat Zeniths'.
- The PAT that will be declared by Oceanic will "shock" the banking industry (How much I no ask and paddy no take style tell me, haba).

Ok, you will ask, why did I not ask for figures but like I said I don't believe in compromising anyone's position.

So now how easy is it to sell this stock with this kind news? So some have decided to wait. If you have waited this long, you may as well hold on to the end. The result should be out this month according to the grapevine.

I have been buying diamond since last week. The results I saw today gives even more reason to buy. The bank is doing GDR. Possibly people are selling for fear of TS. I really can't figure it out.

The insurance companies keep churning out rosey Q-3 results. Custodian and Oasis also seem to have come out strong today. Regarding Custodian, does anyone have the projected PAT for year end? I think there will still be even better results from the main players.

I think we got the info that Flour Mills will retain majority interest in Bagco? So I'd say buying Flour Mill means you are getting the chicken and the egg coupled with the good price of Flour Mills right now.

Wema going on TS this Wednesay? Authentic? Wow. Maybe man needs to act sooner than later.

Costain, Costain, Costain? Hmm. Well, I'll wait for the prospectus. I'm not taking that out of my radar yet.

tonyjon:
Pumping 777,

I have a question for you. If you have 400k and you want to buy shares from FCMB and COSTAIN, which of them will take large portion of your money?. Please state the percentage.

Peace.

I have not seen the prospectus for Costain, but based on what I know now, Costain will get the chunk of the money. It's also important to realize that Costain holds more risk than FCMB so it depends on the type of investor you are.

Personally I can accommodate the risk level of Costain so I will go for 100%.

Ben0524:
To All GURU's

Nobody seems to be talking about UNITY BANK, because i bought it at #8.41 some months ago and now it has fall drastically to #5.35 and i heard that they are planning to raise money from the market very soon, Please i need an UPDATE on this BANK.

INSURANCE Sub-Sector: I read that NAICOM is planning another Consolidation and some Firm are going to merge again, How true is this?

Who has got info on N.E.M Insurance, Unity Bank, Transcorp and Japaul oil?

PLS: I NEED AN ANSWER URGENTLY


To ALL GURUS IN THE HOUSE,

Having posted this thrice I can tell this is an urgent request

There is no information on these stocks as far as I know. Unity declare a PAT 1.37B for last fiscal year which does not do much for the 14.7B shares outstanding. If you are holding on to the stocks, pray for a strong interim result which will likely be the case if they are meant to be coming to the market early next year. Read more about Unity here, http://allafrica.com/stories/200710170198.html.

For the other companies you've listed I don't think there is any news in the public domain. Japuaul is still on TS. Transcorp is having a hard time but really this is expected for now. I hear those that bought from the private placement are also offloading.

Based on the companies you have listed I think you are concerned before the prices are dipping. Just understand that no news is also bad news for investors.

gbolex:
I really need your advice on this issue. Am thinking of sell my zenith bank shares to buy their offer(technical suspension), currently the it goes for N46 in the market. will it be wise for me to sell it or hold on till the offer is over before selling it. My fare is this
1, Is there any hope the price will raise beyond N46 after the offer.
2, Should I hold on to it, take advantage of the right issue before selling my shares and buy the right issue for N36 and sell my shares after the offer.
If you guys can remember first Bank did not do well as people really expect
NB
i only want to maximize profit

1. Retain your shares until you know the cut off date for the rights issue so that you can participate. As in the case of Fidelity, this date can extend well beyond the date of TS so don't be caught napping.

2. After you are sure of qualifying for the rights, you can now consider the next step. Ideally I would expect the price to rise after TS because of the last interim result. However, I can't say if there will be an impact from investors like yourself that have subscribed to the rights issue and will now prefer to dispose of their shares to recover some cash.

In my case, I am holding on to Zenith till after TS except I get a scoop and need to raise funds.

babaife:
@ pumping

i think we are missing something here. while i appreciate the individual nature and strategy of each investor, i beg to disagree with the position of pumping on the following grounds:

a) the PE ratio of any company should not be too low as canvassed by pumping. your PE should be maximised to the best possible level. this is important because, the ONLY way to determine the growth of shareholders investment is MARKET VALUE of their shares. also management efficiency is measured by how strong its PE ratio.

