Airtel Africa, Ecobank, Fidelity top stocks to watch this week

Shares are seeing an increasingly optimistic start to the year, leaning on the buoyancy around broadly impressive corporate results, to drive gains.

The Nigerian stock market added 2.33 per cent in the just concluded week, with the NGX 30 Index, which tracks the top 30 stocks in terms of market value and liquidity, recording higher appreciation at 2.92 per cent.

As companies will be announcing dividends in the next few weeks, investors should painstakingly consider companies offering dividends and which have reported improvement in profit.

This is to avert falling into the dividend trap, a situation whereby an attractive dividend masks the financial condition of a company that is witnessing a sharp drop in profit or even has slipped into loss.

PREMIUM TIMES has assembled a number of stocks with fundamentals and other potential, adopting key analytical approaches to save you the hassle of randomly picking equities for investment.

The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will gain value with the passage of time, particularly in the short term.

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

AIRTEL AFRICA

Airtel Africa leads the pack this week by virtue of nearly doubling its profit to $514 million for the first nine months of last year, strengthened by a revenue rise of 21 per cent for the period.

ECOBANK TRANSNATIONAL INCORPORATED (ETI)

ETI makes the selection for recording a surge in profit of more than threefold for 2001. The transnational lender’s profit for the period stood at N143.1 billion, helping Earnings Per Share (EPS) up to N4.33 and keeping Price to Earnings (PE) ratio low at 2.80.

The stock has returned 98.4 per cent in the past 52 weeks.

NCR NIGERIA

NCR features on the list for currently trading tremendously below its real value, brightening its chances of significant price appreciation in the future. It’s EPS as of close of trade on Friday was N2.97, with a PE ratio of 1.01.

SOVEREIGN TRUST INSURANCE

Sovereign Trust appears in pick for trading well below its real value at the moment. The insurer’s EPS at the last trading session was N0.60 with a PE ratio of N0.40.

FIDELITY BANK

Fidelity features on the list on the twin factors of post strong earnings for the financial year 2021 and trading significantly below its actual value. The lender’s net profit scaled up 44.8 per cent to N40.6 billion after revenue hit N249.4 billion, recording more than a fifth increase.

CAP PLC

CAP makes our selection for trading close to its lowest price level in 52 weeks. The chemical and paint maker’s EPS IS N1.20, while its PE ratio is 16.23.