Forte Oil Plc released its 2016 Q1 results showing pre-tax profits rose 55 percent to N1.3 billion. Revenues also rose 7.7 percent to N35.6 billion. This follows an impressive 2015 full year results where the company reported a profit after tax of N5.7 billion up 30% from the previous year. Profits attributable to shareholders of the company actually rose 93% to N4.3 billion.
Forte Oil share price at the time of the release of its full year results was N279 and rose to N342 by the end of February 2016. It will be the highest ever for the stock since its remarkable run that started in 2012. The share price has been on a downhill since then.
Source: Bloomberg
Analysts opine that the downward trend in share price has got little to do with the results of the company as fundamentals seem to be holding up. Rather, the current drop may be attributed to the Forbes list of richest men in Africa which was announced back in March 2016. According to legend, stocks associated with companies owned by billionaires typically go through a rally in the preceding months to the announcement of the billionaire list. This is because, Forbes typically relies on the market share of quoted companies to determine how rich billionaires are. This is purely conjecture and has not be proven yet, however the trend is remarkable.
Forte staged a brief comeback on Thursday, gaining about 5% to close at N199.48 snapping a 5 days losing streak. As we have always said on Nairametrics, it will be at your peril to bet against Forte Oil as the stock has always shown strong resilience.
THERE IS ONE IMPORTANT POINT THAT IS MISSING ABOUT YOUR ANALYSIS OF FORTE OIL,PLC DOWNWARD PRICE TREND: THE COMPANY RECENTLY RELEASED BONUS SHARES TO SHAREHOLDERS THE RESULT OF WHICH PROMPTED THE SALES OF THE BONUS SHARES BY THE SHAREHOLDERS! A CLEVER SHAREHOLDERS WOULD HAVE KEPT THE BONUS SHARES BECA– USE OF THE ANTICIPATED GROWTH OF THE COMPANY. SHAREHOLDERS OFTEN ASSUME THAT AFTER ALL THEY DID NOT PAY FOR THE BONUS SHARES AND AS SUCH THEY COULD DISPOSE OF IT AT WILL. THE ASSUMPTION IS VERY WRONG. JUDGING FROM THE LATEST FINANCIAL REPORT OF THE COMPANY, AND ALL THINGS BEING EQUAL, THE UNIT SHARE PRICE OF FORTE OIL WILL SURELY CROSS N400.00K PER SHARE! THIS IS MY CONSERVATIVE ESTIMATE. THE MANAGEMENT OF FORTE OIL HAS A DETERMINATION TO EXCEL AND PUT SMILES ON THE FACES OF THE SHAREHOLDERS . I HAVE NO DOUBT THE COMPANY WILL CONTINUE TO GROW PHENOMENALLY. NO DOUBT, FORTE OIL IS A GOOD LONG TERM INVESTMENTS AND SHOULD REMAIN A BUY FOR A LONG TIME.
Hello Josiah Ilori, Just to remind you of the current share price of your beloved FO, it is currently trading below N70 per unit. So how market