A quote from Proshare
"He said that the profit forecasts for the fund showed a higher than average returns of over 25 per cent per annum in the first three years. He said in spite of the 80 per cent profit payout rate of the fund, which was typical of all REIT worldwide, the fund would still deliver high capital growth rate."

http://www.proshareng.com/myproshare/portal_news.php?id=2656

Let me attempt to translate into English The PAT is expected to grow at ~25%p.a. in the 1st 3 yrs. (Not so good). THe REIT will pay 80% of it's profits as a dividend (v. v. good). Buy only if you are not an agressive investor. Ther price should be stable and dividends should be better than the 2% we are seeing in banks. Pass if you think like me

Just an opinion.

EASIMONI,

What the fund managers are saying is that, they won't only give out 80% as dividend but also promise high capital growth rate.
I'm really sure the fund would perform exceptional because skye bank is the king of real estate investment.

slaykay07:

EASIMONI,

What the fund managers are saying is that, they won't only give out 80% as dividend but also promise high capital growth rate.
I'm really sure the fund would perform exceptional because skye bank is the king of real estate investment.

I am sure the skye REIT will perform well.
I just don't see it outperforming the NSE.
Easimoni more or less summed it up.
It is not for those of us who believe that 250% profit is not a sin.

slaykay07:

EASIMONI,

What the fund managers are saying is that, they won't only give out 80% as dividend but also promise high capital growth rate.
I'm really sure the fund would perform exceptional because skye bank is the king of real estate investment.

Okay, but what is the 25% p.a.? If PAT grows at 25% p.a., dividends will grow at 25% p.a. as well. The grammar used in the article is downright confusing. Abi am I dyslexic, or disleksic, or deelexeec?  

Temmie10:

I am sure the skye REIT will perform well.
I just don't see it outperforming the NSE.
Easimoni more or less summed it up.
It is not for those of us who believe that 250% profit is not a sin.

You must be my brother from another mother!

Frankiriri and Easimoni: Thanks for your helpful contributions and replies.

@ easimoni

its very possible esp considering you also support manchester united.
cheers

ouch

@ Easimoni and All

I am uploading 2 reports here. They are research reports done about Cornerstone insurance and Crusader insurance back in April when the market was still bullish.

However the pe ratios, earnings yield, dividend history and the facts still make this companies look like real solid BUYSs.

If this is the case, then Insurance is still the place to be o.

Pleae check it and let me know what you think.

The files are too latge but the link is http://www.meristem.com.ng/detail.php?link=companyanalysis


If the figures are right, then it means as at today, Crusader is trading at a PE of about 9 and cornerstone's is 14.
It looks like a good margin of safety. BUt do help check and tell me what u think

Temmie10:

@ Easimoni and All

I am uploading 2 reports here. They are research reports done about Cornerstone insurance and Crusader insurance back in April when the market was still bullish.

However the pe ratios, earnings yield, dividend history and the facts still make this companies look like real solid BUYSs.

If this is the case, then Insurance is still the place to be o.

Pleae check it and let me know what you think.

The files are too latge but the link is http://www.meristem.com.ng/detail.php?link=companyanalysis


If the figures are right, then it means as at today, Crusader is trading at a PE of about 9 and cornerstone's is 14.
It looks like a good margin of safety. BUt do help check and tell me what u think

How do you determine that a PE is a good margin of safety - any particular method of comparison

@ Temmie10,
The problem is both companies have issued additional shares during a PO. The PEs you are calculating may not yet include additional shares. Will check and get back to you.

EASIMONI, yodiyokun, frankiriri, temmie10 and others

i tasking you to divide twomillion Naira into different stocks and let us see what you would come up with.

my opinion

150,000 units X 3.95 japaul =592,500
35,000 units X 14.9 ACCESS =521,500
35,000 units X 15 Dan flour = 525,000
30,100 units X 11.99 fidelity = 360899 (Secondary market)

easimoni, how can i contact you apart from this forum

slaykay07:

EASIMONI, yodiyokun, frankiriri, temmie10 and others

i tasking you to divide twomillion Naira into different stocks and let us see what you would come up with.

my opinion

150,000 units X 3.95 japaul =592,500
35,000 units X 14.9 ACCESS =521,500
35,000 units X 15 Dan flour = 525,000
30,100 units X 11.99 fidelity = 360899 (Secondary market)

I am not too sure about fidelity. I dun expect the price to go down but the question is "how much upside is there?" except maybe post offer when ts is lifted. The Pe of this stock at 11.99 still looks like it will hit the sky not the roof, Scary, correct me if i am wrong.

1.5 milion in ipos, u'r going safe and long with the public offers lol. Japaul and Access will appreciate. i don't know much about dangote flour, and dangote is more of a reason for the excitement but as we learnt from nascon, buyer beware, we'll see the prospectus sha

Looks like you'll make a lot of money from your list.