Simply put, the share price in an efficient market is determined by combination of factors- high earnings, growth rate, dividends policy, management team experience, high rate of return, strong internal control system among others.

therefore, if the PE ratio is low, the company risks being acquired by a stronger company because it it perceived as BEING WEAK. a case in hand was the hostile romance advance made by access bank to afribank sometime in january 2007.

having said that, if you discover a company with a WEAK or LOW PE ratio, please buy because the PE may rise in future. however, if you hold an investment in a company whose PE is nosediving, it means something drastic is required as it portends a BAD OMEN.

I think you have really missed the point. For an investor, the lower the projected PE of a company compared to others in the SAME sector, the better, provided the company has not cooked it's books. You are looking at the sentimental position of the Executives and Management of the company. Agreed PE cannot be used in isolation of course.

The arguement about possible takeover does not apply here. Takeovers in most cases will increase the value of a company. This could be a problem for the Executives and Management of the company who do not want to give up ownership but definitely not for the shareholders because they will end up being offered the fair value of their stocks. It could be an issue whereby the new owners decide to delist the company but that is a different story. The net result of a takeover for investors is the realization of the future benefit of a company before it is due.

If Afribank is acquired by Access bank how is this a loss to the investors? The investors will have to be offered a fair value for their shares. This is in fact a very desirable position for any investor to be. Look at Standard bank and IBTC saga. Have investors lost out? Low PE or not, many companies are still being acquired. Even with a high PE a company is easy to acquire if the total value (capitalization) is low. In other words, being a small company, buying it is affordable for those that think they can do better with it (Ability to generate an even lower PE based on current prices).

And what do you mean by saying the PE of a company is nose-diving? Nose diving is a negative term for something undesirable and should not be used for PE.  PE could be falling because the price of the stock is crashing due to maybe some negative news that could impact the returns of the company in future. However, in this case, the projected income will be adjusted to reflect a more realistic PE.

It is like saying the expenses or debts of a company is nose-diving. Is this not desired? 

Having a low PE ratio does not imply that a company is WEAK. It simply means that it is likely to be undervalued and it could also be a target for investors which will eventually increase the price due to bargain hunters.  If the projected PE of Zenith banks drops to 10, tell me wether the price will not rise or someone will not try to acquire it. Either of these will  benefit the current owners of the stock.

tonyjon:
@ Pumping 777,

No cause for alarm. Transcorp will surely bounce back. It is just a matter of time.

Peace.

Just that I don't have Transcorp or I may just be sweating by now

Anyway, as you talk, let's hope the stock bounces back for the sake of the loyal investors.

Transcorp lost 5% today to close at 3.63 Naira. What is going on? The new certs? Is it heading for 3 Naira as predicted?

Rob-roy:
Gurus,
How do you guys raise funds for all these offers in the market?? I have learnt by being on this thread that there are "POCKETS" and there are _pockets.(, such as mine ). Any help on how to raise funds? Is it wise to borrow to invest? If the money works for me and makes money is that a dangerous idea?
On the issue of having no more than 5-7 Stocks, just look at the market now and see what we are dealing with. Zenith, Bank PHB, FCMB, Fidelity, Bagco in the air, WEMA, COstain etc, which one person go ignore??

- As per raising funds my recommendation will usually will be to have a set figure you will invest in the market. When necessary sell some to buy some. Borrowing is a tight option. Do it only if you have other means of paying back rather than waiting on the performance of the stock.

-  As per portfolio size, rate all the offers and discard those at the bottom (if only I will listen to myself  ). Of the list you have above there, discipline yourself to go for only one or two for instance. Don't try to participate in all  the offers since some are better than others. However, I understand that because of oversubscription it can be advisable to participate in multiple pos so you don't have too much returned funds. However this is not a problem for someone with a _pocket

One place I've now seen Dangote Flour on the site is under the analysis section. It is one of the stocks you can choose for analysis but no data was populated when I generated the graph.

husu:
Saw dangote floor on nigeriansecurities at 8.6,is it rael or fake?

