onegentleguy:


You are doing well Pa. Ema,
...nice inputs!

But let me add that your estimate for ROIC should actually be more and here's why;
The denominator of the formula for calculating a coys TIC (total invested capital) should be made to discount the non-operating asset from her funding/capital structure... particularly the cash component not required for the day to day running of the business.

Put differently, TIC shouldn't just be equal to EBV/shareholders equity + FD/total debt (as you rightly mentioned) but also EXCLUDE non operating asset.
ROIC will then be equal to NOPAT/(shareholders fund + total debt) -- non operating cash asset.

By raking-off the non-operating cash asset component, the denominator (same as TIC) will be less, hence implying higher ROIC.
This same principle is applicable when estimating the CROIC (FCF/TIC)

The logical reason for discounting the non-operating cash asset is because C&CE (cash in hand and in short term securities) which are deemed part of a company's overall investable capital includes funds/cash that were left unused or not utilized.
Simply put, it is to ensure that the value of your TIC does not include cash not used during the business period.

To this end, non-operating cash asset/C&CE must exclude working cash which is an operating asset. ...only cash not needed by the business within the period under consideration is considered a non-operating cash asset. (ref: excess cash)
...only that should be deducted when calculating for the TIC

There are several ways to extrapolate for the non-operating cash asset both from a coys SPL and her BS.

If you apply this, then LARFAGE WAPCO'S ROIC, CROIC and ROCE will even be higher than your previous estimate.
Interestingly, it also has a more improved CBR and a better relative growth in CCC/CGPR, U/LFCFS... and now an extremely low EFIR ahead of it's peers. (P2P CA in view)

As you rightly alluded, the company has the least cost worry after broadly deleveraging her books to free up WC needs and effectively ensure higher earnings delivery.

Using a blend of appropriate valuation model that assumes a sub-optimal YoY GM (ref: 5% QoQ to YE or 10% in H2, 2024) after knocking off a RP equivalent to surrounding risk level, LARFAGE WAPCO'S Intrinsic value/FVE prints @ N58.2
...this value, which is extremely conservative, is an over 57% discount from yesterday's closing price.

I had since given it a *** rating.

Rating: Outperform!

CAVEAT: NOT to be inferred as any sought of investment guide. ...the need for due diligence should still take higher precedence ahead of this post.

Regards

I don't use cash. For my Invested capital I use the shareholders fund, short term, long term loans and leases.

I am a lazy investor, so I prefer the short cut and no loooong thing

KarlTom:
Units of OandO or Naira?

Hahahaha. If I tell you, I might lose it.

" O Dodo.... E don do now.... make we breathe small capitals ni

emmanuelewumi:


I don't use cash. For my Invested capital I use the shareholders fund, short term, long term loans and leases.

I am a lazy investor, so I prefer the short cut and no loooong thing

Then you probably didn't understand my post. (you may wish to read through it again)

Your initial formula which failed to exclude the non-operating cash component of TIC is essentially doing the very opposite of what you stated in that part in bold.
Not using cash or not incorporating the cash component is when you deduct the non-operating cash asset, especially the cash not utilized during the business period from the formula for total invested capital. ...doing otherwise implies you have factored in unused cash in estimating TIC, which invariably reduces ROIC.

This is the fact! Unless you're looking to work with a less than normal/conservative TIC figure.
Same methodology should also be applied when calculating your CROIC, EVA (economic value added) and other TIC-based valuation drivers.

But of course it's fine if that's how you've chosen to run your estimate.
Regards

Mfunkynation:
" O Dodo.... E don do now....
make we breathe small capitals ni

Where dat guy dat say da tin go turn today?

Casting Casting Casting oando
My betnaija stock likely to do its last Casting tomorrow. I hope it creates opportunity for my third batch of accumulation which target was #30. The decision to buy hold or sell is your business

Mfunkynation:
" O Dodo.... E don do now....
make we breathe small capitals ni

Na so.
If you haven't sold by now, I believe there is no need to sell again. If it drops below your cost price, top up. There is nothing unusual in what is happening.

Raider76:


Where dat guy dat say da tin go turn today?

...

