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Berkshire Hathaway’s Top 3 Stocks Report up to 77% Gains YTD

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Top 3 Stocks Picked by Berkshire Hathaway up to 77% YTD

According to the research data analyzed and published by Stock Apps, RH is the best-performing stock on the Berkshire Hathaway portfolio given that it has increased by 77.69% year-to-date (YTD). Previously known as Restoration Hardware, RH has gained 116.27% in the trailing one-year period as of October 6, 2020.

The luxury furniture chain’s Q2 2020 results beat analysts’ estimates, raking in $709.3 billion in revenue and $3.71 earnings per share (EPS). According to Thomson Reuters, the expectation was $707.14 million in revenue and $3.41 EPS.

Amazon Gains 71.60% YTD as Apple Soars by 56.83%

RH is planning to launch in Europe in the summer of 2021. According to Cowen & Co. analysts, the firm’s revenue is expected to reach $160 million in the UK in the first year of its launch. By the second year, the estimate is expected to grow to $450 million.

On the other hand, Amazon was the Berkshire Hathaway portfolio’s second best performer, with a YTD growth of 71.60%. Over the trailing one-year period, it surged by 84.64%. In Q2 2020, Amazon’s revenue surged 40% to $88.9 billion year-on-year (YoY). Its net income doubled to $5.2 billion while EPS rose from $5.22 to $10.30. Analysts had estimated $81.53 in revenue and $1.46 in EPS.

Apple was the third top-performer on the portfolio, with a YTD gain of 56.83% as of October 6, 2020. It had grown by 107.66% over the trailing one-year period. During its fiscal Q3, Apple’s revenue grew by 11% to $59.7 billion. Analysts had projected a 2% drop to $52.6 billion.

Berkshire Hathaway has underperformed the S&P 500 in 2020. It dropped by 2% in Q2 2020, compared to the latter’s 20% rally. Its YTD return was -5.8% against the S&P 500’s 4.97%. Part of the reason for this is its bank-heavy portfolio. Of its top 10 stocks, banks have a 32.5% share. Bank of America alone holds an 11% share, and according to Marketwatch, it is down by 30.10% YTD.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Nigerian Stock Exchange

Nigerian Stock Investors Lose N595 Billion Last Week

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The Nigerian Exchange Limited (NGX) sustained its downward trend last week as investors continue to sell their holdings and hold off for the remaining days of the year to reassess global uncertainty amid Omicron concerns.

Investors traded a total of 1.278 billion shares worth N17.340 billion in 21,052 deals last week, in contrast to a total of 3.435 billion shares valued at N30.915 billion that exchanged hands in 21,109 transactions in the previous week.

During the week, the Financial Services Industry led the activity chart with 984.543 million shares valued at N10.247 billion traded in 11,029 deals. Therefore, contributing 77.01 percent and 59.09 percent to the total equity turnover volume and value respectively.

Consumer Goods Industry followed with 78.724 million shares worth N2.328 billion in 3,137 deals. In third place was The Conglomerates Industry, with a turnover of 48.730 million shares worth N69.840 million in 647 deals.

FBN Holdings Plc, Guaranty Trust Holding Company Plc and Access Bank Plc were the three most traded equities, accounting for 470.731 million shares worth N6.571 billion in 3,887 deals. The three contributed a combined 36.82 percent and 37.90 percent to the total equity turnover volume and value, respectively.

The market value of all listed equities declined by 2.63 percent or N595 billion from N22.598 trillion recorded in the previous week to N22.003 trillion last week. While the NGX All-Share Index depreciated by 2.63 percent 0r 1,140.38 index points to 42,167.91 index points, down from 43,308.29 index points.

Similarly, all other indices finished lower with the exception of NGX Insurance index which appreciated by 2.97 percent, while the NGX ASeM, NGX Growth and NGX Sovereign Bond Indices closed flat.

Eighteen equities appreciated in price during the week, lower than Twenty-nine equities in the previous week. Forty-nine equities depreciated in price, higher than Thirty-six equities in the previous week, while eighty-nine equities remained unchanged lower than ninety-one equities recorded in the previous week. See the top gainers and losers below.