Where did you see this on the site? I go like apply for them to sell to me at the price o.

@ frankiriri

Zenith?

easimoni:
Thanks for the IBTC attachment. They have Wema's fair value at N18, but once it crosses N13, I'm going to start selling.

Really, ? 13 Naira? You will sell Wema?  Well, at 80% of your portfolio the risk is high. I've never been brave enough to have any one stock make up more than 20% of my portfolio. Well, you were very calm earlier this week for someone with so much exposure. You try.

I will not consider selling until I hear Wema has approached SEC. Wema is only 10% of my portfolio so I'm ready to face the music (and dance if necessary).

easimoni:
5-7 is my optimum as well. I've seen portfolios with 20+ stocks and I never understood why.

I'm still working on my patience to become a long-termer. Thing is I see too many opportunities and tend to dump my 9-12 months stocks to HIT that opportunity. Paid off this year with Wema (was 80% of my 'folio) but with my BP trending up , I no go try am again o!

This remains one of my very bad habits. Having a large portfolio that requires too much effort to manage but I am improving rapidly. I have 2 distinct portfolios. Long term and Short term. For long term I typically have between 8-10 stocks and really these stocks are locked. I really don't have any problem with this.

The Short term portfolio is the real problem. I never seem to be able to get it under 10 and the problem is over speculation and analyzing too many stocks. My long term target is to stick to a max of 6-8 stocks at any one time and only go for the kills!

@pangolo  I never analyzed Skye REIT fund in the past so I don't know if the numbers being crunched are correct.

If it is true that the investment manager will get 30% of anything made above 10% of net on top of the Management expenses, I will be raising both eyebrows. It means that if the fund does 100%, apart from the Management Expenses, the Managers recieve an incentive of another 27%. It is up to you if you are happy to pay such premium.

Regarding the business plan I have to clue. I don't believe it can be as gloomy as this writer suggests though. 2 billiion total for property investments and they will not borrow? Not even mortgage? It will be tight.

If you've already put your money into it, take your mind off it and move on to something else.

hispy99:
This is the info I have on BAGCO

Issued and fully paid: 4.35 billion shares
Offer for Subscription: 1.865 billion shares additional shares

Flour Mills will still own about 70% of the firm after the IPO. Also 50% of the 1.865 billion will be preferentially alloted to identified investors.

Price is N3.90.
The info above may change, but it should not devaite from these numbers dramatically

You be better insider. Thanks.

It makes even more sense to maintain majority interest. For those thinking of dumping Flour Mills because of this, it is time to re-think.

Mr. Cee:
@ EASIMONI

Thanks a lot but at the price 8 Naira (FIDELITY) don't you think it might be kind of good to gamble with caution? what do you think?

Be careful with this "discount" because it may not be as much as it looks. Existing shareholders may be issued bonus shares and you won't be entitled to it. This will chop into the "discount".

Mr. Cee:
@ Wanajo, Easimoni and Pumping

Will it be a good move to invest in Fedelity PO?

Not with my money. 

If you must buy PO right now, consider FCMB.

yodiyokun:
@Wanaj0,

This one that Bagco is coming to the market, is it wise to wait for bagco and buy it rather than plunge into Flourmills.

I don't know why Flourmills wants to share the profitability of their money spinner with the public?

I am thinking that Flour Mills will maintain minority interest in the company. The plan in my mind will be an expansion of Bagco operations so Bagco may still contribute as much or even more to Flour Mills than it does now. The prospectus will clear the air.

Rob-roy:
@ Pumping 777
Sir,
I have a question for you, From the perspective of a chap with very limited funds, would you please help me narrow my prospective purchases to 2,
My favorites are :
1. upcoming Bagco PO
2. Costain
3. bank Phb
4. Zenith PO
5.MAYBE Obajana, I heard someone mention it, don't know if it is still coming out,

As you can see I am looking for IPO's and cheaper stocks that I could get more units of versus quality ( no Nestle for me yet!)
I already have 2 choices but I need corroboration from a guru before I take the plunge.
Thanks for your assistance, !
Any other Guru who has the time to spare on my question will be highly appreciated too.

