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Food/Beverages & Tobacco stocks 7UP, Cadbury, Flour Mills, Nestle, Nigeria Bottling Company (NBC), Union Dicon Salt etc

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  #401 (permalink)  
Old 20th February 2013, 07:09 PM
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Default Re: Nestle

Quote:
Originally Posted by afolabi27 View Post
I can only wish them good luck. When Nestle was at #600, I even thought the second zero was a typo error.
Felt like that when it was N80! Historically it always trade at a premium to others. Same with Total until the wahala in the downstream sector started.

Nestle is hardly the stock that ignorant investors will buy.
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  #402 (permalink)  
Old 20th February 2013, 07:14 PM
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Default Re: Nestle

Quote:
Originally Posted by wanaj0 View Post
Over valued is a relative term. Nestle will always be sold at a premium because of the foreign ownership that reduces the available float, the excellent management, good corporate governance and the growth story.

Is it worth 1k? I don't know. Note however that the value is tied to the future cash flow. If you look at the investment they have made of recent, the expanding middle class, you will agree that Nestle is just entering into a growth phase.

Someone mentioned NBL, the issues are different. Brewery sector is facing competition that is increasing everyday. There is over capacity which with competition is not allowing them to increase prices. Add to that increase cost of input leading to reduction in margins.

You have more retail investors in NBL than in Nestle. Hence Nestle is less susceptible to speculators like Ololo!

Prices cannot continue to increase forever. However, i don't see Nestle losing 50% of current value.

There is a lot of premium due to goodwill that it is enjoying.
Make them price the growth story well...there was a rumour that they were going to do a massive bonus....it helped fuel the rally. Nestle is overpriced. it's not worth N1,000...the only set of peeps who would like it are those who like Berkshire's shares...I see no difference in the two...

And who told you it can't lose 50%??? Don't bet against the market oh...make them uncover one shenanigan first
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Last edited by horlads; 20th February 2013 at 07:16 PM.
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  #403 (permalink)  
Old 20th February 2013, 07:31 PM
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Default Re: Nestle

Quote:
Originally Posted by horlads View Post
Make them price the growth story well...there was a rumour that they were going to do a massive bonus....it helped fuel the rally. Nestle is overpriced. it's not worth N1,000...the only set of peeps who would like it are those who like Berkshire's shares...I see no difference in the two...

And who told you it can't lose 50%??? Don't bet against the market oh...make them uncover one shenanigan first
I am sure you know the type of people buying Berkshires shares.

For Nestle to lose 50%, the market must have lost 100%. Check out what happened during the market meltdown.In

The market will determine the RIGHT price or value over time!
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  #404 (permalink)  
Old 20th February 2013, 07:51 PM
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Default Re: Nestle

Quote:
Originally Posted by wanaj0 View Post
Over valued is a relative term. Nestle will always be sold at a premium because of the foreign ownership that reduces the available float, the excellent management, good corporate governance and the growth story.

Is it worth 1k? I don't know. Note however that the value is tied to the future cash flow. If you look at the investment they have made of recent, the expanding middle class, you will agree that Nestle is just entering into a growth phase.

Someone mentioned NBL, the issues are different. Brewery sector is facing competition that is increasing everyday. There is over capacity which with competition is not allowing them to increase prices. Add to that increase cost of input leading to reduction in margins.

You have more retail investors in NBL than in Nestle. Hence Nestle is less susceptible to speculators like Ololo!

Prices cannot continue to increase forever. However, i don't see Nestle losing 50% of current value.

There is a lot of premium due to goodwill that it is enjoying.
Well said Sir Wanaj0. This one don go! It will take a "horse meat" scandal ala "Killer Ndomie" style to crash this one by 50%.
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  #405 (permalink)  
Old 20th February 2013, 08:11 PM
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Default Re: Nestle

NESTLE declares N18.50 kobo dividend in '12 Audited result,(SP:N981.00k) - Proshare
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  #406 (permalink)  
Old 20th February 2013, 08:29 PM
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Default Re: Nestle

Quote:
Originally Posted by Salida View Post
Well said Sir Wanaj0. This one don go! It will take a "horse meat" scandal ala "Killer Ndomie" style to crash this one by 50%.
This why it is advised that one stays far away from the market, yes nestle has an ROE of 60% BUT THE P.E IS CLOSE TO 50!!!!!! And you guys think its not going to crash???

Just go back to the posts that were made here in 2007 and see the similarities!
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  #407 (permalink)  
Old 20th February 2013, 11:44 PM
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Default Re: Nestle

Quote:
Originally Posted by emmanuel ewumi View Post
Prices of Stocks na water, they must always find their level. No matter how you try to manage or sustain the price of a stock.

Some management staff with Nestle portfolio of about 1 billion Naira, going home with a dividend of about N15 million Naira, Will want to sell and may be invest in other stocks that can give a dividend of between 50 million to 80 million Naira.

