Sovereign Trust Insurance, UBA, NPF Microfinance Bank top stock picks this week

Last week, Nigerian stocks advanced by 2.6 per cent, driven by increased demand for bank and insurance equities. The main equity index has returned 11.4 per cent so far this year, with the Consumer Goods Index leading the charge.

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“Investors might start positioning for Q2-earning season in June, favoring corporates with FX gains, cost control, clear growth trajectory, and those with potentials for quality interim dividend payment,” analysts at investment bank United Capital said ahead of the week.

This week, profit-taking activities may be witnessed in stocks that are close to their 52-week high.

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

Sovereign Trust Insurance

Sovereign Trust Insurance tops this week’s list for trading significantly below its intrinsic and book value. The price-to-book (PB) ratio of the underwriter is 0.9x, while the price-to-earnings (PE) ratio is 4.6x. Its relative strength index (RSI) is 62.1.

United Bank for Africa (UBA)

UBA appears on the pick for currently trading below its underlying and book value. The PB ratio of the lender is 0.4x, while the PE ratio is 1.6x. Its RSI is 49.9.

NPF Microfinance Bank

NPF Microfinance Bank appears on the list for trading below its intrinsic value. The company’s PB ratio is 1.1x, while its PE ratio is 6.3x. The RSI is 55.9.

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NEM Insurance

NEM Insurance makes the cut for currently trading below its underlying and book value. The underwriter’s PB ratio is 0.9x, while the PE ratio is 2.3x. Its RSI is 67.2.

Japaul Gold

Japaul Gold makes the list for trading below its underlying value. The company’s PB ratio is 1.5x, while the PE ratio stands at 6.6x. Its RSI is 48.1.

Custodian Investment

Custodian Investment features on the pick for currently trading below its underlying and book value. The PB ratio of the company is 0.9x, while the PE ratio is 2.5x. Its RSI is 70.9.