Frankly I can make a final decision without seeing the prospectus for these offers but based on what I know now I will have these candidates.

1. Costain
2. Bank PHB or Zenith

hispy99:
@Pumping

Tranex result is for 9-month ending Sept 2007 and not Q1. PAT will be around N54million for FYE 2007 if you annualize and if you use your 132 million shares outstanding and N0.81 price, then you are looking @ a PE less than 2 . Is this possible? . Not quite as juicy using your PAT N180 million, but still looks too good to be true. Is this 132 million shares outstanding correct? Guys please help

Thanks for pointing that out. I said I did not want to print the numbers for the fundamentals. It rocks.

hispy99:
I have 2.08 billion for Ikeja Hotel from their prospectus.

@hispy99 Thanks. Please what is the projected PAT for 2007 from the prospectus? I can see that the results for the last 2 years are consistent. Is this the same for years before 2005?

I don't feel the stock is such great value right now. The PE is around 14 and the growth rate is modest Year On Year 2005/2006 at 18% for PAT. The price is dipping consistently though so it may come into the radar soon.

tonyjon:
Hi Pumping 777,

Please what do you have to say as regards these companies:

1.C & I LEASING 2.STACO INS. 3.AIR SERVICES AND LOGISTICS 4.CHELLARAMS 5.AFRICAN PAINTS 6.IKEJA HOTEL

Peace.

I can only comment on 2 I believe I analyzed recently.

1. C & I LEASING - I think this is good Buy based on fundamentals and the potential growth. I'm looking for the stock at N4.90

2. CHELLARAMS - Hot. The fundamentals are good and the company has been consistent. I will buy at market price tomorrow if I will find but the stock is just too illiquid.

Can anyone confirm the outstanding shares for Ikeja Hotel? I have 1.7 Billion.

mee25:
Dont you think a FY PAT 0f over N30Bn is possile, having in mind the strong fundamentals of FBN; wishful thinking though

In fact it is possible but this will be an increase of 8% over the projection. It's why I say it is not a big deal. Zeniths projected PAT was around 26.5 Billion and they are poised to exceed this by over 20% even without funding from it's PO.

hbrednic:
first bank is doing good judging from their report, the suspence now has moved from wema to mr union bank.
when are they (unionbank) going to open their book?

Union bank is leaving it too late. Before long we'll stop counting them with the better people.

mee25:
No body has made any comment on FBN 2007 2Q report. N15bn PAT is very impressive considering the fact that they projected a FY PAT of N18.37bn for 2007. I think this is an indicator that FBN is going on the right direction.

What about GT bank. Any news

There is no surprise here if you ask me.

First Bank is still within the earnings projection. It may be exceedrf but there is no indication of a major depature.

Moreover, with the PO subscribers lurking in the shadows, the result is really nothing to get excited about. Can't they emulate Zenith?

hbrednic:
i feel like punching my compu.
sold my wema yesterday for N9.I0, now wema has started climbing the hills.
what a nightmare

Don't beat yourself to much. It was the first reaction of most of us.  I was only lucky because I was unable to sell on Tuesday or I would have been singing the same song. No one really figured that this result will come out so soon, so many were positioning to enter at a lower price. I was so sure the price was going to crash but Wema had a different plan.

Rubbing minds with my people here on Tuesday convinced me to cancel my sell order once it was not sold on Tuesday though I had no thoughts that a rally could come so soon.

This is why you can be so right in your analyis but timing will screw every thing up. We win some we lose some.

Something that may have escaped our attention regarding the behaviour of NSE. Can you imagine that Livestock Feeds has even been rising marginally since the disastrous FY results followed by the poor interim results? That is NSE for you.

Even for Wema we have to wait and see.

Temmie10:
@ all
Wema's result is just too good to be true!
That 1st quarter result was more than 2006 full year PAT.

@Tmoni,
i will be waiting for my bottle of champaigne

Yes o. On the other hand FY PAT for 2006 was low because of the provision made for risk assets. Gross earnings was 26.4 Billion which should not translate to a PAT 2.6 Billion. Afterall it is not a manufacturing company. ;