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Guinness Nigeria is a SELL

@guinnessngr is a SELL in Nairametrics opinion due to the poor fundamentals of the brewery industry.

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Buy/Sell/Hold, Guaranty Trust Bank, Nigeria Stock Excahnge

Stocks on Nairametrics’ Buy/Sell/Hold are drawn from various analysts’ reports, as well as the top gainers and losers of the prior week.

Guinness Nigeria: SELL

Recent results: Results for the Q3 period ended April 31st, 2019 reveal that revenue dropped from N105 billion in 2018 to N101 billion in 2019. Profit before tax fell from N7.8 billion in 2018 to N6.2 billion in 2019. Profit after tax also dropped from N5 billion in 2018 to N4.2 billion in 2019.

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Price Information

  • Current Share Price: N49.05
  • Price to Earnings Ratio: 16.43X
  • Price to Book ratio: 1.2
  • Year to Date Return: -31. 9%
  • One Year Return: -51.83%

External View: Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a twelve-month target price of N74.70, which represents a potential upside of 45% from the stock’s price of N51.50, as at when the report was prepared.

Analysts at FBN Quest have an ‘Underperform’ rating on the stock. They have a target price of N60.30, which represents a potential upside of 17.1%, from the stock’s price of N51.50, as at when the report was released.

Our View

Guinness Nigeria Plc is a SELL in Nairametrics’ opinion, even though the stock is trading at multiyear lows and at a PE ratio lower than Nigerian Breweries Plc. The fundamentals of the brewery industry are generally quite poor.

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Competition between the big three firms (Guinness Nigeria, International Breweries, and Nigerian Breweries) is intense. In the event of the scheduled increase in excise duties taking place, the companies would face even more pressure, as consumer demand remains weak.

Guinness Nigeria‘s Q3 2018/2019 results also show a marked year on year decline.

Beta Glass: HOLD

Recent results: Result for the first quarter period ended March 2019 shows that revenue increased from N6.4 billion in 2018 to N7.1 billion in 2019. Profit before tax rose from N1.6 billion in 2018 to N1.8 billion in 2019. Profit after tax also rose from N1.1 billion in 2018 to N1.2 billion in 2019.

Price Information

  • Price to Earnings ratio: 6.37X
  • Price to Book ratio: 1.22
  • One year return: -16.11%
  • Year to date return: 0.95%

External View: None

Our View: Beta Glass Plc is a HOLD in Nairametrics‘ opinion. The stock has outperformed the NSE All-Share Index which is down 9.52% year to date. Q1 2019 results have also shown a slight improvement year on year, at a period when many companies experienced a slowdown due to the general elections.

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Stanbic IBTC Holdings: HOLD

Recent results: Result for the first quarter ended March 2019, shows that gross earnings increased from N57.3 billion in 2018 to N58.6 billion in 2019. Profit before tax, however, dipped from N26.6 billion in 2018 to N23.5 billion in 2019. Profit after tax also dropped from N23 billion in 2018 to N19.1 billion in 2019.

Patricia

Price Information

  • Current Share Price: N44.05
  • Price to Earnings Ratio: 6.6X
  • Price to Book Ratio: 1.74
  • Year to Date Return: -8.13%
  • One Year Return: -5.19%

External View: Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a target price of N53.70, which represents a potential upside of 16/7% from the stock’s price of N46, as at when the report was prepared.

Analysts at FBN Quest have a ‘Neutral’ rating on the stock. They have a target price of N49.80, which represents a potential upside of 8.2% from the stock’s price of N46 as at when the report was prepared.

Our View: Stanbic IBTC is a HOLD in Nairametrics’ opinion. While Q1 2019 results show a slight decline, the stock has not declined significantly year to date to warrant an entry.

Investors would be better off waiting for second quarter 2019 results before deciding to take or exit a position.

Disclaimer 

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Please consult a financial adviser before making an investment decision. 

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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FEATURED

Official: Nigerian Treasury bills calendar for Q3 2020

Official: Nigerian Treasury bills calendar for June – August 2020

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Treasury, bills, calendar, Central Bank

The Central Bank of Nigeria (CBN) Published its Treasury Bills program for June to August 2020, indicating that it plans to raise about ₦821.8 billion in cash.

Check out: CBN says commercial banks can invest in Treasury Bills for now(Opens in a new browser tab)

The Central Bank sells treasury bills on a bi-weekly basis to investors and is one of the safest investments available. Interests are paid upfront and the principal paid in full upon maturity.

