₦airaland Forum

MonkeyHunter:
Please try looking at their financials before commoting your eyes. This will help you make a better informed decision on what action to take. I can assure you most of the people that previously commented on First Aluminium have not looked at their recent financials.

How do you know that people did not look at the result?

What is there to see? Attached is the latest financial statement.


http://www.nse.com.ng/Financial_NewsDocs/21594_FIRST_ALUMINIUM_NIGERIA_PLC_FINANCIAL_STATEMENTS_APRIL_2018.pdf

If you look at the 5 year Group result, did you see any consistent GROWTH in Revenue?

The company has NEGATIVE retained earning of about N1.6bn. It will take about 8 years for the retained earnings to turn positive before you can think of earning any dividend based on current run rate.

What are the ratios? Profit margin? From revenue of N10bn you make a profit of N200m! Excellent

Profit for the company dropped from N177m to N42m between 2016 and 2017! Na improvement be that? Ok ooooo.

Mcy56:
Chai!!!
Na the volumes changing hands this morning dey tempt me. Lol. Who knows maybe something is brewing there.

Na only maggot dead body go brew.

That company is returning back to DUST.

DeRuggedProf:
I feel you...
Dead body must shake body and get lifted before e finally rest for ground level 20K..

If you are found carrying dead body, even Naija police go collect money from you. Make she CONTINUE. No be only First Aluminium, she go soon BUy LAST Aluminium

Mcy56:
What is this Firstalum selling self? Anyone knows? The stock dey tempting o.

First Aluminium?

You do need to pay your fees in DOLLARS.

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

It will be interesting to know how of all the companies on NSE, na First Aluminium dey tempt you

Yayira, if you are able to be disciplined and control your emotions, you are on to BIG things on the NSE.

Your last posts were refreshing!

onegentleguy:
C&I LEASING still doing us proud !!
...Now up by over 9% from N2.90 to N3.15 with no no single offer at the moment !!

I fit offer you

Mcy56:
Chai! Make NSE no send people go village finish o.
Just feel for those who have the stocks. Na to stop logging into their trading account sure pass o.

Why? If you invested in unquoted companies, what guides your decision?

So many emotional investors around.

How much has Dangote 'lost' in Dangote Cement He must have gone to his village by now because......................

Funny how people look only at PRICE

aremso:
i think the politicians to might be offloading in order to fund their campaign since there is no access to free money again like before.

Politicians may be disposing off assets for election funding BUT selling at such depressed prices is not to their benefit.

Even in emerging markets where there is no election, outlook is similar!

sellydion:
@Wanaj0, thanks for various analysis. I strongly believe that, what is happening is beyond election. Anyway something must happen before something else happens. My opinion is that it is not a time to stake fund. It is time to watch and allow the market to wiggle down. The way the candles are looking is terrible with bad momentum no slowing down in view yet for NSE.

If you check other emerging markets, you will likely see something similar! Reason why I believe it is NOT about election. Election was known in January when the 'bulls' were raging. Changes between January and now are mainly EXTERNAL.

BullBearMkt:
...I agree with you wanaj0. Many factors affects the market. But in any country, political uncertainties supersede any economic factor. Before investors look at global economy, internal factors especially politics takes the for front temporarily, before people start looking issues outside. A case study is Brexit in 2008 - causing fear, Trumps election in 2016 creating excitement among investors.

But in Nigeria, the investors know that there is no 'issue' with election. The risk in 2018/2109 is much lower than 2014/2015. In 2014/2105 you had a North vs South with associated tensions while 2018/2019 it is likely a North vs North.

Just read a report that the total foreign money in the market is only about $10bn. Our reserve can accommodate that I believe.

BullBearMkt:
WAITING FOR ELECTION TO BUY - Does it worth the waiting?
I have tried to study the NSE ASI price movement just before and after presidential elections in Nigeria and its effect on the market generally. But due to lack of data even from NSE (this is terrible!), I cannot really come to a conclusion.

Available data only covers the last 3 presidential election from 2007.

-2007: Before election, market was bubbling and this is the period NSE witnessed great patronage both from crooks and saints alike. So market continue the euphoria during and after the elections. Good to note is that the incumbent party (PDP) just transfer power to the same party. Similarly, the power to be then nominee won the election. So the atmosphere was good for the market.

