@ AQUITA  

  your question indicate your willingness to learn , follow the resources that Easimoni posted. I was like you  a few months back,but i have learned so much ,the knowledge is translating to Cash money and unrealized gains presently. You will have to dedicate time and energy to study hard , you are abou to gain knowledge that will potentially change your life for the better.   However you will get an headstart if you go through this -

Important Ratios -

PRICE/ EARNINGS , PE ratio - PRICE divided by Earnings. This tells you how much you are getting for the price of the share. The lower the better, always compare the ratio with similar firms in the same industry and the industry average.

Earnings Per Share  , EPS - This is the share of the firm-s profit that corresponds to each unit of stock. The share of the cake , assuming the firm declares profit.

Dividend Per Share , DPS-  the share of the declared profit that will be returned to shareholders, because some part will be retained by the firm for future projects.

Dividend Yield - Dividend divided by the SharePrice .This gives the return in % .

There are a lots more ratios that helps in analysis of firms, you can start with these and read further. As little as this is i will tell you honestly this knowledge could be the difference .  In January this year, precisely 24/01 i bought OCEANIC bank based on the knowledge that  a low P/E gives you a good shot at buying the share at reasonable price and i sold it after it had returned 102%. That explains why i am posting this.  i hope you learn as fast as you can, It will make you money ,that is a certainty .if you learn fast and hard ,AND LIMIT YOUR MISTAKES ,and Dont stop learning !And Finally , ALWAYS read this pages !Goodluck

@VIPICO

na wa o , u be insider or you be soothsayer !

Dear all ,

i quite agree with Temmie 10 , i think his view on the insurance industry is spot on. Rather than a problem , the whole recap- wahala is a beautiful

opportunity to enter the insurance market at low prices. It's not a matter of if the plane will take off ,but when.The returns will be HUGE.Remember the

best time to buy is the period of maximum pessimism ,and that is what obtains right now in the sector.Most of the firms are in negative territory today .I

hope it continues so i can take positions with good margin of safety. Like Temmie 10 said, this is where the smart money should be . A few months

down the line you may read this page over again .

@sbm4real

3 months is a short time to make good returns unless you are an experienced TRADER like easimoni. Easi has suggested Crusader ins lately , you

might throw ur question in that direction.I am more into long term investing ,though i take profits when good opportunities show up. As per your

contributing monthly to invest , that is a good way to start.Discipline yourself by reinvesting the proceeds. U would do well in the long term.Also know

that you need to INVEST IN YOURSELF.It is the best way to make money in the long run , learn as fast as you can and READ THIS THREAD OFTEN, that

way you can learn from others.Still learning myself. If you don not learn you will be dependent on the GURUS .Often the Guru will tell you when to buy a

stock , but when to sell is up to you .And know when to sell a stock is very important. Sorry i cant help much ,others will surely give you ideas. Goodluck.


@Frank Iriri ,

your e-ram shall be credited to your CSCS acc in december ,thats when we observe EID-EL-Kabir. In the meantime , more grease to your elbow, sorry ,

your whole body !

@sbm4real ,

before you have answer to your question need to answer some questions. What is your timeframe , i mean ,how long do you intend to invest the 50k

and what is your required rate of return. How much do you want to make at the end of the period . Public offer or secondary market . When you post

your reply there are generous people on this thread and you will have more than one opinion to choose from.

Dear all , got this from proshare.


The bases of allotment for the public offers of both UBA and Oceanic have been made public. Applications for both offers are to be fully absorbed; as both

offers were significantly over subscribed. The issuers, SEC and all parties involved have resolved to dispatch certificates within the next two weeks

@Jehosaphat
   
     i cant tell what the price will be in the future  plus 2009 is sometime away.What i can tell you is this is going to be a winner , in the long term. Think about this , presently Japaul has 183m in Revenue reserve ,that is, undistributed earnings.If the projections are correct and i have no reason to doubt it will be, the Reserve will be 1.2billion by 2009 FY.This will be made posible by a gradual reduction in proposed dividend 37% in 2007,61% in '08,and 48% in 2009FY.Further PAT  is projected to increase from 61% in 2007 to 70% in '09.
 The Cost to Sales ratio is  projected to stabilize at 61% between 2007-09. Bottom Line , with expenses going down and earnings going north ie the operating margins will improve and the increase in reserve will help create more value for shareholders going forward. The share price have only one way to go in the long term , UP.

