April 19, 2024

Billionaire investor Femi Otedola is reportedly acquiring shares in Dangote Cement, according to sources with knowledge of the matter.

Dangote Cement is among the SWOOT (Stocks Worth Over One Trillion) with a current market capitalization of around N7.7 trillion.

Other members of SWOOT include MTN, Airtel, Seplat, BUA Foods, BUA Cement, Zenith Bank, GTB, UBA, First Bank, Geregu Power, and recently Transcorp Hotel. Dangote Cement has the largest market capitalization.

The stock opened at N350 this week and has so far gained 29%, as demand continues to rise. However, the stock gained 3.8% on Thursday with about 1.8 million shares traded. The company has approximately 16.8 billion shares outstanding. 

This year alone, the stock has seen a remarkable gain of 48%, opening at N317 per share and currently trading at N470 per share.

Sources who shared the scoop revealed that the billionaire is one of the major forces behind the trades and has been acquiring the stock.

It is however unclear how many shares he has acquired so far and whether he plans to hold a significant stake in Nigeria’s largest company by market capitalization.

Femi Otedola, renowned for his mercurial stock-picking prowess, is recognised as one of the major drivers of the stock market’s bull run in 2023. 

His early 2023 foray into Transcorp Group shares sparked a rally that catapulted the stock into the top 5 performing stocks of the year.

The stock has risen from just under N2 per share to N19 per share. It is believed that Otedola exited the stock at multiples of his entry price. He had also acquired a significant stake that required that he communicate to the Exchange.

He also acquired shares in First Bank Plc when the stock was trading below N5 in 2022, rising to become the officially declared majority shareholder of the bank. The stock also recently hit the trillion market cap milestone and trades at around N30 per share. 

N10 trillion market cap: Sources also suggest that the billionaire could be betting on Dangote Cement to possibly become the first Nigerian stock worth N10 trillion in market capitalization, a feat that could take the company’s share price to around N1,000 per share. 

Africa and Nigeria’s richest man, Aliko Dangote owns an unassailable stake in the company with over 85% ownership of the stock.

Dangote Cement currently trades at a high price-to-earnings multiple of 17.4x based on its trailing 12 months’ earnings.

According to valuation metrics, the company’s earnings per share have been growing at a compounded annual growth rate of 21%. 

Yet, in the stock market, market sentiments often drive up share prices ahead of fundamentals, as investors continue to invest billions of naira in equities. 

Dangote Cement reported earnings per share of N16.2 in the first 9 months of 2023, compared to N12.5 in the same period in 2022. 


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