Best Stocks for long term investment and Long Term Profits

[00:00:00]One of the most dangerous things you can do in the stock market as an investor is to time the market. You see, people that time the market are the same people you see with a lot of cries and tears once the market makes a little retracement.

[00:00:14]But we propagate time in the market which is far better than timing the market because you cannot actually successfully time the stock market. So today we'll be talking about five stocks you can hold for long term. You see from our experience in the stock market with knowledge with experience and also with patient you can achieve your dreams in this market. This is strictly for long-term investors and those who want to be profitable in the stock market.

[00:00:43]Welcome to Clockwise. My name is Providence and it's always a tradition.

[00:00:47]I don't do it alone. I have my guest, the one I tell you every time that he sleeps on the charts. He understands the fundamentals of these businesses. Now with a resounding virtual round of applause. Welcome Mr. C. Welcome clockwise.

[00:00:59]>> Thank you very much.

[00:01:00]>> It's nice seeing you again.

[00:01:01]>> Thank you.

[00:01:02]>> Um let's just dive straight to business.

[00:01:04]Yes.

[00:01:05]>> Now is it really true that somebody can hold a particular set of stocks for a long term? Let's say forever.

[00:01:10]>> Is it possible?

[00:01:11]>> Of course. Of course. If you if you in Dangote cement >> uh you could have used this is about uh 30 years.

[00:01:20]>> You have been in the market for like 30 years.

[00:01:21]>> 30 years. And by the way, Dangote Cement, as you know, is the largest stock on the Nigerian stock exchange group. So, >> um it's it's grown so big. If you're in MTN, >> you would have been around for north of 10 years now.

[00:01:34]>> Yes.

[00:01:35]>> And you still be around for next 20 years.

[00:01:36]>> And you still around. Yes. M if you have if you have been in um the likes of Facebook bank has is the I bought my first face bank stock >> in 2005.

[00:01:53]>> Okay.

[00:01:53]>> So that's like 21 years ago.

[00:01:57]>> Yes. That's when I bought my first B stock. So you would have imagine you have been in the first B if I tell you how much I bought the shades per share.

[00:02:06]Very ridiculous. is more than more than a 100x in terms of price.

[00:02:11]>> Yeah. Yeah, it's true.

[00:02:12]>> So now you realize that you you can afford to as a matter of fact my philosophy in the in the market is I don't do people come to me and said I want to set up a portfolio. I want to set up a a a portfolio. I tell the person okay so how many are you looking at five 10 years? Are you looking at 15 years? Are you looking at 20 years 30 years but surprisingly you see a lot of Nigerians for 10? No, >> you're looking for 6 months.

[00:02:36]>> I'm looking some can I know I have something I can invest like in 6 months in one year.

[00:02:42]>> You cannot benefit from compound interest if you do that. Like Albert instinct says >> compound interest is the eighth wonder of the world.

[00:02:52]>> If you I mean I think on one of the shows on this channel we I should demonstrate it to you.

[00:02:57]>> If you invest in the in an instrument that just does 10% or 11% per year >> and leave it for 30 years. Yeah, >> start with $10,000, >> you can become a millionaire >> in 30 years.

[00:03:10]>> You can become a millionaire >> sometime because I mean if you look at even the S&P 500 for example over the past 3 years it has delivered like 20 in fact it was last year I even did 19 but it has done 20 23 in 2023 it did 24% in 2024 4 did 23%.

[00:03:30]Last year he did 19%. So even the 11% I'm talking about you can see that it's just an average over a long long period the S&P 500 has returned 11%.

[00:03:41]>> I know you're a growth investor. goods.

[00:03:43]>> I believe so much in and what that tells you you know what >> when I bought Nvidia >> Nvidia has done from that time till now Nvidia has done remember there was a stock split so Nvidia that you see $22 now it's actually $220 actually there was a stock split that happened >> so imagine buying Nvidia at $10 per share >> and it's now >> and it's now $2,20 $20. Do you know what that is? Long-term invest long-term.

[00:04:16]A lot of people miss out because they don't do invest long. When if you want if you if you are coming to me and say I want to do six months, I said go to the fixed income market.

