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Market Will Reward Investors in the Long Run
- By Business World
- Published February 22nd, 2010
- Smartmoney
- Unrated
WE are now in the 7th week of the year 2010, we can say the market is getting it right. The All Share Index gained more than 10 per cent s which confirmed the confidence we have that in this year there is likelihood of recovery and the journey so far has proved that the market is all-out for recovery.
The most interesting thing is that the market rewards according to performance of the company, we can says precisely that this time around the market is in the right direction.
Some stocks are doing well with their performance, some come with their projections and the market treats them accordingly. When you look at the most popular sector i.e. banking sector, today the highest stock there is Guaranty Trust Bank. We have seen their result and so far so good with the projection nobody is in doubt of what GTB is doing.
Next to GTB is Zenith bank in terms of price, we have seen their 9 months result and projection and we have no doubt in that. The same thing with First Bank which is in the line with what it is doing, also other stocks like First City monument bank, Diamond Bank and Access Bank are in right direction.
In the banking sector, everybody knows what is going on now, when you look at the financials of these banks, you will see the way the market is pricing them. The market prices them according to their respective performance and we believe the way the market prices them, the market will continue to price them right. With what is going on right now I believe that most of them will recover substantial part of their losses in the market.
The next sector is conglomerate, infact apart from been resilient, this is the sector that investors must pay attention to now.
Today the leading stock in that sector is UACN followed by PZ and Unilever. These are the companies that always keep making profit, declaring dividend and even paying bonus. They have never disappointed their investors even at the time of the bearish run in the market, they paid good dividends and today investors are still looking for these stocks, investors are buying them and hold because they believe the best is yet to come from these companies.
Today, the prices of these companies are on the run to recover what they have lost to the meltdown.
Another sector is food and beverages, this is a sector that really surprises investors, today this is the first time that when other sectors are losing, this sector kept on gaining every week, even in the last two weeks this sector was in gaining position despite that the market lost it position to bears. There is no doubt it will continue gaining.
There is no other reason than the result released by these companies, for instance Flour Mills of Nigeria made a provision of over N2.3 billion for the year ended 2009 due to loses, today, the story of this company has changed, it came with fantastic result, made profit and projected that by the end of March 2010 it is likely to make N11 to N12 billion profit. With their current low share price, there is no doubt this company will make N27 earning per share with the current price of N40, the market will keep on rewarding the investors of this company from the day it released the result up to date.
We have no doubt that this stock is justifiable, take any other technique of evaluating the stocks you will see that the investors have never make any mistake for investing in Flour Mills of Nigeria.
The same thing with Dangote Flour Mills, the companies that was listed in 2008 it couldn’t pay either dividend or bonus for that year only to come and promised to pay better reward for efficient investors.
Of course the price of this stock went as low as N4.70 but today it is almost N13 and we have no doubt with earning of N2 and above this stock will definitely more better than the current price, even though the current price is below offer price but we have no doubt it proved beyond reasonable that for any serious investors must has this kind of stock is his/her portfolio.
We have no doubt that the trend in the food and beverages sector is in order, Northern Nigeria Flour Mills is not left out Nigerian Bottling Company is coming up, even the Cadbury we hope that with the fund injected into it year 2010 will be an interesting year for the shareholders of this company.
My advice to the investors is that this is the sector to look for, as much as the index is going these sectors will definitely perform far and better than what the All Share Index takes.
Our investors should understand that the market is getting it right, those stocks that performed well have priced well; those that decides to go down are going down.
The most interesting thing is that the market rewards according to performance of the company, we can says precisely that this time around the market is in the right direction.
Some stocks are doing well with their performance, some come with their projections and the market treats them accordingly. When you look at the most popular sector i.e. banking sector, today the highest stock there is Guaranty Trust Bank. We have seen their result and so far so good with the projection nobody is in doubt of what GTB is doing.
Next to GTB is Zenith bank in terms of price, we have seen their 9 months result and projection and we have no doubt in that. The same thing with First Bank which is in the line with what it is doing, also other stocks like First City monument bank, Diamond Bank and Access Bank are in right direction.
In the banking sector, everybody knows what is going on now, when you look at the financials of these banks, you will see the way the market is pricing them. The market prices them according to their respective performance and we believe the way the market prices them, the market will continue to price them right. With what is going on right now I believe that most of them will recover substantial part of their losses in the market.
The next sector is conglomerate, infact apart from been resilient, this is the sector that investors must pay attention to now.
Today the leading stock in that sector is UACN followed by PZ and Unilever. These are the companies that always keep making profit, declaring dividend and even paying bonus. They have never disappointed their investors even at the time of the bearish run in the market, they paid good dividends and today investors are still looking for these stocks, investors are buying them and hold because they believe the best is yet to come from these companies.
Today, the prices of these companies are on the run to recover what they have lost to the meltdown.
Another sector is food and beverages, this is a sector that really surprises investors, today this is the first time that when other sectors are losing, this sector kept on gaining every week, even in the last two weeks this sector was in gaining position despite that the market lost it position to bears. There is no doubt it will continue gaining.
There is no other reason than the result released by these companies, for instance Flour Mills of Nigeria made a provision of over N2.3 billion for the year ended 2009 due to loses, today, the story of this company has changed, it came with fantastic result, made profit and projected that by the end of March 2010 it is likely to make N11 to N12 billion profit. With their current low share price, there is no doubt this company will make N27 earning per share with the current price of N40, the market will keep on rewarding the investors of this company from the day it released the result up to date.
We have no doubt that this stock is justifiable, take any other technique of evaluating the stocks you will see that the investors have never make any mistake for investing in Flour Mills of Nigeria.
The same thing with Dangote Flour Mills, the companies that was listed in 2008 it couldn’t pay either dividend or bonus for that year only to come and promised to pay better reward for efficient investors.
Of course the price of this stock went as low as N4.70 but today it is almost N13 and we have no doubt with earning of N2 and above this stock will definitely more better than the current price, even though the current price is below offer price but we have no doubt it proved beyond reasonable that for any serious investors must has this kind of stock is his/her portfolio.
We have no doubt that the trend in the food and beverages sector is in order, Northern Nigeria Flour Mills is not left out Nigerian Bottling Company is coming up, even the Cadbury we hope that with the fund injected into it year 2010 will be an interesting year for the shareholders of this company.
My advice to the investors is that this is the sector to look for, as much as the index is going these sectors will definitely perform far and better than what the All Share Index takes.
Our investors should understand that the market is getting it right, those stocks that performed well have priced well; those that decides to go down are going down.