-2011: The election took place in April, but before then the world witnessed financial crash and many countries were just getting out of this including Nigeria. However, after the election, since the incumbent party (PDP) won the election, market embrassed the news, rallied for 1 month and immediately the president was sworn-in in May, market started falling till the end of that year...

-2015: From the beginning of the year, market was dipping due to uncertainties surrounding whether there will be election or not until American & British governments shown their anger; that was when Nigerian govt announced that presidential election will take place in March. Market loved the news & immediately a dipping market suddenly changed direction and created a pin-bar. Election came & gone with the incumbent president conceded defeat - market loved this and we witnessed market rally. Before the president was sworn-in, market became jittery and market started another fall till late 2016.

I tried to make any summary out these 3 scenarios but data is too small, however, a common factor are:
-Market rallies in the election month
-Market dips after president sworn-in and lasted for at least throughout that year

With the elections now coming in February, what do we expect

Nice one. However, there are many factors at play so difficult to distinguish the main contributing factors.

For example, the 2015 issue has more to do with the shock in the economy than election fever itself. A situation were oil price crashed and the reserve was falling at an alarming rate. Even if there is no election, the outcome I believe would have been the same.

In 2018, I doubt that election again is the main issue. I think it has more to do with what is going on external to Nigeria. Most emerging markets are either devaluing their currency or watching the markets take a beating. RSA is in recession! Even Asia companies are not left out. Most emerging market funds have lost like 10% in the last 6 months.

The political risks associated with election is understood and most times exaggerated.

Mcy56:
Big boss, he doesn't mean it that way, just commending and appreciating your warnings instead cos it relates more to what that oga mentioned, at least by my understanding of his message.
Sir, you cannot come and go and be keeping quiet and allow some stocks to strike matches and be burning people's hard earned money invested in NSE o. No vex biko.

NSE must collect tuition fee now!

Interesting how the mood has changed between January and now.

swilo:
Interesting... Very true.

This is why Wanaj0 always screams when you ask him about some stocks.

Make una no vex. I will be very quiet henceforth. No more screaming from me.

Godlylifeoneart:
MUST WATCH OUT RED FLAGS FOR INVESTORS.... COPIED FROM A FOREIGN PLATFORM
1. The cult of the celebrity CEO

There’s nothing more appealing than the rags-to-riches story of someone who has come from nothing and risen to the top of the corporate hierarchy. Unfortunately, the hype created around a CEO’s public persona isn’t always matched by reality. A company built around the profile of its leader should be scrutinised.

2. Aggressive expansion (often internationally)

Companies that suddenly go on aggressive offshore expansion drives tend to use a lot of capital to make forays into markets they are often unfamiliar with.

Many South African companies that have recently expanded into unfamiliar territories ranging from the US (Discovery, Old Mutual) to Australia (Woolworths) and Nigeria (Tiger Brands), had to return home with a “bloody nose”, or report struggling numbers following their acquisitions, Artus says.

3. An absence of cash flow

Poor cash flow is one of the biggest signs that all is not well with a company and the way it manages its finances. This is like someone who has a good job, drives a nice car, lives in a great house or apartment but is always broke.

Companies that are perpetually short of cash and fund their day-to-day operations with credit, are often poorly managed. We think of cash flow as the cash from operations less the capital expenditure required to maintain their assets. The inability to actually produce any cash is a red flag.

4. Significant share issuance and growth in debt

Equity capital is valuable because it is scarce. If a business is undervalued, issuing shares is a very expensive way of raising capital. Any share issuance dilutes existing investors into perpetuity.

Rising debt levels are a concern, says Artus. You are taking from the future and spending today. Not only does that leave a hole that one day needs to be filled, but servicing that debt can quickly overwhelm a business. It is important to determine whether the borrowing is warranted. Very often it is not.

5. Overly complex corporate structure

The more convoluted a company’s corporate structure the easier it is to hide financial malfeasance.

Often companies will deliberately make use of complicated cross holdings, shell companies and an array of subsidiaries – frequently in different jurisdictions – to make it difficult to track precisely what they are doing. This is often reflected in overly complex financial reporting, which can also conceal debt levels or artificially inflate earnings.

