Improved investor confidence helped Nigerian stocks record their biggest weekly gain this year last week when the benchmark equity index rose by 7 per cent, driven by a substantial demand for industrial goods stocks. Less than two months on, the index has already delivered 25.3 per cent in return, and expectations are high that, as the earnings season advances, attractive dividend declarations and more announcements of impressive corporate results could help the market drive its current bull run further.
“The ongoing earnings releases and dividend expectations is likely to keep investors engaged, particularly in fundamentally strong tickers,” said analysts at investment bank Meristem Securities in their outlook early in the week.
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“In addition, the recently revised equity allocation limits for PFAs, is expected to drive increased institutional participation,” 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, with the expectation 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.
United Capital
United Capital tops this week’s list on the basis of its strong fundamentals,
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The net profit ratio (NPR) of the company is 51.6 per cent, while the price-to-earnings (PE) ratio is 11.8x. Its relative strength index (RSI) is 40.6.
Fidelity Bank
Fidelity Bank appears on the pick on the basis of its currently robust fundamentals and for trading below its underlying value. The NPR of the lender is 19.1, while the PE ratio is 3.8x. The RSI is 57.3.
Cornerstone Insurance
Cornerstone Insurance makes the selection for its strong fundamentals. The underwriter’s NPR is 14 per cent, while the PE ratio is 13.5x. Its RSI is 49.7.
Africa Prudential
Africa Prudential makes the cut for its strong fundamentals. The NPR of the company is 36.5, while the PE ratio is 2.4x. Its RSI is 52.5.
Unilever
Unilever makes the pick for its strong fundamentals. The company’s NPR is 11 per cent, while the PE ratio is 16.8x. The RSI is 98.7.
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