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.

@ 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

If you are thinking of diversifying as a means of preserving your already earned wealth, this is actually a brillant idea.
Maybe not so brillant if you are thinking of building wealth.
If building is your priority, there a better alternatives

@ easimoni

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

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.

stanchuks:

@ the Gurus in particular & All
I sent a post in another topic of this forum for the sale of my Transcorp shares and got three people willing to buy, the highest was 9, i bought for 9.71 on the floor, i had agreed to sell it, then on second thought i felt i should let my broker know what i was about to do, he then ask me if i have not being listening to the news lately on transcorp
Not that i need cash now, but maybe by the end of the year i might
Based on rumor or what's in the news, my question is "WOULD IT BE RIGHT FOR ME TO SELL IT OFF NOW OR LEAVE IT FOR LATER?"

Transcorp is a weird company and we are never sure what is quite going on with them.
In terms of communicating with investors, their attitude is nothing to write homw about.
Having said that, there is a chance they MIGHT do well sometime in the near future.
Transcorp owns hilton, nitel and co and they are about to roll out gsm operations so i can understand your broker.

My Verdict
I dunno when Transcorp will wake up.
I do not even know when they the TS will be lifted
The same person that suspended the stock is the chairperson of transcorp so read btw the lines.
If you are ready to wait for "God knows how long", hold on

IF you belive like i do that your money will work better elsewhere, get out!!!!
If all you do is put the money in a banking ipo with sufficient discount, you will not regret getting out!!!

Naijadr:

I think one of the mistakes people make is holding onto stocks that are going down. The same way u set your buy price, you set your sell price. I'd encourage folks to get a good book on Stock trading period before getting into the NSE. Right now even with its bullish phase, the average joe isnt really profiting much not because the opportunity doesnt exist but because they rely on their broker, some random analyst, or even this forum to tell them what they should do, such as "should I sell?"

Set your Sell price?

While i see your perogative, i have to disagree with you on that investing philiosophy. It does not work with all situations. IF you have bought at a good price a value stock i.e. a company whose balance sheet speaks for them and has inherent room for expansion championed by a diligent and transparent mgmt, the fact that the price goes down should not prompt you to sell just because you set a sell price. In fact for a stock with good fundamentals, a lower price should make you consider buying more units.

Price can go down in the short term for many reasons ranging from rumours, sentiment to panic to market forces et al. A good stock is a good stock and the market will catch up with it in time. Do you want to sell a good stock because it has gone below your sell price even if the reason for the price drop was a baseless rumour?

For short term investors however and speculators, news from variety of sources becomes very important. A company with good press will suddenly appreciate and one wih negative press will move southward.

A better logic is to ask is "Why is a particular stock going down?", that can be a pointer to sell.

i agree with you on the need for investor education tho. I love reading investment books and i have a lot but none answers these daily questions, thats why investors need to interact and rub heads together.

easimoni:

Bank IPOs don tire me. Won't there be an end?

Word to the wise, wait until the new shares are listed so you can form a true picture of the stock's fundamentals.

Meself don tire for the po's but person need to see how to profit from them.
I prefer trading the secondary marke trading but there will be opportunities to profit Even if it lies in the pre and post offer rallies.

Afterall i am sure you would have liked to have waited in the sec market for FBN and got out at say 56. decent profit.

I believe one of the reasons why bankin sector will not see any drastic correction for a while will be all these po's but it does prompt one to really beware what the future holds.

i am not a big fan of po's too for reasons of time it takes to get cert, opportunity cost of your money, no liquidity, no sincere analysis but we'll still work around them so i am waiting for them.

I was dissappointed that GTB went for GDR when the money could well have been raised in naija. If they had gone by way of po, we would have been licking our lips waiting for the suspension to be lifted.

Anyway, we have time to prepare for the others.

make i pay rent first, i go see my weti remain na

nossycheek:

Is Fidelity Bank PO out?

NO, Fidelity is not out. W are expecting it in september shortly after access ends.

expected banking po's and times

fidelity-september
fcmb-september
bank phb-october
sterling-october-december

wema and skye-not sure

@ Toni
I just read the article in the Guardian too.
Offer is slated for between 50-100BN.
Very interesting development there.
Looks like this is the time for banking stocks,

Entering at 8 is quite tricky tho, i am guesin the eps may be around 30k, pls correct me if i am wrong

@ Tmoni,
where did you hear abt Sterlig po in q4?
can u provide a link or sth?

lolobo:

This has been quite an educative discourse. And to know that a lot of people are ignorant about the basic information to look out for when investing is not an excuse.

We all need to spend some time in finding out the facts which will guide your decisions. And I think that was what proshare set out to achieve in raising such an interesting discourse to enlighten us, get people's views.

