₦airaland Forum

OBAGADAFFI:
For those buying First Aluminum

https://nairametrics.com/first-aluminium-delisting/

Are you asking us to accumulate??

onegentleguy:
On the bolded, am SURE u actually meant to type from negative to POSITIVE.
...'cause that's currently the TRUE picture of WEMAs RETAINED EARNINGS.

That said, I agree with u that investment decisions should be a matter of choice. ...and those choice should be hinged on one's PERSONALITY, STRATEGY and INVESTMENT HORIZON.

Thanks. It was meant to be from NEGATIVE to POSITIVE

If only people understand the item in RED

swilo:
Thanks a lot but there was a good correlation and differentiation. The part that got me thinking is when I divide the profit by the number of outstanding shares. It messed up the maths.

How? That should be your Earnings Per Share

swilo:
My eyes were just opened to some ratios. It is amazing the way a newbie can be easily deceived.

Assignment for all newbies:

Go an do the basic maths of calculating how much profit each company on NSE makes from a revenue of 1 billion.

You will quickly see why some companies are preferred over others, you will know why some kobokobo banks are actually more expensive in the long run.

Those are EFFICIENCY ratios. Nothing to do with how expensive the company is. Different ratios for different things.

Mcy56:
With the delay in Fidelity result, it was believed that it would be worst but the opposite was the case.
That's one of the reasons why investment is risky in itself cos despite those fears, some people were still buying then.
....but I guess they were forced to push out their report cos of the skye saga.

How many months delay compared to SKYE?

There are many reasons why audited results can be delayed. It is not only because the result is BAD. Auditors give priorities to companies based on audit fees and the controls you have in place.

If Fidelity full year result is LATE then something definitely is wrong with their systems/controls which is a RED flag.

OBAGADAFFI:
I don't agree with the bold.

The only reason stanbic is selling @44 is simply because the biggest investors are not offloading.

AND why do you think the biggest investors are not offloading? Why are those BIG investors not in Wema, Japaul, Skye and co?

veecovee:
Waooooooow!!! This is the kind of argument we need here.

Where are you wanajo and currenprice

Come defend your FA and TA!!!

Defend? Really

I only explained to currentprice the 'abracadabra' that made their retained earnings to move 'suddenly' from positive to negative.

Wema does not meet my investment criteria and it is a PERSONAL thing. Same way NOSPETCO and co never entered my consideration. I don't comment on the possibility or otherwise of people making money!

Life is all about choices. We don't all have to make the same choices. And note, any choice you make, you are RIGHT.

currentprice:
wema fairprice not attractive at my side with the current 38.5B share outstanding. though they have positive retain earnings compare to their huge negative retain earnings this time last year

That's because of accounting abracadabra. They created a capital reduction account and set their negative retained earnings against it.

http://www.wemabank.com/wema-bank-gets-shareholder-approval-capital-reorganisation/

hyness:
But oga, is a relevant regulatory body not suppose to call into question the corporate governance of a publicly quoted company that continue to report decline or abysmal financial state of its affairs including huge debts, eg Japaul, Oando, investigate, and if found wanting take actions by either suspending its board, CEOs, or better still, trading of the shares in the floor pending improvement in the state of that company's affairs? to protect potential investors from buying even though they too need to be cautious too.
Is that not part of its function as a regulatory body eg SEC?

It depends on what they are regulating.

CBN is there to ensure that depositors money are safe. They are not looking after interests of shareholders

SEC regulates capital market operators. SEC will not stop you from investing in any company that you like. They however ensure that the companies have full disclosure and appropriate fines accordingly.

It is the shareholders that should ensure good performance of the companies they invest in! Shareholders are the cause of the problem partly because they do not see themselves as 'owners' of the company. Owners should not behave like some shareholders are doing.

Regulators don't determine which shares we buy!

dipoolowoo:
Why I will join others to blame the CBN, NSE and SEC is because as regulators, they are supposed to make sure the companies are fair in their dealings. They are not called regulators to only collect fines and others, but for checks and balances to boost investors' confidence.

What do you expect the regulators to do?