6. Related-party transactions

Cross shareholdings and active trading in shares between subsidiary companies can result in inflated asset values across related companies. The share prices go up because of the increased buying without any fundamental changes to the underlying businesses. This is something investors need to look out for.

7. Everyone is investing in it

Avoid falling into the dreaded FOMO trap, or “fear of missing out”. Just because everyone else is investing in something, it doesn’t mean you should be doing so as well. We’ve seen the cryptocurrency craze that pushed up the price of Bitcoin to almost $20 ,000 only to see it crash to under $6 000, all in the space of half a year.

This is precisely how bubbles, such as the tech bubble of the late nineties, develop.

8. Be wary of noise created by fear and speculation

Activist short sellers have been a prominent feature in stock markets for many years. It’s easy to get caught up in the hype when their ideas hit the news. But a disciplined investment process, applied consistently over time, helps to overcome the temptation to pile in (or out) based on the headlines.

“Assessing the risk-reward trade-offs and margin of safety is a key consideration of a robust investment process, and even more crucial amid uncertainty and activist short-seller rumours. Make sure you choose a long-term manager whose investment process takes this into account,” says Artus

On point in so many ways

swilo:
For module 1 right?

I have a question... if the face value of the shares does not change with the bonus issue then where is the profit? It looks more like a share reconstruction to me.

There is no 'profit' in bonus and even dividend because the share price are adjusted accordingly. The 'profit' comes due to the movement in share price in response to the declared bonus/dividend.

currentprice:
i tell u. when it is not real, is not going to be real

Are you saying what is happening in AIICO is not REAL?

currentprice:
the reason i suggest the attachment here. i know u going to get tire soon. wait for the weekend proper for many more. infact u will even get request in two week time from pple on break now

Most will not even know what the book is about but will ask because others are asking! It is the HERD mentality!

TradeInvestGal:
But papa wanjoe u were quiet all this while that the shares were rising oo. how come u are now suddenly this verbal?
Well, dont worry I understand. Small small, I dey learn all of una.

What a pity

mendes911:
Chief, are you saying interested parties should wait at 20k junction?

I am wondering why anyone will be interested in a company that cannot account for the 'talent' given it

currentprice:
if only AIICO can be trusted. the latest result gave fairprice of N2.60 the best on nse in term of numbers but bad management

though the result might be window dressing to achieve their objective on the right issue

You sabi well well! Price need to move to justify the N1.20 private placement. I expect the private placement money to vanish same way the PO money vanished crica 2007

Agbalowomeri:
Wetin dey happen to our AIICO revelation

Progressive revelation

Deadlytruth:
From my experience spanning over 15 years on NSE, I have realized that however bearish the general market trend might be, cool money can still be made if one's has eagle eyesight. I recall how Ikeja Hotel rose from 70kobo to above N3.5 (400% gain) amidst the very intense bearishness of August to October 2014 occasioned by 2015 election scare. With the same period PZ first fell from N34 to N17 within 30 days but in another 30 days that followed it was back to N34 again. Many more examples abound.
Just last month amidst this current cry of bear with bear bear Neimeth delivered 100% moving from 39 Kobo to 80kobo.
Wapic insurance fell to as low as 31kobo just two weeks ago but yesterday closed on full bid at 39 Kobo.. ....

Again, there are people that invested in companies that are not 'quoted' so they cannot look at daily price movements. How do such people 'manage' their investments?

It is obvious we have MANY 'emotional investors' who are not meant for the Capital market or any long term investment. I just hope people will not develop high blood pressure with the daily movement in prices.

The dangerous part is those that will have FALSE confidence in their ability to TIME the market. They are usually the ones to pay the HIGHEST tuition fee.

Northeastern:
Outside where? Search for "Warren Buffett with Jay Z 2 from 5 (Warren Buffett)" on YouTube and watch Buffet himself say so. In fact, he said a lot of luck.

When you say there is a strategy, it should always yield the same result, if it does not, then there is an element of chance.

The other thing is selection bias, others would have definitely done more than Buffet at the same time but failed. The world don't get to hear their stories because no one is interested in a failure and a failure won't tell his story because of shame

I got you. He became who he is by just LUCK. Continue.

