February Analysis

The month of February started on a rather flat note. The first day started with a slip in values of securities except for marginal increases in International Energy Insurance, which I do not intend to hold for the long term and also that of Ashaka Cement, which I intend to sell to purchase more of Crusader Insurance.

International Energy Insurance
At the present value of N6.01, this stock is seriously overpriced. It has a year end (Dec 2007) PE of 42 at the current price with linear projection based on 3Q results of N590M PAT and 5.5B outstanding shares. The fair value is N4.29. My only hope is that they will really do the public offer that has been in the rumor mill for June. I will still hold and wait for their year end results and see the trend before making my final decision. Meanwhile, I will sit on my haunches and watch.

Crusader Insurance
This stock is the jewel of all my holdings as I intend to get as many of it as I can. It has been confirmed categorically that they are coming to the market to raise more money before the end of this quarter. I know that their game plan is to release their year end results for Dec 2007 and push up the price a little bit before coming to the market. At the current price of N7.62 with N576M PAT for 3Q and outstanding shares of 3.37B, the year end (Dec 2007) PE stands at 33 meaning that it is already at its fair value based on the Insurance Sector and I don’t foresee it going much below or above this price until they release their FY results.

C&I Leasing
I keep wishing I had bought this stock earlier than I did but there is no regret as I have made some gains out of it. The whole idea of the game is not to be controlled by emotions so as not to lose everything. Its present value of N9.25 is on the high side too but there is no predicting the market as what can happen. I await their FY results. Based on 3Q PAT results of N279M and outstanding shares of exactly 2B their projected FY (Jan 2008) PE at the current price is 50. Now that stock is outrageously expensive! I have decided to hold on and wait to see what their FY results will say premised on the fact that their incursion into other West African countries and being the only Suzuki franchise in Nigeria may offset my linear projections. I will also watch and wait as events occur.

Ashaka Cement
This is one stock I was happy to buy but not too happy to hold seeing what potentials they hold and have refused to tap. But hold I have to till I can make my money for buying and selling back, at least. I have not been able to lay my hands on their results so right now I am driving blind with no sign posts. I have decided to sell once it gets to N55. There was a time it went down to N46 in the last two weeks but rose up and is back to N51. I bought it at N50.40.

GTBank
This stock has been holding itself around the N33 zone for a while just floating around that particular figure, never getting below N32 and never going beyond N34. Its 3Q un-audited results for Nov 2007 with PAT of N11b and outstanding shares of 13.679b gives a projected FY (Feb 2008) PE of 32 at the current price of N33.71. Now that is another expensive stock. I don’t intend to hold for a long time. I have a target price of N43, which hopefully should be hit by March ending latest.

UBA
One of the most powerful banks in Nigeria. I bought it because of their N10b 1Q results ending Dec 2007. It currently has about 10b outstanding shares making its FY projected linear PE at 12. That is the only holding that I have with such a serious forward looking PE, maybe because the year end is still far ahead compared to the rest. I bought it at N51.4 and I am presently at a loss but I feel so comfortable because market correction will come into play before you can say Jack Robinson.

RT Briscoe
I have so very small amounts of unit in this company, thanks to my stockbroker who refused to buy as much as I asked. Based on 1Q PAT results of N149M in March 2007, their projected FY (Dec 2007) PE based on 363M outstanding shares comes to 18. Now, that is a serious buy. I wish I had money to buy more. They are likely to surpass the projection because of their collaboration with Ford which will go a long way in influencing their bottom-line.