Transcorp, UBA, Linkage Assurance top stock pick this week

Nigerian stocks sustained their uptrend last week, adding 1.6 per cent, driven by growing demand for consumer goods shares.

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Financial services stocks alone accounted for more than half of trade.

The resilience the Nigerian equity market has built for itself so far this year continues to improve, demonstrated in its ability to weather shocks from the sell pressures that typically result from institutional investors rebalancing their portfolio towards the end of the year.

Riding on that strength and improving investor confidence, the market has reported two strong weekly gains in quick succession this month.

“The Nigerian equity market may continue to experience measured optimism this week. Broad-based sectoral gains, particularly in banking, ICT, Food and beverages, and building materials, alongside sustained NGX-ASI momentum, could support positive investor sentiment,” analysts at United Capital said in their outlook on Monday.

“Key drivers will include upcoming macroeconomic data, corporate earnings updates, and any fiscal developments that signal effective spending and investment management,” they added.

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

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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.
Transnational Corporation (Transcorp)

Transcorp tops this week’s list for its currently robust fundamentals and for trading close to its lowest price in 52 weeks, which offers a good entry point to potential investors.

The net profit ratio (NPR) of the company is 22.2, while the price-to-earnings (PE) ratio is 6.9x. Its relative strength index (RSI) is 45.3.

United Bank for Africa (UBA)

UBA appears on the pick for trading below its intrinsic value and for its strong fundamentals.

The NPR of the pan-African lender is 23.4, while the PE ratio is 1.9x. The RSI is 36.3.

Linkage Assurance

Linkage Assurance makes the cut for trading below its fairly strong fundamentals. The insurer’s NPR is 162 per cent, while the PE ratio is 4.9x. Its RSI is 43.9.