The price of Nestle may not come down from N1000, but it may be stagnant.
I think it was euphoria that made the price of nestle to rise so much. In actual sense I don't see any rational. To say that Nestle is over price is under statement. Nestle is hyper over priced. The good management, regular good returns and cash flow does not mean it should be over priced. I make example with a first class material that works in a coy. The chap may have the capacity to be the CEO of the company, that does not mean we start paying him like the CEO until he becomes one and at each stage as he get promoted his pay rises. A lot of thing have been factored into nestle at this stage which I am sure market will correct with time.
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  #408 (permalink)  
Old 21st February 2013, 12:51 AM
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Default Re: Nestle

N18:50k is a very poor dividend for a stock trading @ N1,000.
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  #409 (permalink)  
Old 21st February 2013, 02:12 AM
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Default Re: Nestle

Quote:
Originally Posted by nosa2 View Post
This why it is advised that one stays far away from the market, yes nestle has an ROE of 60% BUT THE P.E IS CLOSE TO 50!!!!!! And you guys think its not going to crash???

Just go back to the posts that were made here in 2007 and see the similarities!
So what PE should Nestle be?

Go back to 2008 and see by how much the price of Nestle crashed and compare it to the market.

Nestle is ALWAYS over priced. That's why most people never summoned the courage to buy. However the crash we expect never arrive.

With the PE of 50, you will expect the price to crash to below N200 for it to be fairly valued like other stocks on the exchange. Let us see WHEN Nestle will fall below N200.
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  #410 (permalink)  
Old 21st February 2013, 04:07 AM
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Default Re: Nestle

Quote:
Originally Posted by nosa2 View Post
This why it is advised that one stays far away from the market, yes nestle has an ROE of 60% BUT THE P.E IS CLOSE TO 50!!!!!! And you guys think its not going to crash???

Just go back to the posts that were made here in 2007 and see the similarities!
Stay away from the market by selling your holdings in NESTLE?
All this one wey una dey talk about crash, it is a normal phenomenon in stock markets. The shareholders of this company know its value and are ready to increase their holdings when the crash surfaces as long as the valuation is fair.
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  #411 (permalink)  
Old 21st February 2013, 07:29 AM
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Default Re: Nestle

Quote:
Originally Posted by Ozone View Post
N18:50k is a very poor dividend for a stock trading @ N1,000.
TOTAL shares is trading around 38 euros(N8,018) presently assuming that 1 euro is N211. Based on 2012 YE total dividend of 2.34 euros(N493.74), the dividend yield is 6.15%!

Nestle is trading at N981 presently. Based on the 2012 YE total dividend of N20(i.e N1.50[interim div paid 24/12/2012] + N18.50[final]), the dividend yield is 2.03%!

Is this appreciation in Nestle real?
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  #412 (permalink)  
Old 21st February 2013, 07:36 AM
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Default Re: Nestle

Quote:
Originally Posted by Salida View Post
Stay away from the market by selling your holdings in NESTLE?
All this one wey una dey talk about crash, it is a normal phenomenon in stock markets. The shareholders of this company know its value and are ready to increase their holdings when the crash surfaces as long as the valuation is fair.
Those that will be smiling are only those whose yield on cost are close to 50%.

Where would someone buying now at N1,000 get his rewards from? Will he be looking to double in price or will be hoping to get dividend yield?

Even the stock don dey more expensive than the big sachet MILO(N650 only) on the supermarket shelf!!!
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  #413 (permalink)  
Old 21st February 2013, 07:48 AM
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Default Re: Nestle

Quote:
Originally Posted by Oracle View Post
TOTAL shares is trading around 38 euros(N8,018) presently assuming that 1 euro is N211. Based on 2012 YE total dividend of 2.34 euros(N493.74), the dividend yield is 6.15%!

Nestle is trading at N981 presently. Based on the 2012 YE total dividend of N20(i.e N1.50[interim div paid 24/12/2012] + N18.50[final]), the dividend yield is 2.03%!

Is this appreciation in Nestle real?

Ask yourself by how much Total will be able to grow the profit going forward? What are the risks that total got to manage in that sector? What are the potential growth opportunities?

Nestle is not meant for retail investors or speculators. It is meant for institutional and sophisticated investors. They don't trade that often. They all are banking on the growth opportunities. Let's see by how much NESTLE will grow profits and turnover in the coming years.

Would like to see it crash so that I can buy but I doubt it will lose more than the market!

NB: I DO NOT OWN ANY NESTLE SHARE AND NOT THINKING OF BUYING!
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  #414 (permalink)  
Old 21st February 2013, 08:00 AM
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Default Re: Nestle

Quote:
Originally Posted by wanaj0 View Post
Ask yourself by how much Total will be able to grow the profit going forward? What are the risks that total got to manage in that sector? What are the potential growth opportunities?

Nestle is not meant for retail investors or speculators. It is meant for institutional and sophisticated investors. They don't trade that often. They all are banking on the growth opportunities. Let's see by how much NESTLE will grow profits and turnover in the coming years.

