₦airaland Forum

@ drdaniel

thats the point. there's too many more shares to be added, 3.53 billion to e precise
And the current earnings of the company is being dwarfed by the extra shares.
the company would have to grow pat at more than 200% per quarter to arrive at a decent eps.

Half year pat of 213 million is not good enough for a company that is valued at over 16 billion naira.
NSE website currently lists NEM eps as 0.04.

This is no way the best buy in the market at this time. Buyer Beware

On NEM insurance

This company had a rights issue last year where 3.5 billion new shares were offered.
NEM, also released a half year result last week where 2nd quarter PAT was 213m.

Lets jus say i will not be buying NEM insurance anytime soon.

felo12:
I bought first bank share last year september, but i was told by my broker that i'm not entitle to the 1 for 1 bonus, Can someone please shed some light on this issue, Cos I'm about to rock the boat with him,

What price did you buy the first bank shares then?

@ drdaniel

I think stockwatch has not used the latest results to calculate the eps. they have probably used rather outdated reults. This can be understood in the light that many insurance companies have released results in the last 1 month.

Even a pessimistic eps calculation  should still arrive at a figure of at least 0.07 for cornerstone and 0.12 for mutual benefits. Cornerstone half year result was 270m pat.
so u probably want to be careful with those eps you have listed.

NEM seems to have a forecast eps of 30k but i haven't seen any result to back that up. but i have read in many places that it is good.  advise you try to get your hands on some mo info on this one.

bug79x:
sure just saw that unaudited result. lasaco 560m with about 1.176bill out.shares.
better hold on to that stock

fi-le!

I hate to spoil the party but Lasaco's po last year was supposed to raise 4.4 billion shares so there is no way they have 1.176 billion shares.
check http://www.lasacoassurance.com/prospectus.pdf
if u factor the extra shares, then its not as attractive but still decent compared to the industry.

@ Kenjo

If i am being honest, you've actually done quite a good job and i dun see you losing money with your list.

@ Easimoni
strike cornerstone off that list for the time been, they are growing number oif shares faster than they are growing pat lol and their last result which was half year was dissapointing, same goes for eps.
and i think mutual benefit added their extra shares about 2 months ago so what u hav shld be correct, mutual benefit's june 2007 was actyally out a few weeks ago, i just can't find it now

@ Shigidi

On Insurance:
I dunno if you've seen the movie "Wall Street", Michael Douglas makes a statement in one of the scenes.
"I look at 99 deals a day, i choose one".
That is very similar to my take on the Insurance sector.
There are 25 companies listed and more on the way.
But even in a funny sector, the good companies will do very well

I am all smiles over the crusader result though.
How can a company show less than 200m in the first 3 months and then almost 600m PAT in the 6 months result?
If they can maintain/grow pat at any rate close to what they are doing, then this still has a long way to go. it still looks cheap even at a price of 5 naira.

Mutual benefits is not too bad too, waiting for their result tho, on a 1 yr plan, this is probably a good time to enter mutual benefits. IT is well documented that wapic has good potential but you cannot buy them all. I am restricting myself to just 2 stocks in insurance as a matter of fact.

@ Easimoni,
thx for the ibtcreport. looks like the ei abt oando is true. they have some listing on the jse(south africa) and about 4 million out of the 18 million dollars half year profit was not factored into the jse eps calculation.

@ knowall

"if it now grows fro 0.63k to 2 naira", u really know all.

i really like you, your way of playing around figures and all, esp that u dun use any facts.
Zenith stock at us$2.00?, it will have to be the biggest bank in africa, but they will still split it so you're still dreaming.

but since u no wan hear, u don win, zenith will reach 200 so go and buy buy buy and wait wait wait.
The truth is not for everybody.
Enuf said!

Soludo is definitely a gem. The point about effective pricing systems is a good one.
When coins are valuable, whole telephone booth systems, retail systems, transport systems can be built around coins. Plus if it is well managed with good economic reforms, with time the buying power of nigerians will increase significantly.

@ otoks

Fidelity is definitely not cheap at the moment but i suspect they will release a very good result before their po so you might wanna hold on for the moment.

Omoba3

I dunno much about this but i guess the first fundamental question that comes to mind is "How many people still drink trophy beer and betamalt?"

