Buying Shares

[joyagba]

Is it advicable to buy shares of a company even when there is no public offer of such company's shares? that is buying from the stock market through your broker?. If it is advicable is there any way of getting the financial report of such company to analize the EPS and other parameters to confirm whether you are having a good buy or not. Assumming there is no access to their annual report from an existing share holder.

Please i need your response.

[Isa Tasiu Isyaka]

I really enjoy your write up in this our educative forum full of success minded peoples thanks untill we met again


yours
Isa T.I.

[c kenneths]

we that have a lot of investing experience prefare to invest with stockbrokers instead of buying public offers. This is because of the delays associated with certificate processing and the relative amount of time needed to verify certificates even when you eventually get it.
If I buy from a stockbroker, I can sell and buy again, thereby making double profits before the people that bought public offers even get their certificates.
Can you beat that?:

[Naija4ward]

Joyagba, getting the annual reports is a major headache. You can get some from the Registrar of companies you wish to invest. You can also get some from www.AFRICANFINANCIALMARKETS.COM if you subscribe.

The timely advice of kenneth is also good. I was caught in the banking consolidation and my little investment of N250k in Marina International bank IPO is still a struggle to sell because Access Bank is not willing to verify certificate they issued even after their socalled reconstruction.

If you have two or three years patience, then you can try IPO, otherswise buy direct from stock broker. Remember some alternative names for IPOs =
ITS PROBABLY OVERPRICED, IMAGINARY PROFITS ONLY, INSIDERS' PRIVATE OPPORTUNITY OR IDIOTIC, PREPOSTEROUS, AND OUTRAGEOUS.

Cheers

[Iceman]

Joyagba, It all depends on what type of investment your getting into. For me speed is essential and i work toward doubling whatever i invest in and selling of immediately. IPO's don't give you that flexibility. The probably wont give you your certificate till a year o more later. Moreover they tend to make everything look like a beatiful bride. Buying from the floor allows you go with the flow and see who's buying what and make proper investment strategic.

[SKO]

This is a matter of strategy. If you are convinced about the outlook of a stock post-IPO, then when you receive the share certificate (which I understand is rather prompt by our standards in Nigeria) is manageable. My father subscribed to and was alloted shares from Intercontinental's offer a few years ago. As at last Friday, the stock trades for almost 400% of the offer price. He just kepting on cashing his dividends. By the way, bonus shares were awarded too in the same period.

His strategy is simple - looking for growth stocks over time. I assume that there would be other individuals who have moved positions on the same Intercontinental stock int the same time period with considerable stories to tell.

In summary, your strategy determines the fit of an IPO or post-IPO purchase in your portfolio. A careful research of the stock in question and outlook could never be discounted in your analysis.

[Stockbear]

I am a newbie to shares. My introduction to the stock market was with the Zenith and union bank shares. All I knew is what I was told, these were good buys going for a discount. I have since added other stocks to my portfolio, but I am learning fast. IPO's are good when they are new i.e Dangote sugar.

Anything else, I would strongly suggest, that is if you know what you are doing, is to buy from the secondary market through stockbrokers. The advantages have been highlighted by C Kenneths and Naija4ward. 1 year later I hadn't received my share certs. Imagine post-IPO, prices initially go up but then start to fall way past your entry point of the IPO how do you sell what you don't have?

[c kenneths]

This doesnt work most of the times, but I am still studying it. I noticed that prices of stocks that did IPO's seem to drop near to the IPO price soon after the end of the IPO. It happened in the intercontinental offer where people bought @ 13.50 and two weeks after the IPO, the price was still 13.60.
Also, I should have bought diamond bank last year when it was selling at 4.86 at the secondary market, but Imade the mistake of buying in their IPO two years back at 6.80.

[Stockbear]

I am inclined to agree with your observation. My inlaw has observed same. He bought the IPO only to find that he would have been better off post IPO when prices went even lower than the IPO.

More so, many have pointed out in various threads that IPO buys don't usually qualify for bonuses and dividends. So why not wait post-IPO, buy from secondary market and have all the priviledges of those considered shareholders?