CCNN 2014 Q1. MANAGEMENT EFFECTIVENESS LEADS TO IMPRESSIVE PAT GROWTH.

CCNN 2014 QUARTER 1 RESULT

       After paying a 2013 dividend of 0.70k which is the highest the company has ever paid in the last three years, CCNN released it 2014 quarter 1 result which has an impressive bottom-line growth despite an unimpressive top-line performance.

CCNN 2014 Q1

          CCNN made an impressive increament in it PAT on a QoQ basis, the PAT grew from 376mill in Q1 2013 to 699mill in Q1,2014 representing a change of 85%, the feat was made possible by management effectiveness in handling all its expenses (distribution, administration and personal) which were all seen to have reduced drastically across board. The company was also able to reduce its finance expenses from 44mill in 2013 to 26mill in 2014.

        Though the company EPS moved from 0.30k in 2013 to 0.56k thereby giving rise to a PE of 16.45 with a 2014 estimated PE of 4.11 which makes the company worthy of consideration, I however remain partly unconvinced due to the bottom-line fortune not arising from its top line which gives rise to subsequent quarter’s sustainability doubts.

      In conclusion, CCNN has made it to my WATCH list while I await subsequent quarter results.

FORTE OIL 2014 Q1 RESULT

             Forte Oil 2014 Q1 Result

              Forte oil has picked up from where it stopped in 2013, touted as the most turn around company on the Nigeria stock exchange in 2013 due to improved business performance, astronomical share price appreciation, early flying of 2013 financial performance and paying an impressive dividend of N4 which amounts to 93% payout from the company EPS. The company has kept up with it trends by releasing an impressive 2014 Q1 result which shows both top-line and bottom-line improving respectively.

        Forte oil has continued with its transformation, recording an enormous 2014Q1 QoQ growth from topline to bottom line. Revenue grew by 30% from 26bill to 34bill while PAT also grew by 108% from 529mill to 1bill on QoQ basis.

      The EPS of the company grew by 109% on a QoQ basis.

      However as peculiar to the sector the company found itself, despite growth in the profit after tax, the profit margin of the company stood at a meager 3.2% while the return on equity stood at 2.8%.

      The company has a PE of 146.7 with an estimated 2014FY PE of 36.57 which makes the company look expensive, however the high PE could also represent investors anticipation of further growth in the company fortune as the share price has appreciated from N101 to a 52wks high of N150 in the last one month.

Questions and comment will be highly welcomed.

Twitter - @1himself

FCMB posts 14% increase in 2014 Q1 PAT.

FCMB posts 14% increase in 2014 Q1 PAT.

        With the effect of the increase in cash reserve ratio for public funds held by banks biting hard on their revenue, FCMB reported a meager 7% increases in it GROSS EARNINGS on a QoQ basis. The bank was however able to make a 25% increase in its NET INTEREST INCOME due to well managed interest expenses.

      The bank also reported a 15% and 14% increases in its PBT and PAT respectively while its Q1 EPS improve slightly from 0.21k to 0.24k.

     The bank was able to manage its operating expenses but performed poorly in it loan losses which increased from 410mill to 1305bill representing 218% change on a QoQ basis.

      With a Q1 EPS of 0.24k ,PE of 14.07 and 2014 FY estimated EPS of 0.97k and PE of 3.52 coupled with a Book value of N7.51 makes FCMB to be in my STRONG WATCH view.

WELCOME to 1himself BLOG: Sterling Bank Quarter 1 (Q1) 2014 financial result...

WELCOME to 1himself BLOG: Sterling Bank Quarter 1 (Q1) 2014 financial result...: Sterling Bank Quarter 1 (Q1) 2104 financial result. After posting an impressive 2013 financial result backed up with a divi...

Sterling Bank Quarter 1 (Q1) 2014 financial result.

Sterling Bank Quarter 1 (Q1) 2014 financial result.

After posting an impressive 2013 financial result backed up with a dividend yield that is above the banking industry average on the Nigerian stock exchange, Sterling bank has released it 2014 Q1 result which is also not far from a sterling performance.

After posting an impressive 2013 financial result with a dividend yield that is above the banking industry average on the Nigerian stock exchange, Sterling bank has released it 2014 Q1 result which is also not far from a sterling performance.

                ·         An impressive increase in its Interest income with a corresponding marginal increase in interest expenses results to the bank having an encouraging 58.14% increase in Net Interest income on a QoQ basis

                 ·         Operating Income was also seen to have increased by 35% on a QoQ basis

                 

                 ·         The bank PBT and PAT also increased on a QoQ basis by 17% and 15% respectively.