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Learn to invest in treasury bills here

3rd quarter of 2020

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READ ALSO: Manufacturing PMI slide into recession territory

2nd quarter of 2020

READ ALSO: $14 billion Dangote Refinery: uncertainty surrounds take-off

1st quarter of 2020

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Patricia

READ MORE: UPDATED: Nigeria received $5.85 billion capital inflows in Q1 2020 –NBS

4th quarter of 2019

Treasury bills calendar, Treasury, bills, calendar, CBN

Calculate Treasury Bill

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Business News

Precious metals slump, investors focus on Central Bank’s intervention

Gold fell on Friday morning to $1,717.10. as global investors await the release of Friday’s U.S non-farm payrolls data for May

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Nigeria Mining Sector shows growth prospect despite low bank credit provision, Gold hits eight-year high as global recession sentiments strengthened, Gold hits three weeks high, Investors rush to gold, Gold Future Drops to $1727.80 as Tensions Escalate between America and China, Precious metals slump, investors focus on Central Bank’s intervention

Spot gold went slightly lower, trading at $1,711.57 per ounce by 4 am local time on Friday morning and gold futures was down to $1,717.10.

Gold collapsed like a house of cards as investors overlooked civil unrest in the United States and heavily focused on hopes around central bank intervention and economic recovery,” said Lukman Otunuga, senior research analyst at FXTM.

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READ MORE: Why the NNPC wants $5 billion advance payments for Nigeria’s crude

Gold fall on Friday morning also came as global investors await the release of Friday’s U.S (United States.) non-farm payrolls data for May, scheduled to be released at 1.30 pm Nigerian local time.

“There are quite a few market participants still bargain-hunting gold given the fundamental backdrop of the coronavirus crisis and ongoing recession,” Julius Baer analyst Carsten Menke said.

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(READ MORE: Gold prices surge by 17.4% in 2 months due to global economic crisis)

However, investors are still waiting to see whether the easing of restrictions will lead to a second wave of infections, supporting demand for gold, Menke added.

Gold, Gold prices tick up as President Trump decides on China today, Gold Prices Surges, Protests Erupts In America, Precious metals slump, investors focus on Central Bank’s intervention

What you need to know about Precious metals: Precious metals include gold, silver, and platinum. Gold and silver are the most popular metals, and have been used by jewelers, and as wealth status symbols since ancient times. Global investors use precious metals to hedge against inflation.

READ ALSO: Global oil market to re-balance in 2 months’ time

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Meanwhile, palladium gained 0.34% to $1,947 an ounce, while platinum lost 0.31% to $833.91. Silver was down 0.63% to $17.9 4am local time, having hit a more than three-month high of $18.36 on Monday. 

Patricia

“Some people are buying silver just because it’s much cheaper than gold (or) platinum,” a trader from Tokyo-based retailer Tokuriki Honten said.

 

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Billionaire Watch

Stock Market rains big for Nigerian billionaires in May

The gradual easing of the lockdown, which started on May 1, appears to have brought some relief to these men, giving them room to recover some of the earlier losses.  

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Nigerian billionaires lose billions amid COVID-19 pandemic

The news of the lockdown hit raw nerves across all sectors in Nigeria. One thing that was obvious from the onset was that everyone was going to be hit somehow, but what no one could say for sure, was how.

Nairametrics had earlier examined the first 12 weeks of COVID-19 in Nigeria, and found that Nigeria’s billionaires lost billions between February and April. However, the gradual easing of the lockdown which started on May 1, appears to have brought some relief to these men, giving them room to recover some of the earlier losses.

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Jim Ovia
Zenith bank founder Jim Ovia is the largest individual shareholder with 3,546,199,395 direct shares and 1,513,137,010 indirect shares.

Zenith bank closed April at N14.3, putting the value of Ovia’s total 5,059,336,405 shares at N72,348,510,591.5 (N72.35 billion).

During the month of May, the share appreciated by 18.2%, and was worth N16.9 at the end of trading on May 29.

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With this, the worth of Ovia’s 5,059,336,405 shares increased by N13.15 billion to N85,502,785,244.50.

The volatility of the shares in the previous quarter had seen the billionaire lose about N21.2 billion, but May 2020 sure gave him a chance to recover some of this.

READ ALSO: Forbes 2020 world’s richest rankings: Only 4 Nigerians make exclusive billionaires list

Herbert Wigwe
Group MD/CEO of Access Bank, Herbert Wigwe, has 201,231,713 direct shares and 1,184,680,195.5 indirect shares with the bank, totalling to 1.39 billion shares.

At N6.60 per unit, the total shares were worth N9.15 billion (N9,147,018,596.1) on April 30.

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Access bank stocks moved upwards to N7.1, bringing the worth of the stocks to N9.84 billion (N9,839,974,550.35).

Patricia

Wigwe’s stock value gained N692.96 million, a mild compensation for losing N2.22 billion in the first 12 weeks of COVID-19 presence in Nigeria.

READ MORE: Herbert Wigwe sells 28.8 million Access Bank shares

Aliko Dangote
Dangote Cement shares were worth N130 at the end of April, having had a rough first quarter. However, the price improved over the next four weeks and ended May 29 at N139 per unit.

