emmanuelewumi:
A lot of analysis going on here about Flour Mills of Nigeria. The most important thing in this game is to know what you have bought and why you bought .

Flour Mills of Nigeria had consistently paid dividends in the last 20 years, I stand to be corrected. This is a company that reduced her debt by over N40 billion in 6 months of the current financial year.

The last quarter result, and the audited full year result will surprise the pessimists.


I remember some months back, Oracle was surprised that I was still in FBN and equally accumulating more shares of the company forgetting that we are all in this game for different reasons. That was at a time when FBN was still between N3.00 and less than N4.00

We still remember vividly how some of us were hyping the bear and predicting further doom for market because of what happened to the Dow. Everyone of us is the MD/CEO of our portfolios and does not need the pity or encouragement of anyone on how the portfolio is fairing.

I don't do monkey hunting, neither do I talk down any stock so that the price can fall and then buy the stock at my preferred price.

@ Toluway, there is life outside the stock market and do be too emotional about what people say or think about your portfolio. You only need to do your homework and ask questions before venturing into any stock.

We are all making more money this year, know your stock, understand your stock behaviour, know why are in a stock, master your emotion, have different sources of income apart from the stock market, then every other analysis or talk in the market will be nothing but noise.


,.......,......................................................................

If we can get this book, please do get it and read.

"Ordinary people extra ordinary wealth" by Ric Delman.

"Truth about money" by Ric Delman.




Wishing everyone a great weekend.

...Yet another very fine post from someone who is pursuing perfection in the act of understanding the dynamic nature of the Nigerian Stock Exchange.
A big Kudos to u Pa Emma. ...U my dear are a person too many !!
Indeed on the 1st part in bold, am sure some folks are not seen this. ...they are a bit concerned about their debt burden, but aren't seen their strength and consistency on deleverage servicing.
...and the 2nd part in bold cannot be over-emphasized, especially that of mastering ones emotions.
like I always say; If and when u fail to create a workable plan for urself, the market will create one for u. ...and often times they just might not be good ones.

RabbiDoracle:


From Q3 2017,

Free Cash Flow (FCF) = EBIT (1 - tax rate) + depreciation & amortization - capital expenses - changes in working capital.

EBIT= N19.5b
D & A= N12
Changes in WC= N15.4
Capital expenses= ~9.9
Effective tax rate= 32%



Use the Q3 of FMN to do this and tell me what you get.

It may change at year end to be positive.

This is not the first time they will be having a negative cash flow.
This is Nigeria and I can bet it FMN will pay cash dividend.

RabbiDoracle:


Holding small units which I can sell off depending on the market sentiments. Some herds no dey look notes to financials. They just look at P & L account. Get carried away by PAT. If they bidding it recklessly, I hand over to them

If it falls to N22, I still buy more and wait for the ultimate gain.

OK thanks

Agbalowomeri:
Pluto is secretly buying an illiquid stock
Not knowing we have dumped on him

No matter what you say I no go mention the name of the stock until I am done buying.
If the big monies in NSEMPA should visit the stock, na to cause katakata be that

emmanuelewumi:
Those in Flour Mills of Nigeria, should know why they are in the company.

The company will come out with the 2nd and final tranche of their fund raising exercise via right offer between November 2018 and January 2019.

The right will be between the ratio 1 for 4 and 1 for 5, for a price of N40 to N50. The amount to be raised is N40 billion. The information can be found in their shelf program.

This is very true. ...but if the clear expectation of a great improvement in WC and a robust BS is met, the company might decide to shelve this in the near term. There i also an option on the table to raise the next trench of fund via a select 2 core FPI.
...I can say here that management is also thinking in that regard, but I'll stop there for now.

In all the share price is currently not where its suppose to be, and will move up sooner rather than later.
...this is where Onegentleguy is interested in. ...for he tries his little best to follow the money, and have since invited those who likes to do same to join him.
...While we await Mr TIME to do his thing.

NOTE: Onegentleguy might also be engrossed in some wild imagination. ...so this should not be seen as an investment advise.
DD always advised pls.

shigidi:


Pricing. They probably feel they are selling themselves short at 27 naira.