                 ·         The bank EPS was however down by 17% due to the increase in the bank Outstanding shares from 16bill in Q1, 2013 to 22bill in Q1 2014 due to its recent right issue.

     

                ·         It should also be noted that what would have been a more robust bottom line performance was marred by an upsurge in the bank loan loss and operating expenses.

         With a Q1 EPS of .15k, 2014 FY estimated EPS and PE of .58k and 4 respectively makes STERLING BANK a company to be listed under my STRONG WATCH view.

The above inferences represent my personal feelings and should therefore not be relied upon in making investing decision.

Twitter - @1himself

EASYKOBO SEASON3 STOCK TRIALS- REGISTRATION BEGINS

REGISTRATIONS BEGING FOR EASYKOBO STOCK TRIALS (SEASON 3)

                Easykobo is a complete finance based website, http://easykobo.com/AboutNigeriaEasyKobo.aspx which has also been helping Nigerian investors to learn via its popular and highly competitive stock trials.

                After the success of season one and season two of the stock trials which were both keenly contested with winners affirming the receiving of the pledged reward , the website is gearing up for season three which I firmly believe will be more keen than the previous versions.

 The website has opened has opened it registration portal for new participant who has interest in the game to register HERE , old players do not need to register if they have not forgotten their user ID and password as I have been able to confirm that my own profile is still active when I logged in this morning.

                What could be the reward this time? For the first season an Apple Ipad3 was giving out to the winner with the 2^nd and 3^rd runner up receiving cash while the 4^th to 10^th positions were also not ignored. The winner of the second season trial went home with a blackberry playbook while the 2^nd and 3^rd runner up also received cash and the 4^th to 10^th positions were also rewarded. So I am sure www.easykobo.com reward for season 3 trials will not short of the standard they started with.

Register and gear up to start the race when it begins..

ALL THE BEST.

To register click on http://www.easykobo.com/RegisterNSE.aspx

Easykobo can be followed on twitter via- @easykobo

INDUSTRY WATCH- INSURANCE SECTOR

INDUSTRY WATCH- INSURANCE

Let us take a look at the insurance sector on the Nigerian Stock Exchange, a sector that is not only in the shadow of itself but also lagging behind. The sector contributes less than 5% to the total Market capitalization of the Nigerian capital market despite having the highest number of companies under its domain. The sector in a general view consists of about thirty companies. However in order to make them comparable I grouped the companies into two.

Group A consist mostly of Insurance companies that seldomly move or change in price. Everything about most of these companies is .50k. Their current Price is .50k, their 52Wks high is .50k 52wks low is .50k.  Above all most of these companies do not have any 2013 quarters result to work on. Companies in Group are listed below-

                                               

Group B thus consists of insurance companies that are liquid and has price volatility. A comparative look at the companies in this group is shown below-

International Energy Insurance and Wapic which should be included were not included due to unavailable 2013 quarters result.

                                                    A look at the Gross premium (Total Income) and PAT of each Company

                                                       The amount each company is generation per each unit of shares.

                                                        The Profit Margin of each firm.

                                           The earnings each company retained per each unit of shares.

                                                                      The price to earnings ratio of each firm.

                                                                             The Return on Equity of each firm.

                                              Current Price of each company against their Book Value.

                                                  Price to book value of each company.

                     Technical comparison of each company based on Current price, 52weeks high and 52weeks low.

INFERENCES

AIICO- The numbers of Aiico is not looking excellent, the company had a 57% Q3 QoQ drop in PAT which accounts for it having the lowest profit Margin in the group.

CONTINENTAL INSURANCE- The current numbers it possesses makes it current price expensive.

   

 CUSTODIAN & ALLIED- The numbers of Custodian look good but its share price is already close to its 52wksH which makes me doubt a possible rise in its share price in the short term

CONERSTONE- The PE of cornerstone insurance looks a little on the high side and other ratios are not really encouraging but putting into consideration that this company move from QoQ pat of 2012 PAT of (71m) to a 2013 PAT of 416m makes it a company to put on a watch list.

LAW UNION –The numbers of Law Union also makes it a company to put on the watch list, the company was also able to move from a negative PAT to a positive PAT on a QoQ basis

MANSARD- Formerly GT Assurance, it’s a company that is selling at a premium due to the values it has created for itself, from effective management to duly rewarding investors with interim and final dividend year in year out. Appeared expensive yet I will not be surprised if the stock sell at N3 in the medium term. The company made a 51% increase in it PAT on a Q3 QoQ basis.