Aliko Dangote directly owns 14,500,315,501 shares in Dangote Cement Plc, as well as 27,642,637 shares which he controls through Dangote Industries Limited.

All 14,527,958,138 shares were worth N1.88 trillion (N1,888,634,557,940) on April 30, and the value increased to N2 trillion (N2,019,386,181,182) by May 29, an increase of N130 billion (N130,751,623,242).

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A similar trend is also seen in Dangote Sugar where share price increased from N12.45 on April 30 to N12.90 at the close of trading on May 29.

The billionaire directly owns 653,095,014 shares and indirectly owns 8,122,446,281 shares through the Dangote Industries Limited in Dangote Sugar, summing up to 8.77 billion shares.

All shares were worth N109 billion (N109,255,489,123) on April 30, and appreciated through the month of May to close at N113 billion on May 29.

From the increase in the market share price of Dangote Sugar, Aliko Dangote became N3.9 billion (N3,948,993,583) richer.

Summing up the gains in Dangote Cement and Dangote Sugar, we can see that the billionaire added another N134.7 billion (N134,700,616,825) to his worth.

This article does not include calculations for NASCON. Aliko Dangote is not listed on the board, hence, there is no way to confirm the exact amount of stocks he owns in the company.

However, NASCON allied shares were worth N10.05 on April 30 and made a 10.4% increase to N11.10 by May 29.

READ MORE: Dangote: The King cement maker moving against all odds

Tony Elumelu
The popular TOE, as he is called, controls a total of 2,304,211,118 units of shares – 190,100,234 direct and 2,114,110,884 indirect shares.

UBA’s shares tried to regain losses from earlier months, and moved from N6.05 on April 30 to N6.65 on May 29.

The total worth of Elumelu’s 2.3 billion shares appreciated from N13,940,477,263 on April 30 to N15,323,003,934 on May 29, giving the billionaire an additional N1.38 billion (N1,382,526,670.8).

Compared to the N1.49 billion lost in the preceding 12 weeks, Elumelu clearly recovered most of the earlier losses.

Abdulsamad Rabiu
The merger of CCNN and Obu cement gave birth to BUA cement. The 2019 financials from the company shows that Rabiu owns 19 billion (19,044,995,225) direct shares.

He also has indirect shareholdings through 3 companies, totalling to 12.2 billion (12,225,657,346) units.

BUA cement stocks ended April 30 at N32.60 and appreciated by 28% to N42 per unit at the close of trading on May 29.

By April 30, Rabiu’s 31.27 billion shares (direct and indirect) were worth N1.01 trillion (N1,019,423,273,814.60) at N32.6 per unit, and by the end of trading on May 29, the market value of the same shares had risen to N1.31 trillion (N 1,313,367,407,982.00).

The billionaire’s worth added N293.94 billion (N 293,944,134,167.40) representing a 28% gain, and making him the highest billionaire gainer in the period under review.

Mike Adenuga
As Chairman of Conoil Nigeria Plc, Mike Adenuga directly controls 516,298,603 units of shares, as well as 103,259,720 units of shares controlled through Conpetro Limited, making for about 74.4% of Conoil’s issued share capital.

Conoil’s stock prices closed at N17.4 on April 30, putting the value of Adenuga’s indirect shares at N1.79 billion (N1,796,719,128), and his direct shares at N8.9 billion (N8,983,595,692.2), totalling to N10.78 billion.

Conoil gained 20.7% in May, and ended at N21 per unit share at the end of trading on May 29.

With this, the total shares were worth N13 billion; direct – N10,842,270,663 and indirect – N 2,168,454,120.

After losing N371 million in the preceding 12 weeks, it must have been refreshing to gain some N2.23 billion in four weeks.

Austin Avuru
However, the month of May was not profitable for the co-founder of Seplat, Austin Avuru, who indirectly owns about 58,970,463 indirect shares in the oil and gas company.

A stock price of N494.4 as at April 30 showed that these stocks were worth N29.15 billion (N29,154,996,907.2).

At the share price of N476.4 on May 29, Austin Avuru’s shares were worth N28,093,528,573.20.

He lost another N1.06 billion, after an earlier loss of N6.5 billion between February to April.

In all, Seplat stocks have fallen some 28% from January till May 29. Sad loss for Avuru.

Summary
Billionaire
Gain (N’billions)
% gains
Aliko Dangote
134.7
6.74%
Tony Elumelu
1.38
9.9%
Jim Ovia
13.15
18.2%
Herbert Wigwe
0.69
7.6%
Austin Avuru
-1.06
-3.6%
Mike Adenuga
2.23
20.7%
Abdulsamad Rabiu
293.94
28%
Note: The stock figures, and prices used in the analysis above was sourced from the Nigerian Stock Exchange (NSE) website.

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