AIICO, Zenith, Vitafoam top stock pick this week

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Nigerian stocks diminished by 2.2 per cent last week on account of sell pressure on a number of equities.

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Profit taking in insurance and industrial goods stocks largely accounted for the decline.

That said, the year-to-date yield of all the stocks quoted on the exchange stands at 39.6 per cent, with the consumer goods index being the best-performing sector so far at 99 per cent.

“We anticipate the NGXASI to trend modestly higher this week, supported by selective buying in oversold stocks,” analysts at Meristem Securities had said in their outlook for the week.

PREMIUM TIMES has assembled some stocks with sound fundamentals, adopting rigorous approaches to save you the risk of picking equities at random for investment.

The pick, a product of an analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that selected stocks will record reasonable price appreciation with the passage of time.

This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.

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AIICO Insurance

AIICO tops this week’s list for its currently strong fundamentals

The net profit ratio (NPR) of the underwriter is 8.2 per cent, while the price-to-earnings (PE) ratio is 7x. Its relative strength index (RSI) is 36.1.

Zenith Bank

Zenith makes the cut for its solid fundamentals and for trading below its intrinsic value.

The lender’s NPR is 21.8 per cent, while the PE ratio is 2.4x. Its RSI is 40.4.

Vitafoam

Vitafoam appears on the pick by virtue of its fairly strong fundamentals.

The NPR of the company is 13.5 per cent, while the PE ratio is 8.7x. Its RSI is 47.5

Chemical and Allied Products (CAP)

CAP makes the selection by reason of its strong fundamentals.

Its NPR is 11.6 per cent, while its PE ratio is 12.3x. The RSI is 66.7.

May & Baker

May & Baker makes the cut for its currently sound fundamentals and for trading below its underlying value.
The company’s NPR is 8.6 per cent, while the PE ratio is 9.6x. The RSI is 48.8.