CB regulate the banks and made a promise that depositors will NOT lose their money. CBN did not promise the shareholders anything.

NSE is a market where you come and sell. CAVEAT Emptor applies.

SEC fines companies that did not make returns on time.

People that bought SKYE on Friday knew that

1) SKYE was sick
2) SKYE has not released result for many quarters

The shareholders of SKYE attends the AGM and shower praise on the board and management.

The shareholders have members represented on the audit committee so they have 'insight' into the accounts.

The shareholders are aware that they can lose money in their investment.

Actually it is the shareholders that need to be more responsive and active. They should stop going to AGM just to get AGM gifts. They need to hold the their directors accountable.

BUT if you are a 'trader', it is just a trade that went BAD.

If there is any lesson, I think people need to come up with their criteria for buying a stock.

Krisuba:
Wicked souls. So if I package saw dust as detergents with the knowledge of NAFDAC and sell it to the citizens. U will say y citizens buy instead of blaming the authorized watchdogs??

Na wa ooo.

Even when CBN/SEC were crying about NOSPETCO, people were still investing in that 'oil company'. When it collapsed they blame CBN, SEC banks etc! Noone accepted responsibility for investing in a pyramid scheme

Godlylifeoneart:
I will like to share my experience in economic recession with you all.
In 2008,i invested part of my first salary(110000) in ecobank transnational incorporation Public offer in $. Then it was N50, 000 at N111. 00/$ totalling $450 and got 1500 units of the moribund Eti shares.
I equally invested my 2nd month salary of N50, 000 naira in the shares of the defunct intercontinental bank that was politically and religiously ruined by the greediness of Erasmus akingbola, i equally opened a Dom account, Coz I had a dream of working abroad. Thereafter, I saved 50,000@$ monthly I. e Average of 400$ monthly in my Dom account.
Fast and forward the American recession came ad a result of easy credit facility n access granted to the American.
The 1st financial calamity by 2012/13was the so called ETI the stock was no longer being traded at $ price.
The 2nd was the demise of international Bank after the take over by political back up access bank, the 7500 units was valued at 250 units I. e 30 to 1
My Savings grace was the $ savings I built up in my first Dom account at m$ at ximum value of 138\$ and was able to build up 20,000 before I left for UK in 2012
Now,the worth of intercontinental bank N50,000 is less than N2000, at today value of access bank of 250 units while the N50, 000 of ETI worth less than 25,000 today.
The moral of the story., my $ investment which I invested less than N2. 7M now worth over N7M.
I am not taking the warning on the next depression lightly, no one knows what will happen to the naira +or- bubu, cos for any human being to grow Nigeria economy, the naira must be devalued or floated, any attempt to practice the present Buharinomics economy might not be good for Nigeria economy. Pls n pls convert your gains n profits into $\€/£ before the expected recession happens.
Message, i am trying to pass to you is that we should all embrace investment diversity.

Good point BUT..........

Some people bought GTB and even in dollar terms they are still better off.

Important things is to buy into a GROWING company that is properly managed!

Agbalowomeri:
Provided your FA figures are reliable
What proportion of quoted companies go all out to deceive with cooked up figures?

FA also look at facts behind the figures.

Without seeing the results of betnaija I could see that they are doing well.

Godlylifeoneart:
I disagree with you, what was announced was ill heath. Coz I could only see sky bank in a state of status epilepticus. Today the bank daily price chart rises, tomorrow its down, and dz was not unique to only skybank. Most of the quoted companies on NSE exhibit dz features. Hence there was no announcement, only suspiciousness by financial brilliant people. As at the time of last CBN intervention in 2015/16 the political exposed regulator was assuring investors that all banks in Nigeria are saved n healthy.

Price rising got nothing to do with the health of the company.

As at the time when Onwuka Interbiz was DEAD, teh shares were still traded on the NSE. Remember 'Caveat Emptor' when buying any stock.