I have gone through the Access Bank Analyst report on the Proshare website, which can be downloaded. It is quite a detailed anaysis of the Access Bank stock. I think you guys should go through the report and then make your decision. Dont be moved by hear-say. You have to be a wise investor so you don't get your fingers burnt.

http://www.proshareng.com/reportcentral/analyst_reports.php

Action, get Access Bank shares today! Contact me by email if you are interested in buying access bank.

Hahaha now u're marketing lol.

Every offer is hyped by th epeople marketing it duh,

ty_ademolu:

Hello. During the time of the mad rush for penny stocks and insurance stocks. I made a silly mistake and sold some of my blue chip stocks to buy stocks like.

Crusader, NEM, Mbenefit, Dangote Sugar, Lasaco, UACN, NAHCO, RTBRISCOE. Even though I only bought small amounts in each of this stocks. the collective loss is bombarding me and I have not gained anything off them so far.

Right now, I'm frustrated and would like to get your honest opinion on which stocks I could hold and which I could sell. I have lost up to 30% on Crusader, NEM and Dangote (bought at N55 (some stockbrokers are wicked)).

Please help before all this stocks enter N0 each. Thanks

Relax, markets fluctuate due to investor's expectations and other factors. None of your stock shld reach zero (these companies have assets and balance sheets that speak for them). Stocks like Crusader and MBenefit, even Lasaco are currently trading at fairly attractive prices and if they can grow their earnings along the lines they have been doing, there is no doubt about an uprise. Another surge in Insurance stocks will see you enjoy good returns but how long might u wait? Thats a million dollar question.

MBenefits earnings are very strong. Crusader also paid a dividend of 15k a whole ago, If you have money, i would ask you to watch carefully, if crusader drops further, buy some more units, its has been dropping mo forcefully but its books are not bad at all.
Its best to take advantage of pricing irrationalities in the market if you want to make significant gains.

@ Jehosaphat

We are all learning here o. Thats the purpose of this forum afterall.

i think the choices you are making will definitely make you richer.

Fidelity is not clear cut. For one thing, it is more expensive than Access. It will only be justified if they can expand faster which is very possible. i saw the investment ratios for fidelity yestada and it is not looking too eye catching in comparison to its peers. NOnetheless i have a few holdings i bought at 6 naira and i am HOLDING (jus might buy a few units of the offer too).


Ashaka still has a lot of value. The question now is price. i am carefully watching it too. You can enter now but it is a value stock so you must have at least 1 15-24 months time span i.e. its not the favourite presently.

My best stocks: Try this--Bought prestige insurance a few years ago at 20k, this year its been ranging around N7.5. There is no substitute for long term. This was a pure fluke tho. NO analysis.

If you want to sell your FBN at 51, i might just buy from you lol.
HOld it, i am thinking 55-65 at least,

i have met Kiyosaki before myself in a confrence in singapore and i can tel you the man is for real. Reed is jus looking for publicity. Anybody who has read that book would not even be bothered by this mr reed.

If kiyosaki made up the rich dad story, then he is a bigger genius than i thought

oh then you can just HOLD like a patient investor if you can keep your nerves under control and sleep well at night

You guys have a few options


1. if you are really convinced that the stock will bounce back , you can buy extra units at 17 and dilute your holdings. that way, when the price gets to 22 or 25 again, you would have made profit.

2. if you are not sure about the fundamentals and you bought purely on the marketing for the sales, you can sell all or part of your holdings at the current price and invest in cheaper public offer which is at a discount. that way you will make more than your losses.

jehosaphat:

@ Temmie 10
I have about 300k and I am trying to stretch it to fit Dangote Flour ( don't know when it will come out), Access bank ( on now), WEMA PO (coming up soon) and impending Japaul Oil. I am also hearing a lot about Small-cap stocks like Cornerstone insurance, Liz Olofin ( if i can get it) and Livestock feeds. If you were to choose 3 stocks out of all of them to split the money, which would you choose and in what ratio? Thanks man,

If you are trying to grow your stock. The best advise i can give you is concentration. that means concentarte on 1 or 2. concentration grows wealth, diversification preserves it.
About the stocks, my humble opinion is
1.japaul oil (because i believe it has very huge growth prospects and po for non-banks give certificate faster)
2. access (prospectus look very promising)
3. Cornerstone (price right now is good and company is growing pat very well)
4. Wema (good market forces, po coming out, rumour of foreign investor)

i dun know much about liz olofin and livestock. dangote flour too is very unknown as the prospectus is not yet out but i heard its strong, but the question is "is the compan worth 75BN naira?"
i thinkin a year;s time all 4 should have given you at least 60% returns,

@ Analyst

If you have proof of shenanigan accounting, pls bring it into the open. Because apart from that, the prospectus shows very good prospects for the offer.

