Wema Bank, Sovereign Trust, Red Star Express top stock pick this week

Last week, the Nigerian main stock index went up by 1.5 per cent, returning to gain after depreciating the penultimate week.

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Even with limited trading sessions during the week on account of an Easter Monday holiday, liquidity was stronger as transaction value increased by 30 per cent.

The first quarter earnings season is already under way. One early indication that considerably stronger corporate results may drive gains and more interest in stocks is the example of Lafarge Africa.

The cement maker reported an 837 per cent jump in profit, shooting its share price up by as much as 10 per cent the day it released its financial report for the period.

“The equities market might remain dovish due to elevated interest rate environment in the fixed-income market, we still expect bearish sentiments to linger in the background,” analysts at United Capital had said, going into the week.

“Generally, investors await Monetary Policy Committee (MPC)’s decision in their upcoming meeting in May,” 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 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.

Wema Bank

Wema Bank tops this week’s list for trading significantly below its intrinsic value and for declaring a 233.3 per cent increase in dividend for last year, compared to 2023. The price-to-book (PB) ratio of the lender is 1x, while the price-to-earnings (PE) ratio is 0.9x. Its relative strength index (RSI) is 76.1.

Sovereign Trust Insurance

Sovereign Trust makes the cut for currently trading well below its underlying and book value. The underwriter’s PB ratio is 0.4x, while the PE ratio is 4.3x. Its RSI is 47.4.

Red Star Express

Red Star Express appears on the list for trading below its book value. The company’s PB ratio is 0.9x, while its PE ratio is 9.8x. The RSI is 22.

Ikeja Hotel

Ikeja Hotel appears on the pick for currently trading below its underlying value and for declaring an interim dividend for 2025 simultaneously with a full-year dividend for last year. The PB ratio of the firm is 0.8x, while the PE ratio is 3.7x. Its RSI is 73.8.

READ ALSO: Lafarge Africa’s quarterly profit surges 837%, shooting stock price to 52-week high

Japaul Gold

Japaul Gold makes the cut for trading below its underlying value. The company’s PB ratio is 1.6x, while the PE ratio stands at 7x. Its RSI is 56.2.

Consolidated Hallmark Holdings

Consolidated Hallmark makes this week’s list for trading below its book value. The company’s PB ratio is 0.9x, while the PE ratio stands at 8.6x. Its RSI is 46.2.