koksieboy:

easimoni, wanajo, temmie, frankiriri, shigidi et al,

I've learnt how to calculate the PE, EPS and some other values. However, how do I translate them into valuable information for making good investment decisions? for instance, the average market PE is 24, does it mean any company with a projected PE of less than 24 is a good investment?

I have about N1.2m to invest within a week,

I intend to have 2 seperate "portfolios",

1. for aggressive trading, willing to take risk for maximum returns in the shortest possible time
2. for long-term investment

what would your recommendation be, divided into the 2 seperate "portfolios"?

Thanks.

Shigidi is spot on
a pe of less than 24 may suggest but[b] does not necessarily [/b] imply a cheap stock.
the keyword is the rate at which a company can increase earnings growth.

For instance, I would be happy to buy a certain stock at a PE of less than 20 if it grows PAT at 50% annually.
many companies in naija have seemingly grown PAT at more than 50%, the problem is that they have also issued more shares through through ipos. pos, right issues, gdr etc. Issuing new shares dilutes the eps calculation and almost always reduces eps making the company even more overvalued at least in short term.

Another thing is that industries differ. Some industries attract higher average pe's than others maybe because of profit margin. the banking industry has a higher pe than most, i am not sure how justified the current pe's of 30 are though.

Insurance also has relatively very high pe ratios, this is because a lot of people believe that the industry has immense earnings power, this is probably true to an extent. But too many insurance companies have problems with their capital structures, having too many shares, plus NDIC/CBN/NAICOM or whoever is yet to release money raised during consolidation/capitalization to insurance companies so we can conclude that there is still potential for earnings growth.

Finally as Frankiriri reminded sometime ago, some pe's are low because a company is dying,
A dying company is not a cheap company

EMMAACHILE:

This is a recommendation from PHB ASSET MANAGEMENT WEEKLY REPORT

Click here
http://www.wikifortio.com/656893/PHB+Asset+Mgt+Weekly+Report+Aug+17%2C+2007.pdf

AND attached is yesterdays report in excel format

Emmaachile

thanks for the info, pls post more

The problem with Lasaco is that a lot of analyst are forgetting that the company had a public offer last year. they should have between 6 billion and 7.4 billion shares by my own calculations.

hence phb releases a pe of 3.72, fsdh also comes up with a pe of 6,
Funny enough if a lot of pple follow this wrong figures, the stock may well rise.
Even without the distortion though, lasaco is comparatively undervalued slightly, slightly sha o

@ Easi

Japaul looks like a very diff piece of cake with all these shell contracts and favourable govt laws
Those guys might tripple profit easier than we think o, and their full year result was released on friday, eps is 30k
Waiting on their prospectus though

alliednetw:


Please!!!
Any information on Sterling bank?Heard today that their long overdue results are hitting the market in the next few weeks(2005/2006,2006/2007).A bonus and dividend is rumoured to come with the 06/07 result.Has anyone heard this??

where did you hear this?,

their overdue results were released a few weeks back, at least up to the 9 months result ending june 2007 (http://allafrica.com/stories/200708070012.html).
i would expect the final year results sometime after september, anything above 3 billion PAT should cause a price rally especially with a po beckoning before the end of the year.

Bonus is slightly possible but i'd say a good dividend is more like it, (around25k), they have to do something in any case lol

so my fren, abeg share where u get your info, make we reposition o

easimoni:

Temmie, I'm not so sold on C&I. Yes the 6 mon PAT was up 200+% over last yr but did you factor in the PO from June 06. They've been alloted 71.5% of the 1.4B shares they offered (1B) and that takes total outstanding to 1.6B. I don't know when those shares will be listed but that may be why the market has failed to respond to the result. If you double the 6 month result, the stock is selling at a forward PE of 25. A good growth stock, no doubt, but it'll require some patience I think.

thats why your presence on this forum is very much needed,
we need checks and balances man before person go jump for bridge ,
Thanks, last week i asked my broker to get crusader/c&i leasing, fortunatley crusader was the one he was able to get

cutebabe:

Guguru's in the house I have 300k to invest which company can I buy (Not banking sector please), I am looking at 12-24 months time span.

Thanks y'all
ANY TAKERS

Just by looking at the diff posts in the past 3 days, there are enuf answers on the 2 nse forum (stocks that can make you rich + stock market tips for nigerians) in nairaland, thats y i dint repond.
rezigirl asked a very similar question too this morning,

so, what time frame are you looking at?

in any case i am still sticking to my guns on crusader, c&i leasing, wema(its a bank but no be money u wan make? ), u'd have to get them cheap tho,
there's a few other interesting ones too but it depends on you, for instance would u like to buy a po like japaul or dangote?

it all depends on what you want from your investment,

@ boy steve
Sounds like you need to get yousrself a stockbroker. they make trading much easier and you don't have to worry too much about who you are buying from.

