The Reason Why Cocoa Processing Company (CPC) is a Good Stock on the Ghana Stock Exchange

I am writing this to first of all restore confidence in the market and reveal some golden opportunities that some type of investors overlook in the market. I would use Cocoa Processing Company(CPC) as an example and let investors know what they miss when they look at only one side of issues.
Price movement of CPC from March to August.
Over some time now, there have been so many complaints from fellow investors, friends and some stakeholders of the market over the low trading price of CPC on the Ghana Stock Exchange. In actual fact, CPC is the lowest priced stock on the exchange and currently 0.02p.

  Some analysts blame it on the poor management of the company; others put the blame on the industry an well as government policies. Everyone has something to say but those are not the focus here.

Background: CPC is a company based in Ghana that cultivates and processes cocoa plants for use in a variety of applications, including liquors, chocolates, and butter. The Cocoa Factories have an annual throughput of 64,500 metric tonnes of Premium Ghana Cocoa beans which it processes into Cocoa Liquor, Cocoa Butter, Cocoa Cake and Cocoa Powder.
Key statistics of the company show that CPC as at today has a market capitalization of about GHS 40.76 million with a Price/book value in the most recent quarter as 6.1002.  
Now, the opportunity a stock like CPC gives to the investor is the ability to quickly make 100% capital gain when the stock gains a pesewa (p) or two. About 3 days ago, CPC was priced at 0.01p and had no prospects for some long term investors and dividend-seeking investors. But the point here is that, the least upward movement this stock can make is one (1) pesewa gain, and when this one (1) pesewa move is made, the price would be doubled (0.01p to 0.02p) which simply gives the investor a 100% capital gain. Thus for instance, if you invest GHC 1000, you would make GHC 2000 (excluding brokerage charges) by a one (1) pesewa upward movement of CPC. To me, this is a quick way to make money from a company whose financial figures are bad.
Unlike high priced stocks, Standard chartered Bank (SCB), TOTAL Petroleum, Tullow Oil (TLW), etc, CPC can easily double its share price when the market forces and volume of trades favor that. In the market now, CPC is trading at 0.02p per share and if it gains a pesewa or 2 pesewas, investors holding the stock would make another huge capital gain. For those who bought it at 0.01p, their investments would be quadrupled. (0.01p to 0.04p, 400% gain). This is what I call real quick money from the least trusted stock.
Meanwhile, one important thing to note is that, whiles it would take SCB, TLW, GCB, ECB and some high priced stocks just one or two trading sessions to gain 5 to 10 pesewas or more, it might take CPC weeks or months to make 1 or 2 pesewas (Judging from historic trade data of CPC). Nevertheless, CPC is still a good stock that can have significant impart on your portfolio.
My advice to you is to invest wisely and seek professional advice at all times. 

Twitter: @peagama

4 thoughts on “The Reason Why Cocoa Processing Company (CPC) is a Good Stock on the Ghana Stock Exchange

  1. Hi Patrick, though I get the angle with which you argue for possible capital gain in CPC, as a financial analyst who I believe relies on financial economics to analyze stocks and make projections, you reasoning here defied it. It is economically incorrect to pick the absolute prices of stocks to simply determine the likelihood of making a fortune should the price inch up, forgetting that the company could declare bankruptcy and you lose all your money as an investor as well. If you want to declare a stock as good, you don't just look at the share price but you analyze the price vis-a-vis its profitability; the assets in relation to the liability etc. Offer economically backed analysis to keep any ready who approaches your page informed and not this piece I just read.


  2. Good you read this post. Thanks for the advice. this piece is not intended to make anyone buy CPC out of ignorance, or the solicitation of any offer to buy CPC. This piece was to create hope for some speculative traders and stimulate discussion of CPC. My caption “Good Stock” generated more debate among peers and I think it's just perfect for the objectives of this post. Thanks for your brilliant concerns.


  3. What Patrick says is 100% spot on. CPC has a long term objective of returning back to profitability so hence the possibility of bankruptcy has been minimise. I would not recommended as s stock you should hold for the long term


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