For the exact price in 2009 , better we consult Bigboylary , remember he has the crystal ball.

@jehosaphat

better late than never, the Japaul PO is still on till the end of the month except if you have used the funds for some other means. I was like you , scowering for info on Japaul , until i got it a few days ago. thanx for taking time to read it. i hope it helps. good luck .

Dear All,

          Evaluation of  Japaul P.O


        Critical Ratios -  the company has been making money but at a declining rate for the past years especially the last two FY .Current year results may however  reverse the trend.The picture is a firm with declining operating margins.The company had liquidity issuees as current liabilities outweighed current assets, hence negative working capital.This simply means the firm could not pay its bills without borrowed funds, this was the trend between 2002-05 FY , however there was a turnaround in the 2006 FY with a positive working capital of 170m. This may be explained by the capital injectionfrom equity capital raised in 2005 when the firm got listed on the NSE.

  Particularly worrisome to me is the huge amount of capital -assets tied down in TRADE DEBTORS/ ACCOUNTS RECEIVABLE, representing  27% of Net Assets in '04, 33% in '05 and 45% in 06% , clearly an uptrend.This limits the use to which these funds may be used to generate value for shareholders.Added  to this concern is the average collection period , a whopping 985 days in FY2006 ! this is a measure of the period it takes the company to get paid for services rendered, the 2005 FY was 847 days.Information is limited which makes comparison difficult , moreso that Japaul is the only listed firm in the sector.

Leverage/Gearing
        considering the liquidity problems the company had its  hardly surprising that the firm had to be financed by debt , 306m for FYE 2006.Interest expense rose by 250% between 05 and 06 FY.The company's leverage  is higher compared to historical figures and represents significant additional
Financial risk to the shareholders , i mean the risk of debt on earnings to shareholders. Lets put this in perspective ,the firm has to pay interest charges to debtors and the government takes it bite with taxes before declaring PAT, hence the more debt the firm takes on as part of its cpital structure the less the Net income available to shareholders. As per taxes, the  firm has a Deferred Tax Liability of 56m from 2006 FY. Liability that needs to be taken care of ,going forward  but not big enough to cause alarm. From the prospectus, the company does not have any Off -Balance Sheet liability.

Having looked at the potential liabilities, there are some good reasons to take up the offer , the firm is in expansion mode, that is , it is growing its business and it has good potentials , it benefits from regulatory advantages from the Local Content Law, its an emerging brand in the oil and gas sector.The expansion is reflected in Net Capital Expenditures which has been growing, Fixed assets grew by 57% between 2006-06 FY,while Return on Assets creased slightly from 16.3% to 18.1% btw 2005-06.Though margins have been declining ,there is still plenty o from for potential growth .With the equity capital being raised through this P.O, the firm should , in my view, reduce its reliance on debt finance thereby reducing the financial risk of shareholders. I anticipate  further capital appreciation over the next 12/15 months, ceteris paribus, all things being equal. Personally , i feel the growth potentials overrides the concerns raised earlier.One needs to remember this are historical figures which indicates trends, more importantly you need to determine if the company can grow and create value for shareholders.As per the offer price , i do not consider the discount , i see the discount as a sales gimmick, the regular Naija factor of whipping up the sgare price before P.Os.The offer price is just about the fair value, the discount should not be a reason to take up the offer.

Management / Corporate Governance / Dividend Policy

The management of the company seems to be very willing to return value to shareholders in form of cash dividends ,as the payout ratio indicates, increasing from 58% to 74% btw 2005-06 FY,despite falling margins.Apparently mgt chose to borrow funds than reduce dividend payout. This good is a good sign moreso considering the naija mentality.
The M.D Paul Jegede owns 24% of the company , the single largest shareholders as no other shareholder has more than 5%.This is booth good and bad. Good because the company's results affects the MD's purse  but it may affect cash dividend / stock dividend decision depending on his personal interest.

Before you take the leap, remember what is good for the goose may not necessarily be good for the gander. For me, I am in on this one but timeframe and investment objectives differ. The projections going forward are achievable but one needs to review one's position periodically. Japaul has good fundamentals .To a large extent ,the decision to buy into the PO depends on your risk profile and timeframe.On this, am going long.You might take a look at the opprtunity cost of taking part in the offer.

