• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

Is C&I Leasing a bull trap?

Nairametrics by Nairametrics
May 18, 2015
in Blurb, Spotlight
Is C&I Leasing a bull trap?
Share on FacebookShare on TwitterShare on Linkedin

C&I Leasing Plc has been flying lately and has continued to catch the eye of a number of retail investors. The share price has risen from 50kobo to as high as 72kobo within a month and closed at 69 kobo on Friday.

Why the rally?

C&I Leasing is enjoying a rally mainly fuelled by a string of seemingly impressive results and corporate actions. The company in its 2014 FY results post a 69% increase in earnings per share to 19kobo (2013 11kobo). The company followed that up with a proposed dividend per share of 8 kobo up 100% year on year. Earlier in May, it also reported a 120% increase in pre-tax profits to N335million and a 93% increase in earnings per share of 13 kobo. These pieces of corporate information have basically triggered this rally.

RelatedStories

efcc

EFCC arraigns Bigibet gaming platform founder Adepoju Abiodun for alleged N855m fraud  

July 8, 2025
Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 

Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 

July 8, 2025

Is it justified?

For a penny stock, retail investors need to be circumspect whenever they decide to embark on a buy decision. C&I Leasing being one, makes us wonder if this current rally is justified. Using rudimentary valuation metrics such as the price earnings ratio indicates a cheap stock. At 69 kobo per share, the trailing P/E ratio for the company is under 4x suggesting an earnings yield of about 28%.

Using the proposed dividend of 8 kobo per share also suggest a dividend yield of 12%!! Very few stocks beat such numbers and could easily pass as a justification for the rally.

Fundamentals

But one will be foolhardy not to consider other factors. For example, C&I has a price to book ratio of 0.23 which by most standards is an indication of how cheap it is. However, that may be deceptive as it indicates a larger problem. The company had a return on equity of 5.9% in 2014 and a return on asset of under 2%.

This suggest the company is doing a very bad job at sweating its assets. In plain terms, it simply means it is hugely under performing. Perhaps that explains why it had remained at 50 kobo for a long time. C&I Leasing traded at over N3 just five years ago. From a Gross Revenue of N14billion this company just makes over N300m. That is like N2 for every N100 in sales.

The business may just be on the verge of turning around as the recent string of results indicates, however operational headwinds persists and the risk that they incur significant impairment charges on some of their finance and operating leases persist.

Other factors

Liquidity is also a factor to consider with this stock. The company has over 1.8billion shares but it trades just over 4 million as its 30 day average. Buying the stock now may present a problem should you want to sell it in future. Also with many hoping to buy for short term profits, miss-timing your entry and exit period may prove very costly in the short term.

C&I also has a deposit for shares of about to N2billion which represents US$10,000,000 unsecured variable coupon convertible notes issued by Aureos Africa LLC on 11 January 2010 for a period of five years. The company has elected to convert this to equity and could result in a significant dilution. The total sum of N2billion is even more than the company’s market cap of N1.3billion. On a flip side, there might also be an incentive to maintain a bullish share price as a way to reduce the impact of dilution. However, one doubts the company will convert these to shares any time soon, not with its share price still in the penny stock range.

Buy sell or hold?

Technical Analysis pundits would probably go for a buy in this instance. The dividend yield of 12% is attractive enough and the impressive Q1 results this year also provides an added level of comfort. However, the fundamentals of the company still leave a lot to be desired as we feel despite the results, it is still a poorly run company. This is not a company we want to rush into despite the bullish signals.

Opinion

Buy, If dividend and short term capital gains is target

Hold, If long term as there are better stocks out there

Disclosure – Nairametrics and the author of this article does not owns shares in C&I Leasing Plc and does not plan to buy shares in C&I Leasing Plc in the next 48 hours. The author of this article wrote it themselves, and did not write this article on behalf of C&I Leasing Plc , its associates or representatives. The article is purely their opinion.

 

 

 

Nairametrics

Nairametrics

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

Related Posts

efcc
Business News

EFCC arraigns Bigibet gaming platform founder Adepoju Abiodun for alleged N855m fraud  

July 8, 2025
Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 
Companies

Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 

July 8, 2025
Purple Lekki issues official statement on the passing of Mr. Obinna Bokolo 
Companies

Purple Lekki issues official statement on the passing of Mr. Obinna Bokolo 

July 8, 2025
United States extends period for work permits for non-citizens
"Japa"

US tightens visa policy for Nigerians, limits non-migrant visas to single-entry, 3-month Validity  

July 8, 2025
AfreximBank approves $200 million finance facility to BUA Group for expansion projects 
Op-Eds

Afreximbank’s credit ratings downgrade: Two worlds, one conversation 

July 8, 2025
How the PalmPay Premium Account is redefining digital banking in Nigeria 
Companies

How the PalmPay Premium Account is redefining digital banking in Nigeria 

July 8, 2025
Next Post
Resistance and Support signals for select Nigerian stocks

[Nigerian stocks] Resistance and Support signals - 15/5/2015

Comments 2

  1. LegenD says:
    May 20, 2015 at 12:34 pm

    One thing is very obvious about C&I LEASING. The market has already priced the stock (looking at their earnings). If the company starts making 30 or 40% of their returns of their Revenue as profit, their earnings is expected to trade at a far bigger level and you should not expect such kind of stock to be under 1 Naira.

    If C&I Leasing continue to make money and declare dividend every year, the share price will move far beyond what you expect.

    Reply
    • Nairametrics says:
      May 20, 2015 at 2:25 pm

      Too many ifs

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • EFCC arraigns Bigibet gaming platform founder Adepoju Abiodun for alleged N855m fraud  
  • Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 
  • Purple Lekki issues official statement on the passing of Mr. Obinna Bokolo 

Follow us on social media:

Recent News

efcc

EFCC arraigns Bigibet gaming platform founder Adepoju Abiodun for alleged N855m fraud  

July 8, 2025
Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 

Unleash Your Inner Hustle: The TECNO Spark 40 is HERE! 

July 8, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics