My Stock Holdings


July 31, 2007 @ 1.40p.m – Written by January

Recently, I’ve been conducting an audit on my stock portfolio to assess the health of my investments. I usually do this every month because it helps me to stay focused on my goals for purchasing these stocks in the first place. Sometimes, it may be short or medium term. My individual stock holding is twelve. About three months ago, I had ten stocks in my portfolio. I only have this minimum of stock holdings because I believe in a gradual build up rather than having 1000units here and there of different stocks. So, my stock holdings range from First Bank, Union Bank, GTB and Intercontinental Bank to Lasaco Assurance.

I bought Lasaco Assurance as a result of my stockbroker’s advice. He stated that by 2008, the cheapest stock that will sell below N20 would only be within the Insurance sector while the cheapest stock in the banking sector will sell at N20 and above. So based on his advise, I reviewed my stock holdings and came to the conclusion that it would be too early to sell right now. If you’re considering cheap stocks to buy, I would suggest Oceanic and Union Bank respectively. I checked out their earning per share from the third quarter results released recently and it was as follows;

 

S/No.

Securities

Quarter

EPS

P/E Ratio

1.

Oceanic Bank

3rd

1.15

25.74

2.

First Bank

3rd

1.43

28.25

3.

Union Bank

3rd

1.14

35.97

4.

Access Bank

3rd

0.46

42.00

5

Zenith Bank

3rd

1.64

38.41

6.

Fidelity Bank

3rd

0.16

75.75

7.

Bank PHB

3rd

0.70

43.14

8.

Diamond Bank

3rd

0.61

32.80

 Let’s backtrack a bit. If you’re a bit confused as to what EPS means. I’ll try and explain it. For instance, in the table above, Oceanic Bank’s EPS for the third quarter is N1.15k-for a lay investor, it simply means that every 50k unit of share you have in Oceanic Bank brings in an income of N1.15k. If you take a glance at the table above, you’ll notice other relatively cheap stocks such as First Bank and Zenith Bank. I intend to buy additional shares to my current holdings in First Bank and UBN. I would also be purchasing Oceanic Bank and Access Bank. To meet this target, I will be saving a minimum amount of $1,000 every month till December. I will also be taking advantage of the Share Loan Scheme offer from UBA’s banking platform (read my article on Borrowing for the capital market). I usually wait until December because bank stocks are usually cheaper due to the fact that most of these financial institutions have released their year-end financial results. The result for Union Bank, UBA and Zenith are being awaited at the floor of the NSE.

I usually use EPS and P/E ratio to determine stocks I’ll be investing in. For instance, Access Bank’s EPS for the 3rd quarter is 0.46 and it’s P/E ratio is 42.00. To determine if Access Bank’s share is cheap, I usually go to other sectors with a similar EPS to compare. What I found is stated below:

 

S/No.

Securities

Quarter

EPS

P/E Ratio

1.

PZ Industries

2nd

0.46

54.63

 Comparing Access and PZ Industries, the EPS for PZ Industries is much higher than Access Bank, which makes PZ an expensive buy compared to Access. This is what I do on a monthly basis to identify cheap stocks I can invest in.

 

2 thoughts on “My Stock Holdings

  1. January says:

    Hello Michael,

    I usually do not make it a habit to give names of my stockbrokers cos I usually advise prospective investors to conduct a proper research on stockbroking house before berthing their funds with them. However, I can recommend two of the stockbroking house I use:

    Shalom Securities and Investment Ltd. located at Investment House, Marina

    Cashcraft Securities located at Ikoyi. Hope this answers your question

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