[00:04:25]>> If you say longterm, I will tell you come let's talk about some equities you can buy. When you are in the equities market, please and please it has to be longterm. You cannot unlock value if you're not doing a long term. Longterm >> you cannot unlock value. When you leave your stock to longterm then you are going to >> you compound value over time.

[00:04:43]>> Compound value over time.

[00:04:44]>> Reinvest profit.

[00:04:46]>> You reinvest profit in dividend. Even if even let me tell even if you take out dividends you are going to make insane amount of money.

[00:04:53]>> Do you know how do you know this any bank that you're seeing at uh 100. Do you know how much any bank was trading 10 years ago? Pennies.

[00:05:03]>> They were penny stocks.

[00:05:04]>> Yes. So what you want to do is to invest and let it be allow it to ride. Don't don't babysit the market. Allow the market to do its job.

[00:05:15]>> Look for some strong names, solid names and then also invest in ETFs. So that's why I told you I have investment in equities. I have investment in ETFs.

[00:05:25]Have investment in mutual funds. I have invested all of those assets. It's just a way of diversifying. Even when I tell you I'm sitting on cash, I'm not sitting that cash is not in the bank. That cash is in some some some fixed incomes, some bonds, some treasury. No, not bonds actually, but treasuries because they're short-term liquid um instruments. So that if I an opportunity shows up in the market, I can literally sell it off and then take advantage of the opportunity.

[00:05:50]If you're in the equities market, please know that it's a long-term business.

[00:05:55]>> We cannot reemphasize this because people have to understand the market how the market works. Yes, >> the market works when with compound interest.

[00:06:03]>> So, someone asked me for example, he said, "By the way, when I'm designing portfolios for people, >> I ask questions um and the question I ask is how old are you?

[00:06:14]>> What is your goal?"

[00:06:16]>> If I'm designing a portfolio for somebody that is in their 20s, it's going to be 90% equity. M >> if I'm designing a portfolio for someone that is in his 60s, I'm going to now do 90 could that equities could drop to like 45%. M fixed income could be around 45 except there are some there are some clients that literally tell you I would suggest to you >> do you want to pass this down to your your four years sorry your descendants the next generation if you want I will still maintain equity equity I would ask you how much is your annual maintenance fee what I mean by that how much do you need to maintain I'll multiply that by three and invest that in in the in the in in the fixed income income market.

[00:07:04]>> Yes. And multiply that by three >> and invest in the fixed income market.

[00:07:08]>> Yeah.

[00:07:09]>> Then I I would have emergency I would take another 30% >> of what I've put there to emergency and then invest the rest in equities.

[00:07:19]There's a reason why I'm doing that.

[00:07:20]That equities equities there is what I believe will outlive you.

[00:07:25]>> The the fixed income structure will be for you to maintain yourself. Then the the other one is for emergencies. So you don't have to you can have something to lay your hands on. Now that is even one side. Another side is do you know that a lot of people don't know that you can actually borrow against your your your assets.

[00:07:48]>> So sometimes you can borrow against your assets and I always like especially for people that have dollar denominated assets. Why I'm saying dollar denominated assets is that currently >> you can borrow at about 3.4%.

[00:08:04]>> Peranom >> in US if you have a US a US dollar denominated assets. So a an asset back loan can come as low as 3.4%. You can imagine how how how how that is.

[00:08:18]>> Now imagine if you have a an instrument that is giving you about say even 15% 3.4% 15% take out fees. Fees is about one let's say 1.5%. Add 1.5% to 3 point call it 3.5%. That gives you about 5%.

[00:08:37]Take out 5% from 15% that's how what 10%. So you enjoy that abbit trash almost eternally. So that means you can continue to borrow.

[00:08:46]>> You can continue to borrow until that's that's what we call the buy borrow die strategy. You buy an asset an asset that appreciate an an appreciating asset.

[00:08:56]>> If you want to to fund your lifestyle, you borrow against that asset. You don't sell the asset. You borrow against it.

[00:09:02]>> And then when you die, >> there is a what we call a step up basis >> um provision that steps up the basis the cost value of that asset to the value as at the time of death.