@steeviee
You might have a point about unity bank.
The bank's fundamentals are poor though.
i do not see unity falling too much but it'd definitely be quite risky as u are not investing based on results or anything grounded.

On a bright note, there are a lot of speculative buys on unity and that might just continue, they may even be taken over or merge.
Btw i noticed you are not saying anythin about your first inland, its 10.79 today moving northwards at 5%

boy steve:

Uncle Temmie, nice job u are doing here and i must tell you we will all invite you one day for get 2gether, i don't really contribute much but i read a lot,

I have 3100thousand unit of ecobank and like 3900unit of zenithbank also, i am looking at selling my bonus of the eco bank and i would have sell the zenith bank before they drop but i am waiting for there bonus, the main koko is i am trying to put some money together right now and it will be like 800k.i want to invest in short term stock ,i want to buy and sell every 3months ,i want to sell after 1 or2naira increase , what is your advise, i am patiently waiting,

i am not uncle o lol, Temmie's fine,
i think your bonus for zenith has already registered so even if u sell now, u will still get the bonus so u can go ahead and sell if u want. the bonus will be credited to your cscs account in due time.

I can deduce from your question that you are like an aggressive, want-to-make-as-much-as-possible investor. I am like that too!
However, the strategy of selling every 3 months is possible but very delicate and does not bring usually bring the best returns not least because of transaction fees. i prefer to go for big winners. How would u feel if bought wema at 3 naira in feb/march and sold at 4 naira in march/april earlier this year only to find that in 5 months leading to august the price moved from 4 naira to 12 naira? thats more than 1 naira every month.

regular trading works but the decisions to buy and sell have to be very well informed,
In any case, savy investing is about learning everyday. if every 3 months, my stocks gained 50%, i would probably consider selling too, problem is the market's timetable is different and determined by many other factors,

hope this helps

REZIGIRL:

Hi Temmie,

To be sincere I'm actually looking at the next 6months and for returns I'll say as much as I can get.

How are u doing today?

Its a beautiful new week, so i guess i am doing fine, thank you,
6 months is not the easiest to pinpoint because a lot can happen.

I am going with wema, c&i leasing, crusader, evans med. Some of the stocks like evans med do not have the best fundamentals but as at last friday's closing prices, all of them are all still in my view trading at around 40% to potential prices,
Seeing you are in for short term, my advise is, u dun have to wait for 6 months, markets are not rational, when the prices hits the 30-40% profit range, cash out and move on. if u are wandering whether to cash out at any point in the future, send me an email as u have my email address.

The price you buy is also very important, make sure your broker buys them relatively cheap or close to friday's closing price since that is my basis for this analysis, give your broker a price limit. if you buy evans med at 8 naira, u might have to wait longer than 6 months o.

The point is that you should buy these stocks very close to their closing prices on friday to stay at a safe margin. I have not included any ipo because that will take longer than 6 months to realise your gains.

p.s. this analysis is purely based on my own research so apply some caution. but if u do go ahead and make money like i expect, i dey here o

REZIGIRL:

Hello,

Please to all the gurus in this house, can u please advise on some good stock I can invest in right now? Got about 200k to invest but need to knw which to go for.

Temmie, Easimoni and others, expecting to see your advice. Thanx guys.

Keep on with this good work.

what is your time frame? 3 months, 6months, 1-2 yrs?
what kind of returns are you looking for?, 20%, 50% or much more?
time, expected returns and level of risk are all related

if u'd just js wait a bit, the prospectus for the 2 will be out shortly, then only can informed advise be given. anything apart from this can at best be speculative

dodochi42:

All the Gurus,Please what can i do with 50,000 naira
Do i buy IBTC ethical funds or buy some IPOs?, please i need your advice

it depends on you yourself.
what is your risk profile?
what kind of returns do you want? decent, big, huge, very huge,
note that the higher the risk, the higher the returns,
how long do u want your money to be tied down for?
are we talking about money you might need in case of an emergency?

personally i would never put my money in ibtc funds but i could encourage someone with very little financial knowledge to start with ibtc.

otokx:

@Temmie10

who is your stock broker?

i use cashcraft, i am not recommending them tho. my acct officer is a good fren, thats y i get decent service.

the point is that the policy is mo risky than it sounds, and my guess it that mr president does not want to turn turn naija into a melting pot.

Policies alone avail very little, it is how they are managed afterwards and there is very little guarantee that this is a good idea in the long run esp as inflation is already being defeated under status quo

kpineo:


@Temmie10
what ideas do you have for me in the short term. (am thinking insurance stocks possibly)

@kpineo

short term on insurance for me if there are no strange/unexpected results coming through goes thus:

6-7 months time frame so you're looking at around march but ready to get out when the price appreciates to around the target

Crusader is at least a 6.5 stock, and Mutual Benefits is at least a fiver, and believe me when i say these are conservative predictions.

i conclude on these based on fundamentals, expected earnings, eps, generous dividends, senior mgmt ambitions and some some speculative factors like market sentiment, market share, comparative profits etc.