In writing this  i have been handicapped by the lack of access to the CASHFLOW STATEMENT , which is very important because it tells nthe story of the sources and uses of CASH by the company.Despite the handicap its worth your money if you have a reasonable timeframe. I hope this helps someone because this thread has help me in more ways than one, it has changed me for the better.

All dem gurus , i hope i have the benefit of your views.

Dear all

any suggestion as to where i can find Japaul Oil financial statements. would appreciate any info because a brother needs it to do some analysis on the company's future profitability.

@ yodiyokun

my guy , the CFA program no be yam o. Very challenging indeed but the relevance of the skills one can acquire is the motivation. small time i go join you in crunching the numbers. keep up the good work.

@Easimoni , shig , fRANK IRIRI ,Temmie 10,yodiyokun and others ,

back after a long lay off trying to learn as fast as i can. U all have been a great source of inspiration and i can only ask you to keep the flag flying.Been off the radar because i realize i need to acquire the skills to make good investing and trading decisions. Until am good enough i remain a student on this site.Well , that explains why i have signed up for the CFA Program. Thanx all, will make meaningful contributions as my knowledge fattens.THANX ALL . iI have invested the last 4 hours of my time catching up on the goings on . cheers to all


Barge

@windywendy,

it sure looks weird for a company to discount its share price that way, but that is the norm in the Nigera stock market. However this should not stop you from taking a position ,like dollyp suggested. Japaul Oil posted very good earnings report lately, and more importantly they can sustain the growth as they maintain and execute the contracts they have now. Personally , i will suggest you determine if the offer is at FAIR VALUE and if you are comfortable with information you find on the company, Then go fo it. I will be adding to my position as soon as the offer takes off.For me its definitely a good one.

Hi,
to answer you questions will need more space and time. My take on this

1. Nigerian economy is still largely cash driven ,where you get you product or service in exchange for your cash.Obvoiusly this does not happen in the case of insurance because the product or service is INTANGIBLE.

2. Most Nigerians have a mentality for leaving things to chance and Destiny.They never take real cognisance of the probability of suffering losses that may be too heavy for their pockets to assume.

3.Finally the public perception that the insurance companies dont settle claims is to a very large extent one of the reasons why insurance is still largely unaccepted by most of the populace.

I hope this helps.

@ iJOGBON
got your mail. Will call you tomorrow.We will take it from there.

@ Easimoni,
good posts !

@Frank ,
   really sad that club members failed to show up. Am a member myself but could not attend because am based in Spain. I expect you to treat this as a hold up on the way to realizing the clubs goal. I will be in Naija in June ,so we can hook up . Am definitely committed to this project .Will call you to see how i can contribute to move this forward .Obviously some are not ready for the the idea , i mean in WORDS AND DEEDS.

    @ Ijogbon,
       i noticed you will be in Naija next month, so will i .You can send me your mailing address so we can have some prelim contact. Cheers !

@ty ademolu,

you would have to do some technical analysis. The goal of TA is to profit from trends when they recur. You need to focus on the stocks price and the daily volumes and note the rate at which volumes reacts to the going price. You can identify a trend by watching these indices . I used this in the case of Fidelity bank and the uptrend has lasted for about 4 months and still going,except for some pauses .However if the trend is very steep, i mean the price is accelerating rapidly, there is most likely going to be a sharp reversal at some point ,moreso if the uptrend is not easily explanable. The longer the trend the stronger it becomes.Your investment or trading goal, timeframe will determine you entry and exit points. I have made the mistake of entring an uptrend at reversal point but my investing goal is fairly long term so i think i will be ok . I must add that trendwatching is not easy but you can sure get better by limiting your mistakes .Thats what i do as a beginner .Goodluck

@ all,especially ijogbon, Dis Guy, Tmoni y los demas ,

Your idea is brilliant and i will suggest you speak with Frank .Am a member of his Betta Club, you guys can discuss merging your ideas . I like your dreams about putting up huge sums to shake up the market.Here we all have a definite purpose, lets take practical steps to actualize these ideas.I will be ready to input my little resources. The journey of a thousand miles starts with the first step.Lets take the first step now.

i have a no of winners at the moment but the best of all considering timeframe and returns is Fidelity. AND am still adding to my position.As per

losers ,Cadbury was a fingerburner,but i cut my losses and RAN. My other loser is Trancorp and perrenial laggard is Dunlop. My idea is to watch my

losers for a period of time and setting a loss limit or non -performance time limit.