A business cannot be separated from its price. Lets keep fingers crossed tho.

@ Easimoni, shigidi n ALL



Crusader Insurance Plc 2nd Quarter Ended June 30th, 2007

                                            2007                         2006

Turnover                               1.3b                         0.78b

PBT                                       635.7m                   171.6m
Taxation                               (42.5m)                   (26.3m)

PAT                                       593.2m                   145.3m



Looks like somebody saw this result days ago, the price has steadily gone 5% up a few days now and then eps even with the additional shares is looking like 37k.

@ egoldman

Before you go and fight with your broker. Let me jus try to put things as straight as possible. The bonus shares for the year ended 2007 has not yet been credited o. It will be credited to all those still holding the shares of FBN as at 20/8/2007.

What you read on proshare was the bonus issue for the year ended 2006, i read the report too. you are not entitled to that one and that is why your broker is correct.
If anybody has recieved bonus for FBN 2007, let them speak up,

@ easimoni
i will try to post some more analysis.
How many shares does Oando have in issue? i read that it is 572 million. Can you pls doublecheck that for me.

Have you all never read the bible?

Or why are you so quick to condemn the man of God.

It is possible for a man of God to proclaim something and for it not to happen. There was Jonah.

I dun attend latter-rain but i happen to know that tunde bakare had said many years ago about a northern ruler bringing nigeria into a new phase so i wouldnt be surprised if that was yar adua.

secondly the issue about a christian prophecying that God would choose a muslim for the country. It is very possible. There are more muslims in nigeria and it only makes sense that a muslim should rule. The bible is full of pagan kings used by God, nebuchadnezer, xerxes etc

@ shigidi

On second thot, i have looked at it again.
If the company can sustain their results, this will make for a good buy.
Eps is edging towards the forecasted 46k.

no i dun subscribe to zenith monthly reports but i have access to a number of their reports

@ Shigidi

I am a bit lazy now, not in the mood for any calculation lol
So i have chosen the easy way out.
I am uploading 2 reports on ci leasing.
They are from zenith securities, one is a technical analysis, the other is a fundamental analysis
they were done in late may but u will find data for your analysis.

I will go thru again later today and see what i can come up with.
It seems Japaul will only be out in september, the fuss appears tio have been
caused by the applicatn form on their websie

egoldman:
Hello people , I need to be cleared about something here , it could be either i am wrong or my broker is wrong (playing me ?) i have bought some Firstbank stocks on the floor in the month of February 2007 .
Now i have read somewhere on the news (www.proshareng.com) that first bank have credited the bonus shares they declared this year to the investors cscs account, i had been thinking that this means i am supposed to be among those those that would receive this bonus, but i called my broker last night and she was telling me that i am not supposed to get the bonus , saying its for those that bought last year , she was also saying something like they will credit the bonus shares to investors cscs account only after their year end , could someone please tell me if i am the one thats wrong here or if its my broker .

@ egoldman, i think your broker is quite right on this one.

KnowAll:
the bottom line is, the blue chip stocks will grow, and nothing is goning to stop them from growing as the economy expands. Do you think blue chip stocks like Zenith  will ever be £11.00,  i wait for that day.

WHile u have a point about inherent growth in good companies, you have to be very careful. FBN and Zenith and most of the Nigerian Stock exchange is growing many times faster than the economy and are not in any way growing at par with the economy.

That itself should send you warning signs. On FBN and Zenith reaching 200, it will NEVER happen!!!, at least not in the next forseeable future,
WHY?
Because Naija companies are fond of bonuses, public offers, stock splits and all practices that dilute and prevent share prices from hitting the ceiling, the reasoning is that the prices will remain attractive especialy to people who only consider the share price just like the case you have given in your examples (Hence even when FBN reached 77, it was split into 32 on a bonus of 1 for 1)

For example do you know that in theory, First Bank's Share price as of today is easily more 200 naira if there had not been huge stock splits and bonuses over the past 5 years?