Remember to bring my bottle of wine when u cash out o, come march, u might even wanna hold them well cos by then, future might even look greener then

i have answered that afribank question before, it has its own thread, u cld try searching, i am not sure u want to touch it,
i would rather touch access even with all its eccentricities than go near afribank po at 25.

I am sure soludo had good reasons for proposing redenomination but there are some very real fears about the govt's ability to control inflation if redenomination is proceeded with.
How will employers, traders and home owners be compelled to keep numbers in check along with the new policy. Its easier in some countries than others. In a place like malaysia, the govt can order sellers, home owners, traders not to increase prices but not in naija. Everybody wants to make extra profit.
Interests rates are comparatively high in naija.
a redomination that brings naira at any close par to the dollar could lure banks into "carry trade", hedge funds and all will be waiting to milk the country dry

My bottom line is a lot of caution is needed over this move.

Gtansi:

i hv been enjoying this site, but i want to ask. please how can i buy stock when i reside in Sokoto

I am not sure if there are any stockbrokers in sokoto.
However, here's my 2 cents: i live in uk and i still trade the nse very actively.
All it takes is one trip to abuja, kano or lagos to fill the appropriate forms and meet your broker/acct officer.
The rest can be done thru internet, telephone etc.

easimoni:


BTW, by my estimates you invested over N2M in a company without seeing results? Don't get caught by the Dangote hype, he is a business man not a professional philanthropist.

@ Easi
you are cracking me up here with enuf laughter

@kpineo
Last i heard was that nascon will be paying a very healthy dividend, maybe 60k or something so at least u'll get some money.
that sale was like when u go into the supermarket and they are doing such a great deal on toilet rolls. you dun need but u stil buy,

you have a couple of other options: u could divest a bit by selling some when the price rolls to 19-20 range because i honestly do not think nascon at 25 is the best deal for your 2 million in the short term,

secondly you could buy some more at 17(crazy as this sounds), when the price gets to 20's range again, you might already be in profit,

But if u really have the financial willpower and discipline to wait, Easimoni's advice of long term is the best, wait till this moody market gives you a good price in one of its mood swings

kingzy:

Why so much believe on coy's prospectus? I thot it can be doctored. My dangote sugar certificate I sent for verification for the past two months is yet to come back. Is anything wrong? Are they no longer crediting cscs account direct during POs and why are they still making provision for it during pos?

Yes a prospectus can be doctored but it has a lot of info, goes through a lot of regulation, and any analyst that is worth his salt can suspect unusual patterns, its just the most comprehensive source of info about po's so we really have to use it.

drdaniel:

Finally this info seems valid although trying to verify frm from other souces and not yet able.What do d u guys think.Seems they will be usual over subscription and return of monies.What are the prospects technically.To avoid return of monies some are saying buy in small quantities in relatives names etc.But what about verification and eventual sale.Gurus in da house please reply.easimoni ,aylala, temmie10 ,everybody
http://www.businessdayonline.com/?c=54&a=15631

Lets keep our fingers crossed till their prospectus is out. Very little meaty info available right now.

presido1:

Thanks guy for shading the light. But what is happening to the price do u think it will appreciate again before the end of the year. Since last two weeks or so its on the downward trend with no sign of going up.

When is Guniness and oando giving their dividend?

Yes i would be surprised if the price did not go down. This is the end of a financial year and beginning of another, bonus and dividend declarations and adjustments have also played their part so its not unexpected. Of course it will rise, but how soon i cannot put a figure on that.
It could take up to 2 years before FBN releases really astronomical results but the wait would have been worth it,

BBH:

THANKS ALL,
THIS FORUM ENABLE US IN DIASPORA TO HAVE IN-DEPTH INFORMATION ON VIABLE INVESTMENTS OPPORTUNITIES BACK HOME, ONCE AGAIN THANKS ALL FOR YOUR CONTRIBUTIONS

BBH INVESTMENTS,LONDON

Is that BBH as in Brown Brothers Harriman?

you're most welcome

presido1:

Easimoni
I have some units before the PO and bought some during the PO will i qualify for the dividend and bonus as i was a share holder since last year. last month i bought at 31 and 33 naira. Please let me know if i will get the divdend and bonus

You are qualified and will recieve bonus and dividend payments for all the units you had prior to the po. so if you had 6000 units before the po and then bought 6000 mo during the po, the dividends and bonus will only be credited to the 6000 shares u had before the po.

steeviee:

i bought @ N9.11

Well obviously looks like you have come to the party a bit late but it also means you just bought a short while ago.

