₦airaland Forum

Justcul:
When we tell people here to buy DangCement.. they wont listen.. Alhaji stocks no dey carry last

longlife20:
http://www.nse.com.ng/Financial_NewsDocs/30973_CADBURY_NIGERIA_PLC.-CADBURY_NIG_PLC._HALF_YEAR_1_UNAU.pdf
http://www.nse.com.ng/Financial_NewsDocs/30971_CHEMICAL_AND_ALLIED_PRODUCTS_PLC-_QUARTER_2_-_FINANCIA.pdf

onegentleguy:
It also Impacts on COST.
Although the border closure mainly impacts Import, Export will also come at a higher cost(COSG) as it means that they'll likely spend a little more pushing for sales.
...the result is a pressure in GROSS MARGIN and eventual decline in NPM.

I do understand the reason for ur question though. ...guess the motive behind it is that FCMGs are infact, suppose to benefit from the border closure.
There are 2 ways to that though;
1) Where their revenue margin(greater sales in view) tilts between exports and local sales.
2) To what extent/degree they rely on import of raw materials.(Import substitution/backward integration in view)

Coys that will be highly favoured by the border closure are those those whose revenue build-up relies far more on local sales than export with point No 1... and those who rely less on import of raw materials for their goods with point No 2.
Where the 2 criterias are met, u should expect nothing short of an acceleration in NPM.(the 1st entails higher gross margin while the 2nd betters EBIT/operating margin)

This is why coys like DANGOTE SUGAR, OKOMU OIL and FMCGs like UACN and FLOURMILL will be better positioned than the likes of UNILEVER, CADBURY and PZ.
The 1st 2(DS and OKOMU are in line for bigger gains)... while UACN and FLOURMILLS are the best placed in FMCGs.

Beyond the matter of border closure, UNILEVER had other issues. ...signs to their worries were there before then.

It is well.

ositadima1:
All the gains in DANGCEMENT is almost gone o. I just tire, whether na to sell or buy more. What kind of market be this na?

onegentleguy:
Frankly, the financial print from Unilever was totally expected !!
...the signs were there from Q3, 2019. I mentioned it here back then.(see post above)
Highlights at the time;

• 1st was the border closure which pressured export.
• Then there was the matter of decreased sales in goods at the back of a competitive enviroment on increased lower price points/alternatives from consumers on the local front.
...the result?
• A huge backlog of non-performing receivables. ...particularly in the food and H&PC segments of business.
• There was need to curb it down to avoid a strain in WC(working capital) that could potentially create a funding mismatch with time.
• Management decided it was best to cut off all their distributor lines and engage the service of a sole distributor to exclusively market their product.
...this though, would come at a cost.

The challenge...
That decision to disengage all distributor line came in Q3, 2019 and was due to kick-start in Q4.
Fast-forward to the covid-19 era and u do not need a soothsayer to tell u that their distribution chain would likely be stiffled as the pandemic brought about severe supply disruptions.
...now for a company that was already going through a phase of lower demand(decreased sales), it was only going to be a matter of time before the strain from both the supply-demand side of the curve results in a loss in market share.
This is why u see decelerating gross margin amid a continuously pressured(lower) inventory turnover.(the last 3 quarters in view)

My view...
I think it would've been better to go the PZ route of allowing for a slightly added duration in repayment plan or put a modality in place to improve on receivables, instead of cutting off all distribution lines.(well, no one saw covid-19 coming)

Coys in the FMCGs are well positioned to benefit from the curent worries(most are anti-fragile) but Unilever already had an issue before now !!
...as a result, they were'n't able to tap into the benefit from the corona-induced environment.

The FPs of PZ, UACN and FLOURMILLS will likely witness an improvement from previous quarter.(slight for PZ though)
PZ was also struggling before now but there next financials should come in better than previous print.

I highlighted some of these worries in Unilever here back then. ...though I also mentioned that those keying in should do so for trading and nothing more.
At the time, TA signalled a buy @ N10+... before it rose to over N16 then. refer to link; https://www.nairaland.com/1131485/nigerian-stock-exchange-market-pick/5592#88765140

Selah

Mpeace:
Uniliver PLC declaring serious loss in there just released result tells a lot about what to expect from many companies on NSE. I would have mentioned one of such companies but I know many of us here are in it so I would therefore avoid unnecessary argument and rather wait for the result.

talk2me2:
The problem is not about Dr.Awo's post. Infact I really appreciate his effort takes his time to do those research/analysis and posting them here.

The problem really is that the stock market (especially in an economy like that of nigeria under the current leadership where the currency is devalued at random) on the average does not favour long term investors except of course one controlling intrest (enough intrest to be called to the board of the company).

If the data of a very good company like Zenith bank can be like that in the long term, how about the nse average or the poorly performing companies?

talk2me2:
exactly
I believe in taking your profit when you see it

sincerelymine:
How do you know if your stock is over-valued? When it gives over 100% capital appreciation?