[00:09:15]I mean I mean you can you can I mean our viewers can actually research what we call the buy borrow die strategy that's how it works so you don't have to sell your assets >> I think we'll have a particular episode where we have to talk about this in depth so that people actually understand and do the math >> yes >> we see the beauty of it the market is the stock market is a very beautiful place and um I I believe that people need to know more of what you can do as an investor in the stock market now let's move to the conversation of today okay >> now let's talk about those stocks you can actually hold forever a minimum 50 years.

[00:09:47]>> Good. So I'm going to I'm going to speak about stocks. I mean there are some names blue chip names where I think we have talked about them on this channel so much the likes of Jennis Bank the GTO you know but I'm going to look at I'm I'm going to look even beyond the tier one banks.

[00:10:02]Um so one of one name that I see is emerging >> is has been bank has done 146% >> on my money actually.

[00:10:13]>> So um in the last just in the last in the last uh year actually >> okay >> uh or even more safe but I think that that that was the figure I saw and by the way if you look at just go look at your charts this correction that we had don't suffer it at all. M >> I'm telling you go and look at the charts where the likes of Zen Bank UB and the rest assets waves falling like a crater.

[00:10:37]>> Zen Bank did not bank did not as much as BG really. So I I there's that resilience you know so for me I think women bank is not just a regional bank >> these guys have moved from being a regional bank to being a kind of a digital bank. Alert pay is as a matter of fact it was one of the one of the payment gateways. In fact the first payment gateway we considered for uh my AI startup >> you know was alert pay you know but due to few because it's a more like a bank and a payment gateway so it was easier for us to use pay because pa didn't have all the regulatory encumbrances but that that tells you for us even consider that tells you where how competitive has become. So woman bank position itself as a digital bank is to attract the the the next generation. Remember why I've been I've been rooting for GTO >> because GTO has unlocked the digital space.

[00:11:37]>> Another name that has really really unlocked that digital space is one bank.

[00:11:41]>> They have a standalone uh you know um payment gateway which is Al. And when you how do you how do you preserve yourself? How do you persevere? How do you elongate your stay here in the market? It is by attracting the next generation.

[00:11:57]>> If you look at some banks, if you look at some companies that that refuse to to to to evolve and um bring in strategies to attract the next generation. All of them are dead now.

[00:12:11]>> There are some banks that I'm not going to mention the name here, but you know them. When >> you also know, [clears throat] >> you know them. Those are banks that if as a young person if you if you say if you in fact if you if you send your call pap [laughter] if you send your if you send your if you send someone I remember a lady sent me that um a young lady sent me that an account and I was like are you banking with this bank you know it was completely unthinkable unthinkable that that that mama's bank's bank >> okay so So, so when you don't do that, you re you realize that very soon you're going to be out of country. So, so um bank is one. Then the next one is >> that has also positioned itself >> is FCNB.

[00:13:00]>> Okay, >> remember FCMBB was an exchange actually >> metam evolves into a bank >> but they have actually positioned themselves to really um take advantage >> of the new generation >> of the new generation. M >> so um I remember by the way I couldn't have said this some couple of 3 4 years ago because I remember the experience my sister had using FCNB was it was extremely horrible >> they've actually evolved >> but but they have actually evolved >> so FCNB but beyond that I like FCMB for its liquidity I've always told you that >> when you are planning longterm look at where the institutions are looking at and there's one way there's there's way you how to know way institutions are looking at look at where the liquidity is.

[00:13:45]>> Institution don't in fact institution prioritize liquidity over gains. If you tell an institutional investor that can you imagine this stock actually printed 300% last last last uh last year >> and liquidity wise you can only buy >> but I'm not sure about you hotel.

[00:14:08]So an institution would not even touch you with a people. But if you tell it okay this guy did just maybe 13 15%.