...U have a very good foresight my dear !!
There was just an urgent need to deleverage their balance sheet, especially those with a high accrued interest.
Mr TIME will make things a lot more clearer for some folks. ...only problem is that the said clarity might come at a time when it could be 'extremely difficult for them to Flour their Mill'.

onegentleguy:


This is very true. ...but if the clear expectation of a great improvement in WC and a robust BS is met, the company might decide to shelve this in the near term. There i also an option on the table to raise the next trench of fund via a select 2 core FPI.
...I can say here that management is also thinking in that regard, but I'll stop there for now.

In all the share price is currently not where its suppose to be, and will move up sooner rather than later.
...this is where Onegentleguy is interested in. ...for he tries his little best to follow the money, and have since invited those who likes to do same to join him.
...While we await Mr TIME to do his thing.

NOTE: Onegentleguy might also be engrossed in some wild imagination. ...so this should not be seen as investment advise.
DD always advised pls.

The option of inviting 2 foreign investors can't work. Shareholders won't approve that, they can either do a right issue, public offer or a combination of right offer and public offer.

RabbiDoracle:


FMN will not pay dividends in their year ending this 2018. The cashflow is negative and they are needing capital. Paying will mean borrowing from the bank just to satisfy shareholders.

This may depress share price in a short term.

Larfage did rights issue, has negative everything, are planning ti issue bonds etc yet they have announced a closed period and board meeting to consider result and dividend.
Guiness did rights issue in july 2017 and by sept 2017 they paid dividends.

pluto09:


No matter what you say I no go mention the name of the stock until I am done buying.
If the big monies in NSEMPA should visit the stock, na to cause katakata be that

Keep buying, I keep dumping

Agbalowomeri:


Keep buying, I keep dumping

No wahala

Agbalowomeri:


My exit recommendation for fidelity was 2.50 (from 1.3/1.5). I have never being a fan of the stock and have never bought a single unit.

No be u na dey talk say the bull will continue to run and will not stop (not even say to drink water) until Diamond reach km4, transcorp km7
Or you think say Diamond will reach km4 before Fidelity

wanaj0:


Actually one will be worse off by converting useless stocks into LONG TERM portfolio. It is like keeping a corpse in the house waiting for it to come alive! Once you realise the mistake (not out of emotions), just get out and put your money in fundamentally sound stocks.

A lot of people buy out of hype or sentiments. They don't even understand how the company they are buying their stocks create value. Emotional investing is nothing but gambling.

We are currently FAR from a market crash. Oil price is robust enough. The PE's of most stocks is still less than 10. The economy is recovering with growth expected in 2018. The election risk is overrated.

Flee the market if oil price drops below the budget benchmark and 'pipeline engineers' in the ND start to tamper with the oil pipelines.

Very correct on the bolded. Some of such fundamentally defective stocks might be so beyond salvage that they eventually get delisted and the long term philosophy fails in the end and leaves the long termer in final loss. Examples are Costain and others currently under delisting process like DEAP, Evans Medicals, etc., hence for me the uncertainty which defines the Nigerian investment environment is not worth the pain of excessive long terming and does not really guarantee eventual victory in the end.
Whenever I realize that I have fallen into a troubled company which may not survive the trouble, I just cut my losses and move on but may return to it if and when it begins to show signs of genuine and sustainable recovery in order to resume from where I stopped with it.

pluto09:


No be u na dey talk say the bull will continue to run and will not stop (not even say to drink water) until Diamond reach km4, transcorp km7
Or you think say Diamond will reach km4 before Fidelity

I have always rated Diamond more than Fidelity (gut) and diamond will still surpass 5 if this bull continues on the long run;
I don't have anything to do with transcorp; don't join me with loco/Peterichy

fxuser:


Let looks at it again for d sake of newbies

Fidelity (example)

If Avg holding cost above N4 , the position will be down about -20% (ooouch)

What shud such a person (or newbie) do ?

a - avg down ?
b - reduce position ?
c - cut losses ?
d - or do nothing ?

1st i'd like to say that there is absolutely no such thing as a 'definite formulae' especially in this clime.
...for one might go for one option and in no time, Mr MARKET might decide to tour a different path and vise versa.
I think its a thing of knowing what best strategy to implore within the limits of what works for u. ...and going ahead to stick religiously to it.