I will take a share reconstruction anyday as long as it increases the value of my holdings.

aksance:

Oops! Kindly read the analysis before responding!! I never said that '125% oversubscription [means] PBT * 5 of 25% oversubscription'!!

Agreed that finance is not maths, but we can use maths to make sense of finance. Otherwise no need for fundamental analysis!! I just used estimated the risk-free return (assumed to be 10%) on the amt of over-oversubscription (the N375bn over the 25% oversubscription included in FBN's prospectus) to estimate the worst-case scenario future value of FBN shares and will like gurus (read: accountants/people with knowledge of finance) to provide a critique.

You r right, though, FBN is the big one, but for me, EPS is king, not shareholders funds or PAT

Any company that expects to operate on 10% risk free return (esp a bank) should pack their bags and close shop, they are better off on the money market.

Having said that, EPS is a good yardstick even though it depends hugely on the company's earnings in relation to shares, so you cannot throw away shareholders funds and PAT exactly, thats where our beloved bonuses from the elephant come from.
in an emerging economy, these circumstances will play out funny because there is a struggle for the big ones to emerge.
And that goes beyong just investment ratios. Did the ratios show you that Access was going to grow phenomenally i the last quarter. PAT growing by 725% against all expectations.
If we live by eps alone, we will miss the biggest windfalls. All our analysis, eps, dy, pe should always be balanced with a view to sound company management, investor sentient (yes, investor sentiment esp in a market like Nigeria), a company's long term profile and sustainability.

do you mean you are happy with Intercontinental absorbing 700% but FBN cannot do something similar. Note that one of the reasons that FBN was bought into so heavily durin the offer was because the market was beginning to correct. IF nervousness comes to market again, FBN will still be on the upside, laws of demand and supply will come to play and there goes your eps again.

i like your analysis, thing is we have to consider everything. Companies are not equations, they are businesses. The formulas help us but we cannot separate them from the business environment.

it is up to FBN mgmt to show that they nderstand the banking terrain in Nigeria and invest the extra cash (which was anticipated) wisely

jehosaphat:

Hello Guys,
Awesome website!! In this century the biggest asset is information and I have been blessed to get well researched, humorous and eye-opening information. I am a student in the US and I just started getting into the Nigerian stock market recently using loans and scholarship monies. As a newbie, I have 3 questions.
1) Has to do with penny stocks, Ive been to the penny stock thread and a lot of the info there is mostly hindsight information "If you had bought this at such and such time you would have made such and such, " ( Japaul, Triple Gee, Afroil, Oando, Insurance stocks, Beta Glass etc). I would like to hear if you guys have any promising penny stocks in mind right now.
2) Is DanSug a long term stock? I bought some at N18, watched it rise to 56 and drop back to where it is now. Should I hold on or sell? What about Access Bank? if i buy some should I sell at its short-term peak or is there potential for long term growth?
3) I am watching the dust rising about alternative forms of energy, in the next 10 years i predict that individuals going into cassava/corn/sugar production would benefit by selling their products on the world market as a source of ethanol. Are there any such "farm-based" companies listed on the stock exchange for a long-term buy?.
All advice welcome!! Thanks for taking the time to reply.
Keep up the good work guys, I havent been home in a while so I am pleasantly surprised by the level of growth and sophistication in Nigeria.

1. for Penny stocks, Japaul Oil is coming up with a po soon, its at a discount of 3.95, the eps for the company looks good and there is potential for expansion. Most penny stocks are getting overpriced, those that will outperform might do so on the back of huge speculation so its not easy to predict. You can look into Insurance, companies are posting record profits. Cornerstone Insurance is another one, in their most recent result, profit was grown at almost 475%, similar situation for Mutual benefit. Year end of these companies is December 31 so there is huge possibility of a sudden upside

2. Dangote Sugar has good fundamentals. Hold on to it for now. Many analyst still predict it will reach 60. IN my view, its a good stock because of very attractive dividend policies. The forecasted eps for 2007 to 2010 is 179k,177k,203k,226k. Dividend yield on the stock is forecasted to grow at 5.56, 6.67, 8.33, 9.44. There are still significant gains on that stock.