[00:14:16]>> That's the number they are used to >> but it's very liquid at any time you can enter the the trade and exit the trade they will go for that. So FCMBB another name that is very closely related to this fidelity fidelity and FCB they are very liquid in the market literally >> if you see sometime they even take turns apart from now that FSO has become one of the biggest in terms of trading volume I think FCMBB and Fidelity have actually been doing that um you know front you know kind of overtaking each other so >> FCMBB is a name uh because of that liquidity it enjoys um in special investors Apart from when they look beyond the tier one, these are some of the names that they will look after look at and remember you need institutional players >> when when institutional players are interested in the name.

[00:15:06]>> When analysts are interested in the name then research happens >> uh this these names come to the front burner and institutional investors have develop interest in those names that is what actually gets those names to persevere. So, I'm looking at um Weber Bank and Fed and FCNB as two names that you can actually put in your long-term portfolio. Besides, remember for long-term portfolios like that, we also want to sustain it with uh with with dividends. Yeah.

[00:15:38]>> Yeah. Okay. It's very important.

[00:15:39]>> Okay. So, my bank and um HCMB.

[00:15:43]>> Yes. The next place I'll go to is would be agriculture.

[00:15:47]>> Everybody eats.

[00:15:48]>> Everybody eats.

[00:15:49]>> Animals eat. Yeah, >> but guess who benefits? Who produces for this? Now, agriculture is generally tagged as a risky business.

[00:16:00]>> Um, that is why if you look at the the valuations of some of these some of the agro names on the stock exchange, it's it's it's no way compared to their peers outside there >> because these names are in a location that is traditionally considered as being risky. If you talk about if you step outside the African continent and say I want to invest in agriculture in Africa it is very do you know that it takes even the African development bank >> at a point the investment bank's investment in agriculture dropped to less than 2%. Mhm.

[00:16:32]>> He took the African Development Bank.

[00:16:34]There's this program they did uh to to promote investment in agriculture where they they risk they provide they leverage some they use their own money leverage some money to derisk investment in in in in in the agro space.

[00:16:49]>> That is where they started this nice Nigerian incentive based risk sharing system for agricultural lending.

[00:16:55]>> That is actually what even nudged it towards 5%. because agriculture is is regarded as risky on the African continent. So what does that tell you?

[00:17:04]It tells you that when people think something is risky, >> you do your numbers. And by the way, um some names have come up to to understand the risk profile of agriculture and see how they can reduce this risk. One of those names is Okumu.

[00:17:18]>> Yes. Uh Okumu has done that.

[00:17:21]>> It's the behemoth when it comes, in fact, there are two two guys when it comes to palm oil. It is oku and pres you know. So okumu is a name that you can add to your portfolio >> as far as people will by the way you know that palm oil is not just what we eat >> as many companies show up as especially pharmaceutical companies especially um cosmetic companies and all of those companies that need palm oil refined palm oil they will benefit. And by the way another thing you should know is that palm fruit is one of the only fruits that every part of it is useful.

[00:17:56]the husk, the shaft, the kennel, the oil, everything is useful. So you that that that backward integration happens a lot and you can extract so much from palm oil, you know. So Okcomu is a name that you should and by the way they have done very well. In the last call, they did very well. But I'm a guy that doesn't look at past performance because like they say past performance does not guarantee future returns. I look at what's your valuation, what are you doing, what is your earnings growth. I can I should be able to use that to to to project into the future. So Kumu is a name that I think you would want to uh to to to add to what you have.

[00:18:33]>> Then before I go to the last name, that's the the third name. Before I go to the last name, I'm going to mention a very contrarian name and I know I know I I expect a lot of comment maybe backlash in the comment section, but I'm going to spend maybe two minutes to talk about why I'm mentioning this name and that name is Wando.

[00:18:50]>> And somebody actually asked in our last just our last uh in our last video. What of >> Oh, good.

[00:18:58]Why did collapse so much? Owando collapse because of its negative balance sheet.

[00:19:05]>> So, Wando is in dated to the tune of over half a trillion naira. M >> so when you see companies that have there this there's this this textbook explanation of uh you know stock picks >> how you pick a stock and one of the things they will tell you don't go to a for a company that has a negative balance sheet >> nowando happens to be there but you should understand why that is the case remembero recently acquired was more like a downstream player strictly >> yeah But Owando recently acquired the Nigerian Agip Oil Company assets.