@TMONI,
i envy you cos Gtb is a must have in any portfolio.

@ Frank,
i bought mine through my brother in the states.The price is 75dollars. Will call you to see if we could make some arrangement.I will call you before the weekend runs out . You can be sure its worth every cent .Cheers!

@ Frank,
i am sure you will love it. if it doesnt bother you , i would like to speak with you, will give you a call if i can have your details.

@Wendy ,I

you too can have a look at the book , it offers great insights to trading and you will add more to your knowledge. i emailed you,hope you will have time

to check it .

@Frank ,
   Have you read  'Trading For A Living' by Dr Alex Elder . You just wrote one of his many definition of price,that is, price is what the greater fool is willing to pay ! Indeed there is plenty of dumb money in the market, i guess we are here so we will be part of the group with smart money.

@Frank and windy wendy ,

  You both have made good points.Personally am going to buy into the fbn offer ,though i feel there are better options in the secondary market. iWhat do you guys think about Fidelity bank. I have been doing some trend watching and it has been on a steady rise in the last four months except for a few days when it paused,only to pick up again.Also whats your views on Eterna oil offer.

@Frank,
i agree with you on the use of both fundamental and technical analysis, however like Omoba,i find difficult accessing infos to make timely decisions,moreso that am based in spain. Frank, thanks for explaining clearer the situation about margin.I am one of your betta clubbers, it would be nice to have your contact details.

Here is wishing all contributors a fruitful week !

@egoldman,
i should have answered that you can take a loan ,obviously from my earlier post, but you need to know the interest rate and other conditions. My broker told me the interest is 20 something percent ,cant remember exactly.Think it through, because you have to add slippage and commissions to the cost of the loan. You have to be pretty sure about the prospect of the stock.If you got any stock like that , let us in on it . Cheers !

@egoldman
if you dont pay the loan they will issue a margin call especially if the shares you bought with the loan drops beyond a specific price.As regards which stocks will be sold , i dont know how that works but i imagine you can reach some agreement with your brokers before taking the loan. All your broker is interested is in is getting the loan back.

@enurayce,
you would do well to keep your expected return on investment between 30/50%,within a specified time frame,you will need to make some decisions like which stock to choose,the purchase price ,the timeframe before exiting , your expected returns etc I am a beginner myself, but you can educate yourself so you can interprete the financial statements of the companies you want to invest in.You can start by reading THE INTELLIGENT INVESTOR by Benjamin Graham or check this website About dot com. Goodluck!

As regards Dangote flour, i will be digging for infos . Will post anything i find.

Dear all ,

really appreciate all contributions.

@windy wendy,

thanx 4 ur in depth analysis in ur posts. i will like to speak with u.I will be grateful if u can mail me @ baggio1800@yahoo.com

Have a nice week!

@Lagoseko
u are correct that IGI is a solid firm, the options i gave are by no means exclusive .I think the purpose of this forum is 2 share ideas so everyone gets beta. i am not carried away by any hype ,and if i ever do guys like u will help wake me up. more ideas please ! A big shout 2 everyone in da house !

Dear all ,

Warren buffet is without doubt the most successful investor ever.He is the only person in the top5 of the world richest that made his money from the stock market.He is 2nd behind Bill Gates,and worth $52.4billion as at 28march this year.
Having said that, WHAT LESSONS CAN WE LEARN FROM HIM AND HIS METHOD. Personally, i like his idea of buying stocks which he believes,after thorough analysis,are at a DISCOUNT or below their INTRISIC VALUE. For me a practical example is Fidelity Bank share price. Also he likes to buy solid companies with temporary problems.Another example here is Cadbury share price.This however requires PATIENCE for the firm to get out of the woods.We can also learn from guys like Peter Lynch.

Dear all ,

here is a list of the best optins 4 ur money ,

Crusader insurance
Niger insurance
AIICO
Cornerstone.
Personally , i prefer cornerstone because of its growth prospects and the probability of capital appreciation.The company has solid management and has been growing consistently for the past decade.However dont buy at any price.The others are all very solid firms.