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Dividends

Dangote Cement, MTN lead Top Paying Dividend Companies of the Year

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In total, Nigerian companies paid about N989 billion as dividends in the first 9 months of the year. Dangote Cement was responsible for N272 billion of that amount, with MTN paying N212.7 billion.

The N989 billion paid in dividends showed a 27% increase from the same period in 2020. A record of dividends paid by Nigerian companies who have been publicly quoted is maintained by Nairalytics, with the companies including 30 of some of the most capitalized companies on the stock exchange who had paid dividends in 2020 and the current year.

Some companies pay dividends from their full-year profits while others pay twice in the year, first out of their full-year profits and secondly from their half-year profits. Some dividends are also paid out of retained earnings, in the event where companies do not publicly declare their profits.

The data collected for the companies showed that Dangote Cement and MTN were the leading dividend payers in the year, with the companies paying N272 billion and N212.7 billion respectively. Dangote Cement shareholders did not record any significant increase in their dividend payments, while MTN shareholders saw a 23% increase in dividend payments. No other companies paid up to N100 billion in dividends during the year.

Zenith Bank paid N94.2 billion in dividends, coming in as the third highest paying company during the year. GTCO and BUA Cement rounded up the top five, paying N79.5 billion and N70 billion in dividends respectively.

Stanbic IBTC paid N54 billion in dividends to come in as sixth, while Access Bank and Nestle paid N30.2 billion and N27.5 billion respectively, making seventh and eighth. Lafarge and Seplat rounded up the top 10 dividend payers, paying N24.7 billion and N23.1 billion respectively.

In total, the top ten companies paid a combined N888.1 billion in dividends.

A growth in dividend payment, especially in a year heavily hit by the coronavirus pandemic shows resilience in the financials of some of Nigeria’s largest companies.

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Stock Market

Jumia Stock Plunges 41.22 Percent on 91 Percent Jump in Operating Loss

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In the last one month, the price of Jumia’s stock has dropped by 41.22 percent on growing uncertainty surrounding the future of Africa’s leading eCommerce company shortly after the release of its third-quarter report in November 2021.

The price of Jumia stock dropped by $7.89 or 41.22 percent in the past month to $11.25, suggesting a broad-based selloff amid weak investors’ confidence in a stock that rose to $65.51 per share on Wednesday 10 February 2020 when global investors thought it would replicate the performance of the likes of Amazon and other eCommerce companies that thrived on COVID-19.

This is in spite of the company growing orders by 28 percent to an all-time high of 8.5 million in the third quarter. Even active consumers and Gross Merchandise Volume (GMV) rose 8 percent year-on-year each to 7.3 million and $238 million, respectively.

Still, global investors are not buying into the numbers. In fact, Luke Holbrook, a Morgan Stanley equity research analyst, lowered the bank’s recommendation for Jumia’s stock to underweight from neutral, according to a report by The Motley Fool. Holbrook then advised shareholders to sell their shares at $11 and move on. Indicating he does not have confidence in the company going forward.

Stifel Nicolaus, the only analyst that seems to be positive on Jumia, suggested ‘hold’ with a profit target of $18. Meaning, he is also not sticking his neck out for the once flying stock to hit $65, its COVID-19 peak.

Here is Why Investors Are Abandoning Jumia Stock

Jumia sales and advertising expenses jumped by a shocking 228 percent to $24 million year-on-year but active consumers and GMV only grew by 8.1 percent each. While the 28 percent increase in orders was because the company decided to sell more of everyday consumer items as opposed to its usual higher-value items like electronics. As of the third quarter, the average volume of Jumia sales was $28, down from $41.50 in 2019.

Also, Jumia customers are not returning to the website as much as Amazon and other global eCommerce platforms’ customers. Indicating that customers in Nigeria and other Jumia’s operating nations in Africa are not buying from the website as expected.

Chris Lau, a contributing author at InvestorPlace, put it best, “Jumia will have to spend more on its operations going forward. It needs to bring the right products to its customers. To do so, it must work with its suppliers and sellers. and add international brands to its marketplace, increasing its costs.”

And finally, Jumia operating loss increased by 91.4 percent to $64 million.

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