[00:19:45]>> Okay.

[00:19:46]>> So that actually allowed remember there when you acquire >> a new asset >> an asset like that >> you are not just acquiring the oil fields >> you acquiring liabilities you no not liability. Yeah. Apart from the oil field itself the asset you also acquired liabilities.

[00:20:04]um you acquire there are lot of work um work that needs to be done to be able to start production. There are a lot of carryover liabilities attached to that oil well that you you pick up when you're buying. So when you reflect this on a balance sheet that is why you see that the liabilities of Wando is far greater than the the asset by over half a billion have a trillion naira. What is important for you to note is what is management doing or first of all has this assets helped to boost its production and the answer is a very big yes if you look at the lasting score >> they grew production grew by over 30%.

[00:20:49]Over 30%. So that means that we can immediately see a tangible impact of the acquisition.

[00:20:58]>> So we expect if that continues year over year on year remember uh how do oil companies pay uh liabilities pay their debt? They pay from what we call their their operating cash flow and their their free cash flow. With increase in production comes if they can minimize expenditure the cost of getting the product. The increase means a larger margin higher uh larger uh free higher free cash flow and from there they can do what? Service their debt and reduce their liabilities. So why I'm bringing this name here is the trajectory >> is one that brings a glimmer of hope.

[00:21:37]And the best time to buy a product is the when it suffers the highest level of dislocation >> is selling at 38 naira. Think about it.

[00:21:46]By the way, is one of the if you if you if you count Seplat uh Aradelando >> where is Slat? 11,000.

[00:21:57]>> Where is Aradel? 1,500. Where is >> 38?

[00:22:02]after after the show I'll tell you something about >> so so >> the political part about [laughter] >> no so I I understand of course all companies are usually exposed it's one of the risk though but my point is I'm looking at from a market perspective the the huge you cannot be you cannot have a bigger negative publicity >> than having a balance sheet that is is such a hole in your balance sheet as much as 500 over 500 billion naira who whoever wanted to sell has household.

[00:22:32]Now, whoever is still holding on to Wando is convinced. He's a con. You know what? We have some people that these guys are die hard followers or fans or any kind of >> we we die here. That's kind of >> very hard.

[00:22:47]>> Do you understand? I'm not saying I I would tell you if you are building a portfolio for one even though I'm saying that there's some some glimmer of hope, I would still say because we just have it's just a recruitment acquisition. We have not had years to prove whether management is able to take advantage of this new asset they have.

[00:23:06]>> Good. So I would say you cannot do above 6%.

[00:23:12]>> Okay.

[00:23:13]>> For now >> except you are a very high risk taker.

[00:23:17]Wando for me is a high risk high reward player. If you're a risk taker you can do as much as 10 10 15%. But for me for a moderate guy maybe you can do 6%.

[00:23:27]>> 6%. What that means is that if a one moves >> what I'm saying now is true if the management >> follows through and delivers that 6% can literally increase the sharp ratio of your portfolio.

[00:23:41]>> But I mean that the reason I'm saying 6% is that if it fails >> and let's say contrast by 50%.

[00:23:48]>> 3% of your portfolio is gone.

[00:23:50]>> It's not a big deal. I mean even for h funds and even I'm working with a fund our our our maximum draw down is 5%.

[00:23:58]you know, so so but the sharp ratio >> is what I'm talking about. It can possibly you can literally boost your your your your portfolio if they do well.

[00:24:08]>> So you're managing your risk, but you also want to have exposure to something that if it works out, you can literally we are not gambling here because I'm looking at I've told you the numbers.

[00:24:17]I've told you the the projection. I've told you the possible rerating that could happen, >> you know. So that's I'm saying and I'm telling you manage >> your risk >> your risk by just exposing maximum maybe 6% into that name.

[00:24:32]>> All right. So is the number fourth name that I would mention on this list.

[00:24:37]>> And then of course the last one I would mention um uh would be a name like um MTN. [clears throat] I know we've mentioned it before.

[00:24:47]>> Yeah. Yeah.