Godlylifeoneart:
FYI, good corporate governance does not exist in Nigeria. What exist is selfish interest. How on earth could Lame NSE the political susceptible CBN and THE HANDICAP SEC woke up one day and announced the burial of sky bank with no prior announcement of its obituary?
A good investor with a good lawyer will make fortune from this useless regulatory agencies that only serve the interest of the oligarchy.
All the high volume of sky traded on NSE in the last one month was dumped by the Oligarchs n Nigeria aristocrats. Now the minority shareholders suffer the consequence. Some pension funds are lost 4ever,JIJO are trapped

Obituary was announced when SKYE started depending on CBN to meet its obligation to depositors.

Any pension fund that invested in SKYE and trapped till now should be liquidated. Before PENCOM does not even allow them to invest in companies that are not paying dividend! How much more one without result.

Olohunjedalo:
What’s the fate of Skye bank share holders now please

CBN now owns Polaris Bank. SKYE bank is DEAD so the shareholders are left with dead body!

Mpeace:
Ayeni took 70billion from skye. But he had a total of 150billion from the banking industry. Most of this was spent in power sector investments eg Ibadan and yola discos
https://www.thecable.ng/httpswww-thecable-ngexclusive-tunde-ayeni-wrecked-skye-bank-management-writes-osinbajo/amp

Ibadan disco collected money from government (CBN) for power and diverted it.

http://nerc.gov.ng/index.php/media-library/press-releases/568-nerc-suspends-board-of-directors-of-ibadan-disco

A lot of panic reactions.

Stock market investment all over the world carry some risks. Knowing how to manage risks is key to successful investing.

People blame regulators BUT what do they want regulators to do? We should not blame regulators for the consequence of our GREED. Regulators cannot tell us what to buy and not to buy. Even when regulators issue warnings, we rationalise and ignore the warnings

There is no 'certainty' in stock market investment. However, there are obvious RED FLAGS that should be considered. Unfortunately, people close their eyes to the RED FLAGS because of the 'profit' they are making.

aremso:
So is bad to say it as it is?

Discouragement should not be done hastily.

Mcy56:
Those behind wrecking Skye bank are those in power. Power play and politics at its peak here. I read somewhere some few days ago that those owing the bank are too big for the bank to recover their funds from.....
We continue to watch the drama series as it unfolds.....

Well, it gain 4% today. Will be good to see what the charts are saying so as to plan the trades for Monday. NSE should not suspend trading on the shares yet ooo

Mcy56:
Sir, you were right.........but why dont they publicize the financial reports first before taking over? Why is the news coming in on Friday evening?
CBN's hands were not clean in all these.

You want CBN to perform a miracle Skye died before CBN intervention.

Mcy56:
Okay. I came to check how many people are making jest already after reading the news but seems none yet.
Nigeria's dirty politics is at play again.
Why not saying the bank did well, I however strongly believed that something is not right somewhere.
The question is : why are they retaining the management for good performance as things turned south for the bank?

What gave you that impression? You done see result?

Once CBN takes over a bank, the bank is as good as dead. Once AMCON takes over, na burial ceremony next!

Agbalowomeri:
Na 6kobo o before dem mislead u enter bush

Why are you hastily trying to discourage people

DeRuggedProf:
Too bad!
One trading rule everyone MUST imbibe is to avoid completely any stock that keeps its quarterly and annual results!
No matter how tempted, walk away.
On NSE, a one night stand almost always end up producing a baby mama.
If you expect a baby, why take a woman without a womb to bed?
I was severally burnt almost beyond recognition doing that.
Fidelity was not a bad buy below N1.59, but I consistently avoided JIJO after I felt their Q2 was delayed unduly and will stay away until they release that result.
I prefer to JIJO on a VERY bad result than NO RESULT.
When you keep your result, I keep my cash.

Does not apply to gamblers!

Well, shsreholders of Skyebank will be left with nothing! Hmmmm.

veecovee:
... good to overlook noise here sometimes and follow your heart

Exactly. Same way you should ignore when people start to laugh at your losses or gains

DeRuggedProf:
I decided early in my investment life NEVER to romance anyone ( I am transgender.. ) that when the odds take an audit of my clandestine activities, I can not marry...
Now that great companies are priced like crayfish, how on earth will I even bother about pricing rotten fish..
Negative retained earnings is like terminal illness on NSE. Even the healthy ones (with cooked numbers) can drop dead any day..
If anyone wants us to do contribution, let it be outside the trading floor, and let us sign terms of agreement, I CANT add my bid!