However, on a personal note I always go for;
option A, if the said coy is fundamentally sound and my loss position is greater than 25% but not more than 50%.
option B, if the said coy is fundamentally sound and my loss position is less than 20% on average entry.
option C, if the said coy is fundamentally not so sound and my loss position is more than 10%.
and option D if the said coy is fundamentally very healthy with a clear prospect to better their health (ie DF, DS and CAVERTON).

In all, I think the KEY lies in having a workable plan that gives u more and takes away less, and then sticking judiciously to it.

pluto09:



No wahala

Na joke o before you say na me dump illiquid babe on you.
I don't do illiquid babes
I like them large and succulent

emmanuelewumi:



The company would have raised N80 billion in the current right offer, rather than raising the fund in 2 tranches.
I guess the majority shareholder is trying to prevent a takeover of their company.

I learnt the 3 majority shareholders of UACN who now have a combined 22% of the company came in through the right offer.

This recent rights offer?

Deadlytruth:


Very correct on the bolded. Some of such fundamentally defective stocks might be so beyond salvage that they eventually get delisted and the long term philosophy fails in the end and leaves the long termer in final loss. Examples are Costain and others currently under delisting process like DEAP, Evans Medicals, etc., hence for me the uncertainty which defines the Nigerian investment environment is not worth the pain of excessive long terming and does not really guarantee eventual victory in the end..
Whenever I realize that I have fallen into a troubled company which may not survive the trouble, I just cut my losses and move on but may return to it if and when it begins to show signs of genuine and sustainable recovery in order to resume from where I stopped with it.

Both the Trader/speculator, short/medium term and Long term investor can often times reap a good measure from their investment as long as they have a workable plan that they adhere strictly to.
The problem is that some folks relate and interpret long term investment to buying a stock and then going to sleep.
...Just because a coy is healthy today does not necessary mean that it will continue to be healthy tomorrow. ...for even humans fall sick every now and then.
I think a proper understanding of a long term investment entails buying into a fundamentally sound coy at a good discount margin from their intrinsic value and always following up with a keen eye on it. ...that way, u would know when ur coy falls sick, and then take the necessary immediate action.
This is why the likes of Pa Emma have tended to succeed as a long term investor. ...that's also why folks like Sir KOD, WANAJO and BIGJAY have also done very well in this regard.

Agbalowomeri:


Na joke o before you say na me dump illiquid babe on you.
I don't do illiquid babes
I like them large and succulent

Lol
You don't need to tell me that you like them large, why do people think you dey follow yariya up and dawn

RabbiDoracle:


There is always a first time. They can do it.

Even if they pay,.it will be so meaningless. Maybe 5 to 10 kobo.

They need to save up more.

I think there was a year Flour Mills made a loss. Doubt they paid any dividend that year. They had foreign currency denominated loan. Devaluation made them to incur losses due to foreign exchange translations.

Valuation of bluechip stocks is hardly based on dividend yield. Growth rate matters more than dividend yield. It is not also a good stock for traders.

rebekah2011:
I do not agree with this. What some people have seen in UCAP this year is not meant for everyone. UCAP has subsidiaries that returned very well last year. 2017 was bullish for United Capital Securities Ltd and United Capital Asset Management Ltd. United Capital Trustees Limited is handling the Etisalat wahala. More income from that angle too. In 2015, the subsidiaries contributed dividend in the sum of N1.9b, It increased last year to N3b. This year will be more. The only draw back I can see that will stop them from paying higher dividend in the excess tax on dividend that may increase if they choose to pay more than the N3b they paid last year.

I am heavy here. But like it is with everyone, I am the MD/CEO of my portfolio. Results will show on Friday.

Thanks. I am not sure what you disagree with though. In terms of disclosure, my average holding cost for UCAP is 77kobo. It constitute almost 10% of my portfolio. Mind you I don't like Tony Elumelu's companies!