Would like to see it crash so that I can buy but I doubt it will lose more than the market!

NB: I DO NOT OWN ANY NESTLE SHARE AND NOT THINKING OF BUYING!
My brother, rather than buy 1 Nestle share, I will buy one big sachet of MILO(N650), 1 pack of Saint Louis sugar(N200) and buy 1 tin of liquid peak milk (N100). I will even be left with N50 to buy pure water. I will enjoy the value for my N1,000 more and there is limited downside!
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  #415 (permalink)  
Old 21st February 2013, 08:53 AM
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Default Re: Nestle

Quote:
Originally Posted by Oracle View Post
My brother, rather than buy 1 Nestle share, I will buy one big sachet of MILO(N650), 1 pack of Saint Louis sugar(N200) and buy 1 tin of liquid peak milk (N100). I will even be left with N50 to buy pure water. I will enjoy the value for my N1,000 more and there is limited downside!
Hmmmmmm. Depending on how quick your digestive system works, your money will become waste in a matter of hours.

Actually the more Milo people like you can buy the better for Nestle shareholders.
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  #416 (permalink)  
Old 21st February 2013, 09:04 AM
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Default Re: Nestle

Quote:
Originally Posted by Oracle View Post
My brother, rather than buy 1 Nestle share, I will buy one big sachet of MILO(N650), 1 pack of Saint Louis sugar(N200) and buy 1 tin of liquid peak milk (N100). I will even be left with N50 to buy pure water. I will enjoy the value for my N1,000 more and there is limited downside!
Quote:
Originally Posted by wanaj0 View Post
Hmmmmmm. Depending on how quick your digestive system works, your money will become waste in a matter of hours.

Actually the more Milo people like you can buy the better for Nestle shareholders.
Oga Oracle... u dey try to compare person wey chop him future now and person wey dey invest for in future....ok o! afterall na the one wey person chop na im he dey carry waka!

For those waiting for Nestle to fall....just keep waiting! no wahala..I have been buying Nestle for the past 5 years and i will continue to buy it every January. Like I have said in all my revious post, this stock has continued to beat the NSE index and any money market yield in those 5 yrs!

The same song of being over valued has been talked in this Nestle share all those 5 years and still it have done better than the so called NASCONs.. within this said period!
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  #417 (permalink)  
Old 21st February 2013, 09:22 AM
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Default Re: Nestle

Quote:
Originally Posted by nosa2 View Post
This why it is advised that one stays far away from the market, yes nestle has an ROE of 60% BUT THE P.E IS CLOSE TO 50!!!!!! And you guys think its not going to crash???

Just go back to the posts that were made here in 2007 and see the similarities!
Who do you think is buying Nestle? Nigerians? You need to get into the heads of those buying the stock. You are not seeing what they are seeing but they can see what you see; but they don't care about that. Trust me.
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  #418 (permalink)  
Old 21st February 2013, 09:29 AM
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Default Re: Nestle

Quote:
Originally Posted by Ozone View Post
N18:50k is a very poor dividend for a stock trading @ N1,000.
Ok. Dividend yield is 1.85%. Great.

Check out the dividend yields of the stock markets in South Africa, Russia, India, US, Germany... then juxtapose what you get with the yields on bonds in the same markets. Factor in shareholder structure of Nestle and check out their purchase history of the stock.

I am sorry to disappoint you but Nestle is going to N1,200. I am sure when I mentioned it sometime last year that this stock was going to hit N1,000 (when it was selling around N450 - N500), many on this forum thought I was joking.

Disclosure 1: I knew when Nestle bought back its shares on the NSE.

Disclosure 2: I don't hold the stock because it does not fit into my strategy and I have no intention of buying.
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  #419 (permalink)  
Old 21st February 2013, 09:31 AM
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Default Re: Nestle

Quote:
Originally Posted by Oracle View Post
TOTAL shares is trading around 38 euros(N8,018) presently assuming that 1 euro is N211. Based on 2012 YE total dividend of 2.34 euros(N493.74), the dividend yield is 6.15%!

Nestle is trading at N981 presently. Based on the 2012 YE total dividend of N20(i.e N1.50[interim div paid 24/12/2012] + N18.50[final]), the dividend yield is 2.03%!

Is this appreciation in Nestle real?
You are measuring the metrics of an oil company (with all its risks) against a food company (with all the demand for its products).

Check out the Beta of TOTAL and compare it with that of Nestle, then read up what Market Beta means for a stock.
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Old 21st February 2013, 09:33 AM
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Default Re: Nestle

Quote:
Originally Posted by Oracle View Post
My brother, rather than buy 1 Nestle share, I will buy one big sachet of MILO(N650), 1 pack of Saint Louis sugar(N200) and buy 1 tin of liquid peak milk (N100). I will even be left with N50 to buy pure water. I will enjoy the value for my N1,000 more and there is limited downside!
In 2015, we will revisit this post and determine who made a better return on investment...
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