AIICO Insurance, Jaiz Bank, Transcorp Power top stock pick this week

Insurance stocks are the rave of the moment. The completion of a radical revamp of the sector, leading last week to the Nigerian Insurance Industry Reform Act, is profoundly boosting confidence in insurance stocks.

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During the week alone, the sector returned 41 per cent, its best performance since 2009, according to Nigerian Exchange data. In all, the all-share index yielded 3.2 per cent.

“We anticipate bullish bias in the equities market, as investors continue to reprice stocks higher on the back of broadly impressive corporate earnings,” investment bank Meristem Securities had projected, going into the week.

This week, increased demand for insurance equities is expected to drive the current run of gains in the sector further.

Also, investors will be watching the announcement of the half-year earnings release of the Big Five lenders, with the financial reports of GTCO and Zenith already awaiting the Central Bank of Nigeria’s approval.

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

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

Aiico Insurance

Aiico tops this week’s pick for trading below its intrinsic value. The price-to-book (PB) ratio of the insurer is 1.7x, while the price-to-earnings (PE) ratio is 9.4x. Its relative strength index (RSI) is 86.7.

Jaiz Bank

Jaiz Bank makes the selection for trading significantly below its intrinsic value. The bank’s PB ratio is 2.9x, while its PE ratio is 7x. The RSI is 76.1.

Transcorp Power

Transcorp Power makes the selection for trading at its lowest price in 52 weeks. The electricity provider’s PB ratio is 15x, while its PE ratio is 27.5x. The RSI is 0.

Lasaco Insurance

Lasaco Insurance appears on the pick for trading with a moderate 10-day RSI, indicating chances of further price increase at least in the near term. The PB ratio of the underwriter is 1.9x, while the PE ratio is -17.4x. Its RSI is 65.8.

Presco

Presco makes the cut for trading below its intrinsic value. The agribusiness company’s PB ratio is 2.2x, while the PE ratio is 5.5x. Its RSI is 66.7.

GTCO

GTCO makes the cut for trading below its intrinsic value. The financial services group’s PB ratio is 1.2x, while the PE ratio is 3.6x. Its RSI is 61.3.