The more reason why I asked what is the attraction? Would like to understand the screening criteria that will make First Aluminium even appear on the list considering the opportunities on the NSE.

Anyway, discouragement is illegal. We all must become Barnabas (son of encouragement)

Mcy56:
I think it's not right to easily name-call anyone trying to give information on any stock, especially when it's been fundamentally backed up, when there's no fact or figure to counter it.
Everyone should do his/her DD thereafter I believe. Let's not be hasty to discourage anyone.
A student's opinion anyway.

Apologies for hastily discouraging you.

I now humbly hastily encourage you to BUY First Aluminium.

Thanks.

MonkeyHunter:
Comments made on First Aluminium

"Dead body must shake body and get lifted before e finally rest for ground level 20K"

"Can't remember the last time that company declared profit or pay dividend. They are an Aluminium company that is completely left behind!"

"She may just be waking up from sleep. That's the only thing that came to my mind when I saw her post. But still, people make money from dead companies, she might succeed."

"Na only maggot dead body go brew. That company is returning back to DUST."

The above comments are not justified and can't have been made by someone that looked at the financials.

1)The company is not dead.
2)It is not loss making.
3)It is not over priced.
4)20k (Market Cap of N420m) will be a gift to whoever buys it given the profitability (N210m) and shareholder's funds (over 5bn).

Am I advising people to buy? No.
Is the group result of more relevance to shareholders than company results? In my opinion, Yes
Has group profitability iimproved ver the the past four years? Yes from N29m to N209m
Are the profitability margins poor? Yes and that has been reflected in the price. The company is however making sales of over N9bn annually and if the margins improve the profitability shoots up.
Is this an attractive take over candidate? Yes

A 'good' company BUT

1) Not paid dividend in years
2) Profitability dropped in its 'core business' (Company result)
3) Negative retained earnings will take 8 years to turn positive at current 'run rate'.
4) POOR margins

Candidate for take over? YES.

I can only recommend such companies for an Undertaker like Jimoh Ibrahim. Jimoh Ibrahim love such companies because they are good for asset stripping. He will help hasten their death.

onegentleguy:
Great.
...But we both know that Nos when properly interpreted are a GREAT INVESTMENT GUIDE to better decision making.
This is where I have my inclination. ...this is KEY.
To all the questions u raised, that's why I referenced that quote and also a part of the reason I said I do have some reservations about the company.

NOTE: I do NOT own a share in First Aluminium. ...but am open to the possibility of keying in in future.

Regards.

I do own First Aluminium when they were 'profitable' and sold leaving a little so as to continue to 'check' what is happening. Nothing has changed in that sector. Competition is stiff. ALSCON is still moribund. First Aluminium is struggling!

So what are the number's sayings?

MonkeyHunter:
I am not a monkey hunter o!

I am THE monkey hunter.

I however didn't preach First Aluminium o! I only asked that she should rely on her interpretation of company's financials in judging the prospects of the company instead of relying on opinion of gurus especially when the gurus have not looked at the financials but are anchored to a preconceived notion of the company and its prospects.

So many FALSE assumptions! Nothing in the numbers is an indication of a healthy company!

The prospect of the company is evident in the market place.

onegentleguy:
Just stating the OBVIOUS my dear.
...NOs don't LIE !! They SHOULD BE UR GUIDE.
ALWAYS BEST to BUY what u are presently seeing and NOT what u believe or think u had, or might see.

Like I always tell folks:

"With the stock market, the PAST should be seen as a GUIDE, the PRESENT as 'a COMPANION' while the FUTURE should be viewed as 'a SUSPECT'."
~Sinclair

Numbers don't tell the whole story!

What do you use to gauge the future? A company whose profit dropped from N177m to N42m??

What is the future of Aluminium industry in Nigeria? What are the key risks? How is First Aluminium managing those risks? What competitive advantage does First Aluminium has? Who are the competitors? Do they have a monopoly? Can they control the price? Many questions that the so called numbers don't speak to!