Last week, Nigerian stocks posted their biggest gains in weeks as the main equity index rose by 2.4 per cent, driven by heavy buy interest in industrial goods and oil & gas stocks. Equities have yielded 42.8 per cent so far this year.
That said, the size of trade fell sharply as trade volume dropped by 72.8 per cent.
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The earnings season is already here, with the corporate results for the third quarter expected to start flooding the market any moment soon. That could revitalise activity in the market, which for a couple of weeks has somewhat lacked key drivers.
“We expect investors to take position in the market ahead of the third quarter earnings releases, as a result, market activity is expected to increase particularly in fundamentally strong tickers,” said analysts at Lagos-based Meristem Securities ahead of the week.
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“The recent dovish stance from the monetary policy committee is expected to drive further capital inflow into equities as investor seek higher return outside of fixed income instruments,” 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.
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.
Transcorp
Transcorp tops this week’s list for trading below its intrinsic value. The net profit ratio (NPR) of the conglomerate is 20.8 per cent, while the price-to-earnings (PE) ratio is 6.8x. Its relative strength index (RSI) is 42.9.
First HoldCo
First HoldCo makes the cut for trading below its intrinsic value. The financial services group’s NPR is 17.4 per cent, while the PE ratio is 2.1x. Its RSI is 4.2.
Custodian Investment
Custodian investment appears on the pick for its fairly strong fundamentals. The NPR of the company is 44.2 per cent, while the PE ratio is 4.1x. Its RSI is 40.1.
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Aradel
Aradel makes the selection for trading below its intrinsic value. Its NPR is 44.2 per cent, while its PE ratio is 9.7x. The RSI is 70.6.
Access Holdings
Access Holdings makes the cut for its currently sound fundamentals. The corporation’s NPR is 13.6 per cent, while the PE ratio is 1.5x. Its RSI is 45.3.
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