CashDiMkpa:
That's why holding any stock for ever mindlessly does not make sense. Once the market prices your stock higher than your valuation, why hold on to it? You can sell and buy back later.

Imagine those that sold Zenith at close to N40/share in early 2018 and buying back now. Compare them to those taking N2.50k profit every year since then. Who is better off?

DrAwo:
Growing the Dangote Cement way...
#ConsistentGrowth...

Mcy56:
Japaulians E Ku market o.

Someone was told to buy Zee here, hope you know what you're buying into, it's very important.
You can be picking at strategic junctions if you have spare funds, if you don't just exercise patience.
.......next junction should be 15.25......if it keeps digging lower....

GonFreecss1:
You have said it all perfectly sir.

In Nigeria you can’t only be looking at Financial statements. Studying the economics of it all, is a must.

RabbiDoracle:
There are lots of underpriced opportunities on NSE.

Anyway NSE is moving at a slow pace along side the our economy unlike those in EU and US that are skyrocketing and causing a sharp disconnect between the real economy and the stock market. This is could cause a bubble in the developed markets.

The bull on NSE seems to have an underlining health conditions.

Doc Ukay, come and diagnose o.

seyisanya:
I bought UCAP at N2.50 end of last month. I'll buy more if it drops further(No thanks to COVID). As a long term investor, the moment you notice the numbers don't make sense anymore, you simply sell and seek other available opportunities.

One should not be emotionally attached to any stock.

RabbiDoracle:
NSE seems disconnect from the global markets that has been bullish since April 2020. The reasons I do not know.

Some are making ATH right now.

DexterousOne:
I'm thinking same.


UCAP for me is a buy and hold

seyisanya:
Since you already missed their year-lows, I think they're still good at current prices. However, you may wait and see how the market will respond to their Q2 financial reports then you decide afterwards.

Kindly note that no one can accurately time the market and my suggestion has nothing to do with market-timing. It's just that we're already in the earnings season which might(or might not) create entry opportunities due to the ongoing situation.

megawealth01:
I bought @km15+... We are patiently WAITING

seyisanya:
Oga Loco, I envy this your newly found love(TA). You're doing well, sir.

locodemy:
Buru oche nuba mmaya oku.

Ewooo.......see veecovee for my back.

Runs away

locodemy:
Go back and tell her it's 50 50.

Mkpu NSE nwekwara Ike ita the money completely.

zimams:
Na wa o!
Disappointed not to see WAPCO on this list... after I've relentlessly loaded it at N10+.

BullBearMkt:
FOLLOW WHERE THE MONEY GOES
9 Nigerian Stocks are on the list of the international investors - These are:

1. NESTLE
2. DANGCEM
3. GTB
4. MTNN
5. ZENITH
6. NB
7. STANBIC
8. SEPLAT
9. BUACEMENT

When the market is ripe (good market sentiment), it's good to follow where money goes. I intend to analyse all the 9 before market opens on Monday. Here is the analysis of the first on the list - NESTLE

https://www.youtube.com/watch?v=u_zY7ywJ1pE

Individual due diligence is encouraged

PLAN YOUR TRADES AND TRADE YOUR PLANS

Penboy:
I know someone who bought 3000 dollars worth years back .. Ecobank (ETI) .
He checked last year only for him to weep!

Men, constant checking is important o.

emmanuelewumi:
How can you buy and leave a stock for 5 years without monitoring its performance.


It doesn't have to be a full time job to do this effectively

DrAwo:
5 year summary of Guinness Nigeria results...
#Depressing...

onegentleguy:
I have since given my views on DANGOTE CEMENT.
...Pls kindly follow up with the post and article above.
Worthy of note is that a few of the points(on pricing) highlighted in the article has already played out. ...while some others are yet to play out.

Regards

emmanuelewumi:
Only God can decide that and you need to monitor the growth and profitability of the business.

I am bullish about Dangote cement, Nestle at a good entry price, let us hope that MTN will continue to grow and remain profitable, when investments come into the country and the market becomes bullish United Capital should continue to grow as the only Investment banking firm on NSE.
Zenith bank, GTB and UBA should continue to deliver in the banking sector.

We are only guessing.

RabbiDoracle:
So you don't even know what you posted until another member(Dr Awo) corrected you.

Na wah o. See how you wrote it authoritatively

DrAwo:
Just for the record, production cuts aren't this deep.

"As a result of the output cut, Nigeria will now be producing 1.412 million barrels per day, 1.495 million barrels per day, and 1.579 million barrels per day respectively for the corresponding periods in the agreement; as against the 1.829 million barrels per day of dry crude oil that was the reference production in October 2018."
https://nairametrics.com/2020/04/10/opec-deal-nigeria-to-cut-oil-output-by-22-to-1-4mbpd/