That said, when I am doing my valuation, I always discount extra ordinary income because such is not sustainable. Same applies to Dangote Flour. You need to discount the profit from the sales of their noodles section.,

OBAGADAFFI:
https://nairametrics.com/japaul-maritime-services-signs-350-million-financing-agreement-milost-global/?utm_source=ReviveOldPost&utm_medium=social&utm_campaign=ReviveOldPost

These kain news have started trooping in to trap some other people. Long thing

wanaj0:


Thanks. I am not sure what you disagree with though. In terms of disclosure, my average holding cost for UCAP is 77kobo. It constitute almost 10% of my portfolio. Mind you I don't like Tony Elumelu's companies!

That said, when I am doing my valuation, I always discount extra ordinary income because such is not sustainable. Same applies to Dangote Flour. You need to discount the profit from the sales of their noodles section.,

Unless you are calculating pre UBA-spin off prices
As at today, no stock will give the dividend yield that UCAP and Afriprud will give

Agbalowomeri:


Unless you are calculating pre UBA-spin off prices
As at today, no stock will give the dividend yield that UCAP and Afriprud will give

never say never. Eterna will surely beat them.

Onuokwu:


This recent rights offer?

Now u are begining to ask the requisite shrewd questions. ...U did think in line with what one could term a lead up to the answer in one of ur post recently. ...maybe u could try digging it up my oga.
I hope for ur sake, u join ' the United Army of Complete Nollywood'. ...try to buy the dip and then wait on Mr TIME to do his thing.
...'for there can be no better time to be a Nollywood star than now'.
However, its always a matter of choice.

NOTE: Onegentleguy has never been an actor himself. ...he is only been a Nollywood star albeit in a figurative way.
This should'nt translate to mean an investment advise. DD always advised pls.

Agbalowomeri:


These kain news have started trooping in to trap some other people. Long thing

Even if JAPAUL acquires CBN, without the COMPLETE REMOVAL of the entire management, it remains a SINK HOLE.
As long as that boy JEGEDE is there, nothing positive will EVER come out of this JANET...

Why the guy no come do offer again.....

IchimokuPilot:


Even if JAPAUL acquires CBN, without the COMPLETE REMOVAL of the entire management, it remains a SINK HOLE.
As long as that boy JEGEDE is there, nothing positive will EVER come out of this JANET...

Goodbye Chioma

Yea, you are right. At the end of each week I always check to see what I have achieved within the week and when I see -4% of portfolio, I feel that I 'm in the wrong profession. Buy on the good days when I see +20% I feel like I am the only wise person on earth and others are in the wrong profession

Toluway:

You're not the only one . Me too. But authoritatively speaking, this is the nature of this business. There must be fluctuations. Are you a newbie? You must be strong, patient and mature in the game. 2weeks is nothing. 2 months at times self. You don't need to care. Stick to your potfolio please
.

Mpeace:
never say never. Eterna will surely beat them.

Eterna have been making above N1 eps over two financial years and still haven't paid 50kobo. will it suddenly double it dividend this year? Not possible

Zhirinovsky:
Yea, you are right. At the end of each week I always check to see what I have achieved within the week and when I see -4% of portfolio, I feel that I 'm in the wrong profession. Buy on the good days when I see +20% I feel like I am the only wise person on earth and others are in the wrong profession

Bros don't approach the stock market like that o otherwise you go wound. Give yourself 6monthly review unless you have mastered the TA acts. Even the TA experts cannot be doing weekly review to assess gain/loss

Zhirinovsky:
Yea, you are right. At the end of each week I always check to see what I have achieved within the week and when I see -4% of portfolio, I feel that I 'm in the wrong profession. Buy on the good days when I see +20% I feel like I am the only wise person on earth and others are in the wrong profession

But 20% weekly is not realistic. We are talking of a thousand percent increase in a year.

Since the bear started, I have kept my money in DS and havent made any reasonable return for two weeks which is okay by me. At least, if im not gaining, I'm not losing.

wanaj0:


I think there was a year Flour Mills made a loss. Doubt they paid any dividend that year. They had foreign currency denominated loan. Devaluation made them to incur losses due to foreign exchange translations.

Valuation of bluechip stocks is hardly based on dividend yield. Growth rate matters more than dividend yield. It is not also a good stock for traders.

That was the year they made billions in foreign exchange loss and you wrote their management off. I remember only Bigjay01 had the guts to buy the stock at ₦12 then and it later moved aboved ₦80.