Easimoni has given you a very good short answer. Anybody who is knowledgable about stocks will tell you that the share price is of very little use as an indicator to whether a company is cheap or not. Think about fundamentals, potential for growth, eps, pe,

If not, keep waiting for 200 o, Jesus will probably come earlier

@ KnowAll

You are quite right,  a lot of people are making a kiling on post-po trades and this occurs for very many reasons. here are 2

1. Most public offers are successful, in fact many are oversubscribed. This reflects good sentiment about a company. Hence, one can say that the laws of demand and supply then take full course

2.Many companies tailor their good news around public offers. Access has not paid a dividend for years, suddenly they pay a 40k dividend few weeks before their offer. First bank releases a mouth watering result just days after technical suspension is released.

So there are opportunities which even u can and should take advantage of, However you must realise that not all pos are successful esp in the non-banking sector, this can make the price go lower than po price.
2nd nothing lasts forever, this trend will weaken with time,

@ ALL
I am still trying to get my hands on Japaul Oil prospectus, thats why i havent made any comment about their public offer which commenced today, The news i am getting however suggests that i will really like this po. The company has won a couple of nail-biting contracts from major oil companies.
So anyone who's seen the po, pls make it available

cheers, to making mo money

kingzy:
@Temmie 10
Are u saying that dangote flour is not a wonderful buy?

No i am not saying its not a good buy.
i am saying "all that glitters is not gold".
Lets wait for the prospectus to make an unbiased judgement

1. The company was on technical suspension for the most part of the first quarter of 2007. This was a very bullish period in NSE.
Right now, the company is more or less playing catch up.

2. The company released very good financial results including a decent bonus issue, many investors love bonus and they are gettin in.

3. The purely speculative trend of companies just released from technical suspension appreciating aggressively

4. There is still a rumour that the company will be placed on technical suspension again as they want to go for a public offer soon, so there is talk of a strategic moppin up of the shares as well as investors taking position.

@kingzy
The dangote ipo was supposed to come out earlier but they had some problems with the the SEC (authorities) over the details of their offer, hence the delay
It can be out any moment from now.
i hope you are aware of the details, company is valued at 75BN naira, po price is supposed to be 15 naira per share.

@ whitelexi

You are quite right in many ways.

An ipo is an initial public offering. It means you buy from issuing houses when a stock is listed newly. IN the case of our banks raising new offers recently, what we have is a public offer (not intial) because they are only listing additional shares.

In such a case, public offers are usually at a disount to trading price but you are entitled to all shareholder's rights too.
Of course there are some slight variations, like ppl who bought the latest FBN public offer have not been partakers of the dividends and bonus issues BUT that is only for this financial year ended august. so as from next year all bonuses and dividends will get to them too

If you buy on the floor, there is no discounted price but liquidity is enhanced i.e u can sell the shares at the prevailing price and take out your money whenever you want. IN po's or ipo's, you cannot sell until u recieve your certificate which could take anywhere from 6 months.

If you buy on the floor and are still holding on when the register closes for that company, you will recieve whatever bonuses and dividends too. All are shareholders, whether they bought po or on the floor and all benefit from dividends.

I hope i have answered you


@ Oneshola1
Wetin dey now? this one wey u dey flash dollar abi na naira?
is there something u want to tell us?

@ Shigidi
Naija is an amazing place.
About 40 % of FCMB's shareholders are outside the country.
George Soros, the hedge fund king who literally broke the bank of Englang is also a major shareholder
So firstly, there is a lot of sentiment/expectation on that side.
I bought early this year, made a decent sum but i am out now.
Its not a bad stock but i have not seen anything overly attractive to go in again.

[quote author=ty_ademolu link=topic=31554.msg1376605#msg1376605 date=1186738324]So Right now, I have stocks like crusader, nem, nahco, mbenefit, vitafoam, e.t.c all at very small rates each. I plan on selling all of them just to get access bank in large quantity. please I would like your honest opinion on what to do.

Also would it be wise to buy stocks such as gtb, fcmb now? what about oceanic and afribank?[/quote]You know, i honestly support your idea.
i think thats your best bet, sell all and buy access

Why do i support your plan?
Buying Access will force you to think long term. If you buy Access, for at least 6 to 9 months, i dun think u can touch your money as certificates will be on hold. That will be good for you because you won't be able to change your mind when stocks are not performing at the moment.
You have mbenefit, what price do u think it will trade in the next 6-9months? Don't u think there is a chance mbenefit will rise within that period and you have the advantage of cashing out immediately unlike Access?
But stll u shld buy Access because when you do cash out, you will begin to appreciate having a long term horizon.