Streetinvestor2:
Casting Casting Casting oando
My betnaija stock likely to do its last Casting tomorrow. I hope it creates opportunity for my third batch of accumulation which target was #30. The decision to buy hold or sell is your business

onegentleguy:


Then you probably didn't understand my post. (you may wish to read through it again)

Your initial formula which failed to exclude the non-operating cash component of TIC is essentially doing the very opposite of what you stated in that part in bold.
Not using cash or not incorporating the cash component is when you deduct the non-operating cash asset, which is cash not utilized during the business period from the formula for total invested capital. ...doing otherwise implies you have factored in unused cash in estimating TIC... which invariably reduces ROIC.
...this is the fact! Unless you're looking to work with a less than normal/conservative TIC figure.

Same methodology should also be applied when calculating your CROIC, EVA (economic value added) and other TIC-based valuation drivers.

But of course it's fine if that's how you chose to run your estimate.
Regards

Short term and long term debts are interest bearing loans and are used.


The other formula whereby non interesting bearing current liabilities are removed from the total asset and non operating cash or excess cashi usually give a very high ROIC and CROIC.

I used it in the past but not again.


How do I estimate my operational cash, I use 5% of the revenue generated by the business. Any cash that is more than 5% of the revenue, I term it as excess cash or non operational.


The summation of the equity , short term debt, long term debts and lease is easier, less complicated and more conservative for me

I recommend this book. It will expand your investment knowledge and wisdom

Hello @Bagwa

You seem to have taken a 'break' since Monday.

Trust you're good...

Raider76:

Where dat guy dat say da tin go turn today?

You mean "Oando Up Up" 😅😅

Omooloriredade:
What was all that hullabaloo over Oando about?
A stock delivered almost 400% in about 5wks and retracement led some to lose their cool?

Can someone point to a stock on the NSE that has delivered the way Oando has in 5wks? Take a look at the TA na. Daily max gain for more than a week. Profit taking should be expected along the way. It's just the way the market works. The market will now determine a fair value based on news released so far until next news/announcement is released. If it's positive, expect the market to reward the SP. If negative, expect the opposite. C'est normal.

Can I just ask that we show some respect to other forum members? Social/forum etiquette is important. Please let's show some maturity in our posting. Allow others share their views and once you have made your point, there is no need to troll the forum.

In my opinion, Oando will .........

Let me stop there. I need to be sober.

Disclaimer - I didn't suggest any trading or investment strategy, if it appears I did you probably misunderstood my point.

I wonder how people worry and disturb themselves unnecessarily about Oando's price.
For those who may want to make some good cash from Oando in the short term, they may feel worried about the recent fall in price. But I have said it severally that Oando is a huge money spinner for those who are playing for the long-term. Such people should not be bothered with this momentary loss in price. In fact, I would be happy if the price falls to below N20 or even around N10 in the next few days or weeks (short term) so that I can load more and more units.
My focus is when Oando releases their 2024 full year results and 2025 half year results. That is when the prospects would begin to manifest clearly.
Any price movement before then cannot worry or move me, except to use it as opportunity to buy more units.
My target is to wait patiently and eat the fattest meat in the long term, and not to be running around chasing bones in the short term.
Guys are lurking around to make billions!

emmanuelewumi:


Short term and long term debts are interest bearing loans and are used.

The other formula whereby non interesting bearing current liabilities are removed from the total asset and non operating cash or excess cashi usually give a very high ROIC and CROIC.

I used it in the past but not again.

How do I estimate my operational cash, I use 5% of the revenue generated by the business. Any cash that is more than 5% of the revenue, I term it as excess cash or non operational.

The summation of the equity , short term debt, long term debts and lease is easier, less complicated and more conservative for me

You probably didn't read my initial post to the end.
What you stated in the part in italics is EXACTLY what I meant when I said; "there are several ways to extrapolate for the non-operating cash asset both from a coys SPL and her BS." (refer to my initial revert again)
...there are also a few other techniques on this.

When you use the fixed % revenue or even WC derivation to estimate the working cash and in turn extrapolate the non-operating cash component, your ROIC won't be that high as alluded.
The goal is to ensure you have a better picture of the coys TIC and a more precise estimate for ROIC.

In any case, I see you're comfortable with what you have. ....whatever works for you bro!

Selah

emmanuelewumi:
I recommend this book. It will expand your investment knowledge and wisdom

Can it be sent to my email
I’ll love to read
Thank you sir

KarlTom:
Hello @Bagwa
You seem to have taken a 'break' since Monday.
Trust you're good...