NEM- My feeling about NEM can be deduced from my tweet about it some days ago

Owolabi Afeez  @1himself Jan17 How I wish #NEM isn't in d #Insurance sector.EPS-.39k FEPS-.52k RVS-1.2 PE-2.1 FPE-1.5 BV-1.2 PBV-.69 ROE-33% PatM-32% can u beat that? #NSE

NEM is the stock with the lowest PE in the insurance sector and in the entire Nigeria Stock Market.

PRESTIGE- Prestige numbers looks good.

ROYALEX- Royalex numbers looks attractive.

Conclusion.

                I have been in the market for a few  years now and I know the general apathy towards the insurance sector due to some valid reasons (Cooperate governance issues, lateness of releasing of result, releasing of Year end result that will not be in line with released quarter result and so on). I however vehemently feel they are Companies in this same sector with bargains that are too strong to be ignored. I will advise a pick of one or two out of the entire sector which should then be looked into critically for a possible BUY consideration.

BEST OF LUCK AND HAPPY INVESTING…

NOTE-

The groupings was only done to make this write-up easy for me, it doesn’t segregate any of the company as good or bad.

NEM forms a big portion of my portfolio so any of my biased appraisal of it should be adequately ignored.

The Inferences are based on my personal feelings and adjudication of each company. It therefore should not be solely used in making any investment decision 

Critiques, Comments, Advise and Questions will positively received.

owolabiafeez@hotmail.com

Twitter- @1himself

ADDENDUM- I have an uncontrollable urge to dedicate this to Nigeria Most UNIQUE investor PETER IYEN who we all felt was out of sense when he laid so much emphasis on the insurance sector. He his really a mentor that i learn from even if we both dont concur most times.

Peter Iyen is on on twitter via- @nse_investor . His blog is full of interesting and eyes-opening write-ups, visit http://www.globalnigerian.com

MY SEARCH FOR A PENNY STOCK

MY SEARCH FOR A PENNY STOCK (my Investing ANECDOTE)

 20/01/14

               Some weeks back, after selling my UBAcap and AFRIPRUD I reviewed my portfolio and I noticed I only have one penny stock which is NEM, so I thought of adding. The definition of penny stock varies from individual to individual but I mostly base mine on stocks below N2. Before beginning the search my criteria was strictly SOUND FUNDAMENTALS. So the filtering began, from cheapest stocks to cheapest with lowest PE, I went on and on and finally I arrived at Prestige, NEM, Niger Insurance, C and I leasing, ROYALEX, Trans EXP, NPFmfb and Law Union Insurance.

 I was done quantitatively so I had to look at my quantitative picks qualitatively. Instantly Niger insurance, Royalex and Law and Union was scrapped, why because I am always skeptical about the insurance sector and if I will ever buy I will only buy Aiico, NEM and Prestige as I have always done in the past. So I was left with NEM, Prestige, C&I NPF and TRANS Exp. I also screened out NEM because it already represents a large portion of my portfolio which also made me screen out Prestige since it is also an insurance stock. So finally I was left with C&I leasing NPFmfb and TRANS EXP.

                I then focused my attention on the remaining three companies.

Candidly I was wowed by the numbers of Trans EXP, nice EPS, very low PE, wonderful ROE but I was taken aback with the Turnover and PAT. Q3 PAT of a company is 50mill!! I remember asking myself if the company is a kiosk!!! That was how Trans Exp was ejected leaving me with NPFmfb and C&I

I moved on to C&I and again I was moved, Nice PE, attractive BV with compelling PBV but the Profit margin of the company reveals the rot in the company, the ROE is not also encouraging so C&I leasing was evicted leaving me with NPFmfb

I looked into NPFmfb, the numbers seem positive in all ramification, good PE, relatively low PE ,moderate ROE positive Profit Margin, BV and PBV also looks good. Above all buying NPFmfb guarantees me a .10k dividend which will represent 12.5% dividend yield as I have made up my mind I will not buy above .80k. So that’s how I found a penny stock for myself and the next thing is to swing into action.

I swung into action and that was when by bubble was busted, for a whole week with enormous communication with my broker I could not get a single unit of NPF despite it staying at .75k for three days. I had to go beyond my price limit yet I could not get. When it got to .85k I left it alone.

 This anecdote is basically a way of me amusing myself but the market is the chief owner of bemusement. I have decided to watch the three aforementioned stocks in 3-6 moths time. I will not be surprised if the KIOSK (Trans Exp) Company outperforms the remaining two. That’s MR MARKET for you.