I probably am thinkin mo wema than fidelity at this time. Banking stocks respond vigorously to any activity. thats the story of the nse . if wema's result is what they say it is, then it shld rally and with po beckoning, we might be saying 18 in the near future

Crazy as i am, i would restrict the puchases to just 2 stocks.
1.2 million on Japaul, 800 on wema. i am tired of having a cocktail alphabet soup of stocks. if a stock is sure, concentrate and hit it hard, get out take profit, move on. i dun think diversifying peanuts amount to much. If you have 50 million, then there is a very very clear case for diversification. this is just my opinion and i know its against several schools of thought but thats me.

@ Easimoni
thx for the reply. i hope you're right.

Temmie10,

Are u saying buying wema from the floor OR are they coming up with an IPO soon?

I love your opinion, it was clear and precise.

Quote from easimon
Frank, I'm not so sure. GTB's PE is now ~32 following the GDR. With a forecasted PAT growth rate ~45% (from GDR prospectus), you can caculate a forward PE of ~23 (and that's in ~Mar 08 when the FYE 2008 is released). Sure we know GTB is a solid bank but 45% PAT growth is not very inspiring. Might be time for me to sell the one I love! i
The operative words in my comment is ' relative to other banking stocks. Most of them are highly priced. If you sell the GTB where will you put it. Many other stocks have PEs of 40 and above and they dont have the risj profile of GTB. So I cant consider them a better buy than GTB.

@ easimoni, temmie10 will u advise buying japaul from the floor and waiting from the post suspension run, i really dont like going into pos. pls holla as soon as yall can.
thanks

@ 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.

shigidi,

Are u having a laugh, they are offering a huge discount and it's not a bank which means share cert. wouldn't take 6-7 month to come out.

Ask yourself if you buying post the suspension, how long would you hold it for? If It's equal to the estimated time(3months) it will take the share cert. to be released just easily go for the PO.

Only if you need your money for something(profit-taker),  even though it all depends on how long you would be holding it for.

slay kay, ive already bought oceanic, uba and intercontinental with no sign of share certs., the last thing i want to do with the limited capital i have is to lock more money up. i know japaul is good and should be a 10 naira stock . but im not sure how long i would wait to get that far, hence my question. theres nothing worse than locking up capital for so long.

@ slaykay, dunlop is not a bank and many people are still waiting for their certs.

@ 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.

I've noticed that NAHCO shares are on a downward plunge, I've always wanted to invest in that share especially when it was around N36 but my broker advised to wait until the price drops below N20. I never thought the day will come when the price would drop, but i've watched in surprise as it has been dropping all week!
Its the first broker that has actually said something reasonable about shares to me, and i'm pleased with his judgement, but i'm wondering what the guarantee is that it wont continue dropping even after i invest!

Can someone pls explain what is wrong with NAHCO?

Hi guys, anybody heard anything about IBTC? apart from access bank, which other company is on offer. i could see that fidelity, FCMB are not trading, are they on offer too.

Temmie10:

@ 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.

Temmie,
For Gods sake, speak in plain mans lanuguage - I am not an accountant and I am new to this myself - You totally lost me.

How do you determine a fundamentally good stock - I have read a lot of articles on this but I am still yet to find one that  explains the basis of arriving at an opinion on any stock.
everyone just gyrates around ratios --bla bla bla.
I would expect there to be a basis of comparison or a point of reference. If a banks PE is 9 , how does that mean there is a resonable margin of safety.

All the knowldege I have gathered so far is just half baked and there are a lot of loose ends!!

People help me here

@ 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.

temmie10, u really have a way with words. and manchester united does rock

Temmie10:

@ 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 through 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.

Temmie,
Do not assume that I have not read as much as I can in the short time I have started thinking of investing seriously.
But the truth is everything is still theory - I have not read the book syou mentioned though I have read others. The ones I have read point to generally money making mentality not necessary fundamentals like you put it.
So I will get the books as soon as I can - amazon should probably list them.

What I really needed was

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%)."

That statement tied up some loose ends.

One more thing, forums like this constitute a part of research.


Thanks anyway

Temmie10, Frankiriri, Easimoni, Windywendy et al: Do you still think LASACO is a good buy, which it previously was? The price is still dropping and I'm wondering whether there's some info I missed but which everyone else knows.

Please your input is kindly appreciated.

@Iwerebor,
from my uncle who is a finicial junarlist/consultant, first bank is going to send e-certificates.

Temmie10:

@ 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.

A low PE relative to other stocks could also mean that the stock is no good and has to be sold at a give away price for investors to even be tempted. Most times it is only investors gunning for control that buy such stocks. - that is how Aigboje got control of Access Bank and sacked the directors and turned the company around.

@ 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.