[00:24:49]>> But I just couldn't put up this list without mentioning. I I would have been surprised actually mentioning MTN. I I I I tried to remove MTN because I wanted it to be brand new names but u MTN just kept on coming back >> because I'm trying to look at sectoral if you look at I've looked at uh banking >> I've looked at oil and gas I've looked at agriculture >> and I'm looking at telecommunication MTN MTN 91% of the geography so Nigerian geography >> is connected >> 51% market share MTN 17 trillion NRA in market capitalism capitalization >> MTN the the the earnings growth is insane triple digit MTN literally did over almost a,000% in terms of you're talking about a company that is apart from Dangote Cement >> MTN is the second largest company in Nigeria >> you know the stock market >> the stock market >> MTN has if you look at not just the growth and that same name guess what is trading at a little above 12 times forward or trailing 12 times multip 12 times earnings multip 12 times earnings multiple that is a that is such a name that you cannot afford not to have in your portfolio there are two names I would tell you you cannot you cannot avoid having in your portfolio and I'm going to be very honest dang cement and MTM I don't know how you would build that portfolio and you not >> MTM is a behemoth when it comes to the space there's AEL Africa. Yes, >> I I I have both on my portfolio.

[00:26:29]>> But if you are to come down to one name, >> the name that is most likely going to give you the highest upside >> and for me is MTN.

[00:26:37]>> The name that would give you very decent earnings in terms of dividends >> is MTN.

[00:26:46]>> So I think MTN MTN is a name that if I'm to build a a 30-year portfolio for someone, I I'll put MTN. M will be there. So you want to put that. So I've said you have to look at >> you have to look at >> you have to look at or princu first >> then contrarian name.

[00:27:08]>> Uh do your own research >> then mt >> and then MTA.

[00:27:11]>> No you know everybody have to do their own research.

[00:27:13]>> Of course you have to do everybody. You have to do your research or you speak with your financial advisor. All we actually doing is we are bringing the bare information to you for educational purposes. All right. [clears throat] right now. So you can actually do your research or you speak to your own personal financial advisor. Now if you were to before we go if you were actually allocate your resources how would you do it?

[00:27:30]>> I would of course put in 30% in MTN.

[00:27:33]>> Mhm.

[00:27:34]>> I'll put in that that leaves us with 70%.

[00:27:38]>> I'll put 15% uh in bank and um sorry 20% in bank and FCMBB. M >> that's uh 40 40 no 15 15% sorry that's 30 + 30 that will be 60%.

[00:27:54]>> I have uh uh 40% left I will divide it between uh no for I will put um >> I'll put 8% >> in in ino >> I that leaves me with 22%.

[00:28:09]>> I'll put um 22% what do we have left? So I have Okumo. I will leave I I will put maybe 20% in Okuma and leave 2% as dry powder as uh you know.

[00:28:19]>> All right. All right. Thank you very much for coming. I will keep actually putting our eyes today. I think we should actually have a live session.

[00:28:24]Yes.

[00:28:25]>> This week.

[00:28:25]>> No. Yeah. This this Friday we'll have a live session. We've uh sorry guys live session has been uh because of the >> I think we should have it this Friday >> if we don't have it before then.

[00:28:36]So when we look at the a lot of things have happened since the time we had the last live and a lot of things have happened in the market >> which we need to talk about and the bit about our life is that you can actually ask us live questions and we'll be there to actually respond to you. Yeah. Yeah. We'll be there. We just do a live analysis. We can actually do before then but there's sure there's sure the particular one we'll do on Friday but we can have another one before then. Thank you for coming.

[00:29:00]>> You're welcome.

[00:29:00]>> Thank you very much for coming. Now on that note we'll come to the end of today's episode of Clockwise. Now do not forget to like, subscribe and also put on the notification bell on this channel. Now if you want us to actually have close conversation or you want to ask us questions in real time or maybe you want to speak to our advisors now we have a telegram link on our profile. Now that link leads you to our community where you can have access to our advisors to our analysts to our researchers and ask any question maybe participate in any of our realtime information. Now you can actually use our telegram link and it will lead you to our telegram community. Thank you for joining to this point. My name is Providence and I'll see you again.