This is just my anecdote, neither a recommendation nor an aspersion towards any of the above stock.

owolabiafeez@hotmail.com

@1himself

 

 

 

 

               

INDUSTRY WATCH- THE BANKS

INDUSTRY WATCH- BANKING SECTOR

The banking sector of the Nigerian stock exchanged is adjudged to be the most active sector in the entire capital market, this write up takes a look at all the banks quoted on the Nigerian Stock Exchange with comparisons based on their quarter three figures and ratios.

 

 

PM-Profit Margin    OS-Outstanding Shares   RVS-Revenue per Share     GE-Gross Earnings           

 

Comparison based on each bank Gross Earnings and Profit After Tax.

 

 

Graph showing the Profit Margin of each Bank

 

                                                                               

                                             Revenue each bank makes for every unit of shares.

 

 

 

                                                                                            

                                                                Return on Equity for each Bank.

                                                                                

                                              Graph Comparing the Current Price and Book Value

                                                                                    

                                                        Price to Book Value for each bank.

 

INFERENCES-

ACCESS BANK – The price of Access bank is properly valued for it numbers and I do not expect much upsurge in the share price in the short term.

DIAMOND BANK- The current price of Diamond bank though close to it 52 weeks high still indicate a bargain, with its quarter 3 EPS higher than that of Access and UBA and PE far below the industrial average. My only fear for the stock lies with what the management decision is going to be in terms of dividend payment for 2013.

ETI-This bank is with huge potential but the bank needs to put many things in order, the bank has the highest Gross earnings in the entire industry and it is also ranked as the second in terms of turnover in the entire market. This makes one to expect a better Profit after tax but the PAT is like an half of GTB and Zenith bank PAT. The bank also seems to be battling with so many internal squabbles though its share price has been able to shield itself from the effect of such squabble. The fact however remains that the bank need to work on its Expenses, cost of operation, provision and all that is zapping it high gross earning. If the bank can do all the aforementioned and also gear effort towards ending it internal wrangling’s it should be a consideration for the medium and long term

FBNH-FBNH seems to be lagging behind among its first tier peers, from it lateness in releasing it quarter result to the result not meeting up with expectations. I however strongly feel FBNH remain a candidate of above N15.6 in the short and long term.

FCMB- FCMB tends to look a little attractive, with a low PE, trading at a huge discount of it Book Value. The bank gave out bonus for 2012 year end without a dividend so the prospect of a dividend for 2013 year end is positive. Probably in the short but certainly in the long the stock should be able to attain if not go beyond its 52wks high of N5.20.

FIDELITY- With a 52wk price of N3.47, a current price of N2.54, possible forward EPS of 0.51k, a forward PE of 4.65, a Book Value of N5.60 and a possible above 0.10k dividend. Fidelity deserves a consideration

GTBANK- GTBank is one bank that has created a niche for itself in the industry, it appears over-valued from it numbers but here is a stock investors tends to look more from the quality of the company and the effectiveness of its management rather than the quantity of the share price. If a Nigerian BANK can have a PAT margin of 38% then that speaks volume.

SIBTC- This bank has paid interim dividend of 0.70k for 2013, the effect which has manifested in the share price by moving from N12 to its current price of N22, there is however a possibility of a low dividend for its year end which might not project the share price further than it current price.

SKYE- Skye bank currently has the lowest PE in the industry, also looking at it from a technical angle makes it attractive.

STERLING-Sterling Bank looks moderately attractive.

UBA-The price of UBA is moderate with its current numbers.

UBN- The management of this bank is proving their tenacity in returning Union bank to its big, strong and reliable status, the share price appears over-priced though with the current numbers.

UNITY BANK- This bank really needs a way out as the management seems not to be getting things right at all, from having the penultimate Gross earning and Profit after tax. The bank also seems to be making a meager 0.01k for every unit of share per quarter, with a forward EPS of 0.04k I don’t see the share price moving based on fundamentals. However considering technicals Unity Bank will be a toast as its current 0.50k is 132% lagging behind it 52wks high of N1.16 . The management is planning a reconstruction of shares and recapitalization I however don’t see that projecting the price in the short term as the simultaneous intention seems like a flip flop where ordinary shareholders will be the end losers

WEMA – Based on PE, Wema bank is the most expensive bank in the industry, it is also the bank with the lowest Gross earning, lowest PAT, lowest EPS and highest PE. The bank does not have any fundamentals neither to support its current price nor to project it forward.

ZENITH- This is another bank that seems to take after GTB

The above inferences are my own personal feelings and should not be used to make any investing decision, I also currently have Diamond Bank, ETI and FCMB in my portfolio so any biased feelings from me toward them in my inferences should be jettisoned.

All Comment, questions and advice will be highly welcome.

owolabiafeez@hotmail.com

Twitter - @1himself

                                         

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