Why won't he take break?
He should stay so they can be pouring insult on him?
Some people are just so immature and aren't ready for what investment is all about.
See some crying over pullback in OANDO, maybe they forgot that quite some people picked it much lower......and possibly waiting to top up or re-enter after selling with profit.
Kids everywhere you go on Nsempa, not even about years of investing for some.

Yet to read their hate posts on RT that's been firing on since below N1....@1.83 today.....the day that one decides to take a break, you'll see them crying upandan the thread.

ihedioramma:
Is there any thing present ? ONE LOVE .

Which year is this? Are you an acheologist?😁

ihedioramma:
LOCODEMY HOW MARKET?

Ihedi, long time no see. Good to always hear from the veteran of this forum. ONE LOVE.

Painting everywhere red

Mfunkynation:

You mean "Oando Up Up" 😅😅

yMcy56:

Why won't he take break?
He should stay so they can be pouring insult on him?
Some people are just so immature and aren't ready for what investment is all about.
See some crying over pullback in OANDO, maybe they forgot that quite some people picked it much lower......and possibly waiting to top up or re-enter after selling with profit.
Kids everywhere you go on Nsempa, not even about years of investing for some.

Yet to read their hate posts on RT that's been firing on since below N1....@1.83 today.....the day that one decides to take a break, you'll see them crying upandan the thread.

No mind them. I don't know what is so special in Oando going down or being on offer, after all, it was on bid for weeks too. Meanwhile, be on the look out for anyday or time the offer start to dry, there is money to be made there if one is lucky to pick before the offer dry up.

KarlTom:
Hello @Bagwa

You seem to have taken a 'break' since Monday.

Trust you're good...

Last time I saw him was when Oando was on full bid and he was looking for someone with 10k to 20k units to sell, probably for a client. Perhaps he has now gotten it cheaper.

I also skip the cash part and just focus on the shareholders' equity, debt, and leases. It's simpler and works well enough for me.

God we dey your hand oh.Speaking from two side of your mouth. It is now normal for my betnaija stock to cast.I thought it was my doings that was making it cast.

OANDO don cast
To buy, hold or sell is your decision after your DD. I am not here to baby feed anyone or post what you like or not.Stock market is a serious business and not betnaija..lol

ALOBAM:
I also skip the cash part and just focus on the shareholders' equity, debt, and leases. It's simpler and works well enough for me.

I only remove non operating cash when using Enterprise Value.

emmanuelewumi:
I recommend this book. It will expand your investment knowledge and wisdom

Any idea how to get hard copy

Streetinvestor2:
Any idea how to get hard copy

No.


You can get soft copies online

emmanuelewumi:



No.


You can get soft copies online

Pls link to get it online

mikeapollo:


I wonder how people worry and disturb themselves unnecessarily about Oando's price.
For those who may want to make some good cash from Oando in the short term, they may feel worried about the recent fall in price. But I have said it severally that Oando is a huge money spinner for those who are playing for the long-term. Such people should not be bothered with this momentary loss in price. In fact, I would be happy if the price falls to below N20 or even around N10 in the next few days or weeks (short term) so that I can load more and more units.
My focus is when Oando releases their 2024 full year results and 2025 half year results. That is when the prospects would begin to manifest clearly.
Any price movement before then cannot worry or move me, except to use it as opportunity to buy more units.
My target is to wait patiently and eat the fattest meat in the long term, and not to be running around chasing bones in the short term.
Guys are lurking around to make billions!

N10 bawo

SonofElElyonRet:

N10 bawo

Lol! Anything is possible. Don't be surprised if you see the Ondo's price going down towards N10. There are people that would want that to happen so they can buy more, and I am one of them.
What matters now is individual preferences and focus. Short term gains/gamble; or long term massive profits?

The industry/sector that Oando belongs to is the money-spinning one, if one allows his/her investment to mature.

[quote author=ndept post=131499781]Only If you can get it at less than N2. Then you will have to be the patience type. In the next 6 months, I believe the result of their right issue of N20b may start to reflect on their financial statement. I see Japaul share price making a capital appreciation of 80% over the next one year. Think Japaul, think Multiverse![/qyuote]


Thanks...
I have convinced myself to enter