Agbalowomeri:
Buffet strategy will likely not give the same outcome in NSE; guess that is what he is saying

Maybe BUT to say that Warren Buffet is lucky................................

That alone is a grave offence.

DeRuggedProf:
Wanaj0, what is your opinion?

AIICO does not meet my investment criteria. The corporate governance is WEAK. After the shenanigan that took place at their last capital raising I concluded that they cannot be trusted. The figures is screaming BUY but when I consider other things I will just 'waka' pass!

austinkenneth:
This AIICO thing tire me. Let's all remember that these guys raised N11.9bn in 2007. What have they done with it?

I remember Zenth Bank rights issue taking place around 2007/2008 at N35. UBA did a public offer at N37. Ten years down the line we are not anywhere near breaking even on those losses. Not to talk about Intercontinental, Bank PHB etc Oceanic were the shares wen to ZILCH, ZERO.

Let's not forget Oando.

Now, what happened to all that money (In a supposedly tightly regulated banking industry).

Investors have been had by these shenanigans and they have all gone scot free.

Anybody thinking long term should check out Pa Ewumi calculations around 2009 about the long term returns of First Bank. The calcuations looked wonderful then .......But look at it now, all those returns have been heavily truncated in just the last few years.

Long term is a bad strategy in the NSE.

That's the major issue I have with AIICO. That money they raised in disappeared It could not be traced. I avoid such companies irrespective of what the figures are saying! I don't dine with the devil NOT even with the proverbial long spoon.

Northeastern:
Story story, hindsight bias.

There is no system that works.

When was the fundamentals of FO ever right?

Warren Buffet was only lucky that what he loved doing became a banger.

And the fact that serendipity smiled his way. For example, if Harvard had accepted him, there was no way he would have met Graham at Columbia to learn under his tutelage.

Experience is the best teacher. You'll learn the ropes by doing it.

Please, don't say this outside! Buffet was lucky? Lucky for how many years? when will the luck end You attribute years of implementing a strategy with tremendous result to luck? Ok ooo

rebekah2011:
Insurance companies that will have a lot of holes to cover. You spend 500m to be on the Board and discover you need nothing less than 5billion to turn the company around.

Once you have CONTROL, you can even chop the N5bn turnaround money

At that stage it is all ABOUT control. Ask yourself how the loss making companies are constantly able to pay the executive management Or are they working for FREE

onegentleguy:
...I agree with u.
In principle, there is more to stock market Investment than just Fundamentals.
...even a little more than to Technicals and Market Sentiment at any point in TIME !!

Folks should simply KNOW what they want, and learn to balance 'a bit of everything'.

I pay little emphasis on unaudited half year results.

Whenever a company declare a double digit growth where population and economy is growing in single digits, you need to ask what they are doing to achieve those growths! Companies do 'cook' books especially unaudited accounts. Even audited ones are not foolproof.

rebekah2011:
Which company will 500m get one on their Board? University Press Plc, Cutix. There are not many listed companies that will fit this decision.

N500m will get you 10% of a number of insurance companies to start with! Just take a look at those N0.20 stocks

Again that is IF my objective is to get on the board and do a turnaround.

onegentleguy:
...and less I forget, add that to:

- The near 93% growth in EPS from 14k to 27k over H1 2017/2018.
...the simple interpretation of this is that the company(AIICO) has already made close to 90% of its earnings for 2017 just midway thru 2018 (H1 2018)
- A 50% growth in return per equity stake in the coy (ROE)
- Improved Equity multiplier, debt to equity, combined ratio and ROAA.

Assuming a zero % growth for H2 2018, and using TTM EPS of 31k @ 14%, AIICO should sell for NO less than N2.15

NOTE: NOT A BUY recommendation !!

Numbers don't tell all the story especially when the numbers is based on UNAUDITED accounts. It is not strange for auditors to reverse/reclassify Half year results.

AIICO's problem is more than NUMBERS. Someone on SMN was their CFO at a point.

Chomzy19:
And you think we don't also want to benefit from his rich mind

Oga wanaj0 please I am also interested in this answer.

Ha ha ha ha

My response will NOT help you because

1) You don't know my age and investment horizon
2) You don't know my risk profile
3) You don't know my investment objective


Anyway, with N500m, I will go for a cross deal and acquire 10% of a company and get a place on the board