So you shld be prepared to wait a bit, my advise for now is HOLD and watch,
I do not expect this stock to drop drastically any time soon, and there is a case that the recent as yet unexplained and unprecedented bullish route of FirstInland may yet continue

But if u do not have time and are in a hurry, get out now, u have not lost. its 9.92 currently

steeviee:

@ easimoni

nice analyses on firstinland bank. i think i have been burnt

Careful there steeviee,
There's a strong market rumour that first inland will merge with diamond.
Besides the price has been appreciating for a while.
Remember, losses are realized in the market only when you sell.
what price did you buy?

shigidi:

@ easimoni,
thats the spirit don't give up on wema. there was a report this morning in the vanguard about wemas upcoming p.o and the MD advised people to buy wema now because when the result hits, the price is going to go haywire. lets hope and pray.
thanks for the intercontinental advice. with this bearish market, im getting confused as to what to buy right now, u see im a new investor(bout three months old) and i don't know any other market but the bullish one. these are what im thinking right now, please tell me what u think.
c&i leasing; with that forecast eps of 66k, it should be good even in a low p/e ratio market.
crusader; good result and full year should be better.
wema, Nigeria-germ, and oceanic/intercontinental for the long long term.
i know flour mills is very good, but the price is kind of high and hence margins should be low.
holla back.

Thanks for the info on wema. i checked it out myself.
Its very logical and i always thot they'd release a good result because all forces are on their side.
FCMB is currently selling at 17 and their situation is similar but might not be as attractive as wema. both going for po, fcmb might even have a lower eps if wema's result is as good as we expect.
About a bearish market, relax, you are on the right track, @ least i know you use sound judgement to make choices on fundamentals, good business, good eps, pe, and u ask whenever u are at crossroads. Bear market is like a heavy rain or storm, it won't damage severely houses with good foundation. in stock market, the foundation is fundamentals. Watch the market for a few mo days b4 buying, you might well get some of those stocks u listed cheaper. its not how long u've been in the market that matters, its your attitude towards learning and becoming a better and more intelligent investor that matters. enjoy bro,

@ Iwerebor

There is no need to fear or loose sleep unduly.

The stock market in the short run can be compared to a voting machine.
There is a lot of follow follow, hence the extreme and unexplainable bull and bear runs which we've all been part of

But in the long run, its like a weighing machine.
Stocks of Good companies with strong fundamentals bought at decent prices will perform and bounce back and give a good return

In a sense also, i could say there's very few bad or good stocks, mostly we have bad or good prices.
So don't panic.
In many ways, the current pullback of prices is good for our stock exchange and for bargain hunters like u and i.

abocana:

Hi guys, I will really appeaciate gurus in the house to give me some details why JAPAUL is a goog stock.

I'm looking to buy the IPO,but don't know much about the company except on this forum.

Actually,i wouldn't have known because.,i don't reside in nigeria,but i bought stocks a lot.

I'm looking to buy 4 long term2-3yrs.

Thanks dudes.

Have a look at this this page of their website

: http://www.japaulplc.com/news.html

Also there seems to be consensus that the eps of the company is currenly around 26k for the year ended dec 2006.

That should gives a fair price of about 5.2 , assuming a pe of 20 which is modest compared to the nse presently. the po is said to be going at 3.95, current price is 6.02, thats also a good discount (35%).

Add that to potential for growth, favourable govt policies and there is a decent case for japaul. its also not a bank/insurance firm so u probably will get your certs soon enough.

I am sure the prospectus will be out shortly and we will get mo info. hope this helps

PTH:

is the bar beach in lagos still home to members of the celestial church of Christ?

hahahaha this is hilarious

@ Easimoni

Crusader is still available. Which broker do you use?
Plus if you sell out and Wema releases the result, u might not like it, esp with all indications of the result

You can divest a bit but not sell all. Wema is coming up with a po soon so the result will come out sooner than later.

quite rightly NEM's rights were at 55k. Without boring you with details, many insurance firms were well subsrcibed and not as glomy as u claim: the ff info is from sec:

unic-89%, prestige-153%, lasaco-81%,law union-135%, Mbenefits-94.7%, crusader=93%, wapic-105%, cont re-100%

I am not saying NEM is the worst, rather i am saying categorically, it is no way the best.
If we just invested solely based on cbn releasing money to insurance firms, we might as well close our eyes and throw the dice on any of the 25 insurance firms listed.

@ wanajo

For the sake of all who will buy this stock at the current price, i hope you are right.

Facts do not lie o. Even if the offer was only 50% subscribed which is unlikely, it is still not attractive.


@ rezigirl
it requires a willingness to study and research
i'm @ temietope@gmail.com