While there might be a slight case for buying Oceanic or FCMB, why do you want to buy Afribank at 30 naira (a stock that has jumped almost 200% xtra in the last 3 weeks)? what price will u exit if you buy at 30?

just my 2 cents sha,

K2:
Before anyone responds, I'm well aware that the PO's prospectus says PO buyers wouldn't benefit from bonus/dividend of the current year. However, if investors bought @ N33, supposedly a discount at the time to market price of N40.40, the stock split is finally applied and the same price drops to around the 30s region, where do new investors stand? Haven't they been short changed?

A split of 1 for 6 on FBN should not drop the price to the 30's region.
If the bank gave bonus to po buyers, the value of FBN as a good investment would utterly have been destroyed. There will be too many shares around and inherent value and eps will be grossly reduced.

Fortunately, because the market is full of irrational people, even some rational ppl who havent factored the extra shares, sentiment, year end approaching, I have a feeling this stock will eventually get to close to a pe of 30+ in which case i would not be surprised if the stock price reached a high of 40 even if it eventually subsides

easimoni:
@ Temmie10,

Crusader Ins 3.257B shares , PE = 32
Cornerstone Ins 5.06 B shares, PE = 48

Not so impressive now eh? These are from FSDH, I'll be sure to do my own and let you know if it's different.

And "The Warren Buffet Way" is a GREAT BOOK. Must read. Helped me realize that diversification = mediocrity. I now focus 60-70% my holdings in 2 stocks and the rest in 3-4 additional stocks.

Thanks for checking for me,
when will naija companies realise that bonus and new public offers drain and reduce the value of existing shareholders seriously, as well increases cost of capital significantly?
Seeing that you have read the book, i understand why our analysis sees agreement many times.
If all stockbrokers in naija would just read the book, they will stop punishing the common man by allocating an alphabet soup of every stock on the nse to the average joe with 200k.

@ Frankiriri

you're quite right but the whole issue of PE comes after checking the fundamentals of a stock.
If a stock has got good fundamentals and a low PE, it is almost certainly a good buy

@ Omoba3
Lasaco has not released any financial statement for a while. That makes it very difficult to make a conclusion.
Ideally, the NSE should not allow companies to delay results but then again, this is naija.

@ Yodiyokun
In English:

PE ratio means price to earnings ratio. The lower it is, the safer the stock theoretically.
for instance a PE of 2 for instance (even though this is highly unlikely in any country) indicates that the stock is expected to gow at 50% annually (i.e. 1/2=50%). So if a bank's PE is 9 and other banks are at 30, then it looks like it is a very good buy comparatively.

Stock exchange investing is a career too. It is not just a favourite past time event or bobby or part time thing. Money is involved, a lot. Can i learn how to be an engineer in just one forum? NO, but i can get some useful insights

Investing in the stock exchange succesfully requires hardwork. It requires research and studying. But trust me, the research and the studying will be extremely beneficial to you. You will learn how your mney will begin to work for you and multiply.

For starters, you can try to go thru some websites like investopedia.com, wikipedia for intoduction to stock investing and familiarize ourself with the terms.

If you are really serious, get these 2 books (they are available at any major bookstore):

1. The Warren Buffet Way by Robert Hagstrom (this one is a must read if you want to understand fundamentals )
2. The Intelligent Investor

These books cost very little but can make millions for you.
If you do not consider it worthshile to buy the books at a few dollars/naira, maybe stock investing is not really for you because your brokers will continue to sell you short.

If you take up the challenge, you can be sure, i will support u all the way. There is no substitute for the right knowledge.

@ yodiyokun

Margin of safety is a complex calculation.
But the central idea is to buy a fundamentally good stock at a favourable price to earning, a favourate rate of growth of earnings when compared to the prevailing bond and interest rates of the day and place.

@ slaykay
I would say buy wema from the floor, i am quite sure u can still get it at around 10 in the next few days which looks like a fair price.
I will not advise you to put all your money in po's, liquidity is very important and pos do not povide that i.e. your money is locked in for too long

@ Shigidi
Looks like buying on the floor will be better then. You might want to hedge it tho and do a mixture so you benefit both ways.