3. Yes alternative forms of energy are making waves, but investors need something concrete. IN Uk many companies rushed into green technlogies when theenvironment was getting big. NOt all of them survived. i think that sector still requires more observation of how events unfold, at least in my humble opinion

aksance:

Another scenario for the gurus in the house, this time with First Bank:

Assuming the bank absorbs N500bn from the recent offer, coupled with the 1 to 6 bonus, and has a total of ~27.5bn shares outstanding, what is the attractiveness of this stock going forward? Here is an amateurish ‘back-of-the-envelope’ hypothesis:

• Expected 2008 PBT assuming 25% oversubscription N35.4bn (FBN full prospectus pp13)
to be generated from N125bn from offer (125% subscription) + N76.8bn from current shareholder funds
• This leaves a balance of N375bn (500bn-125bn) from public offer
• Assuming a worst case scenario, if N375bn is invested at a conservative (?) rate of 10%pa (e.g. by making deposits like NNPC and other govt parastatals in smaller banks - is this possible??), it yields N37.5bn/year
• Assuming it takes 6months into FBN’s financial year for CBN/SEC et al to vet the funds, yield drops to 0.5*N37.5bn = N18.75bn in the 2008 earnings

• Hence, if the above assumptions hold, consolidated PBT is N35.4bn + N18.75bn = N54.15bn and PAT is N42.78bn (assuming 21% rate used in FBN prospectus)

• This further yields an adjusted EPS of N1.56 (based on 27.5bn shares) and a fair price of N31.11 (assuming a P/E of 20)

Implication: based on this worst case scenario, those of us that bought into the offer@N33 need to have >1 year investment horizon to benefit from capital appreciation (except the hype continues and P/E's >30 is still the norm)
Now to the gurus in d house,
• Have I missed something out?
• Is the assumption of getting a MINIMUM of 10% return on the N375bn ‘balance’ of the offer reasonable?

While i appreciate your calculation which is eye opening, u need to realise that Finance is not mathematics. 125% oversubscription does not mean PBT * 5 of 25% oversubscription. And u can be sure that if FBN indeed has 125% oversubscription, the PBT will be very diff from what u have calculated.

Nigerian banks are in a struggle where only the most profitable will survive. some will be swallowed, some wil be swallowers, it is now up to the management of FBN to decide how to flex muscle in the light of whatever is the exact fiure of the oversubscription. What they do will determine price but by me, FBN is a definite HOLD and as a matter of fact, BUY when the price becomes affordable again (probably after this rally cools down). If there is one bank whose share price can reach the 1 dollar mark in the future, this is it.

@ SOJ, Have you had a look at the prospectus at all?

@ Wanajo

The fact that Sterling is an acquisition target should make one consider holding its shares,
It will be sold at a premium if it does get acquired according to you

fojames:

dANGOTE fLOUR IS DEFINITELY a good buy no matter when they come out with their offer. People are arguing about how well it will do, the gist is don't try comparing it with Dangote Sugar but I can assure you that it will do very well.


I'm waiting for the issues surround ing the offer to clear up, once it hits the market, there is going to be a rush for it and the price will appreciate in a matter of weeks, just watch out!

@ fojames, why do you think the offer would be successful? Have you seen the prospectus? Do you know why the ipo has been delayed. Note that i am not disagreeing with you. i am just questioning your reasoning and demanding that you back up your optimism with facts?

quote author=Evept link=topic=69111.msg1336240#msg1336240 date=1185648549]
Please what's the differece between shares and stock market investment ?
im new to this and interested in buying shares and i will like Nairaland user's that are into Shares and stock market biz
to explain to me the difference ,there advantages and disadvantages between the two investment.
and which one is more stressful or less stressful for someone living abroad,since we are not in Nigeria to watch the market?
your help will be appreciated.
thanks,
Evept
[quote][/quote]

they are basically the same thing. its like asking whats the difference between fish and the fish market.

shares are proof of part ownership of a company and they are traded on the stock market.[

Access looks very well priced with very good returns prospects, but wont' give you a return in 3 weeks though, 1-2 yrs is mo like it.

oasis in 3 weeks? very very few short term predictions are ever true but some are so u can always give it a shot.

I have been watching this stock closely.
Yes its been dropping prompted by huge selling off and dividend mark down.
However, its not yet time to buy, one should wait for a further drop.
I any case, Ashaka is a long term when you do buy (at least 1-2years)

segedoo:

hello folks,
concerning the 1bn naira capitalization for stockbrokers, does anyone know whether capital assets ltd can meet up?

i've been with them for about 5years now and they have been satisfactory but in this era of recapitalization, will they be able to evolve to the next level with ease?

which of these confusingly numerous brokerages execute trades almost immediately on market order?

also would you recommend intecontinental capital markets?

if you have a portfolio worth about N6m, which stockbroker will you use?

Capital Assets wshould have no problem reaching the 1 billion naira mark.
they have been around for a while and have several high net worth investors.
If i had 6m, i would consider Zenith Securities because they give u an option of investing double your money, in this case 12 million (its called margin financing where they borrow u some amount and its more appropriate if you are quite experienced.)

Yeah insurance stocks have been falling for about a month now,
i hope the gurus out there can give us some insight.