GTCO, CAP, AIICO top stock pick this week

Last week, the market went in a contrary direction against largely positive third-quarter and nine-month corporate results, depreciating by 3 per cent.

Insurance stocks took the heaviest blow as all the sector indexes retreated.

“Overall, while we anticipate a mild gain in the market, there remain possibilities for profit-taking in tickers that have and may still exceed their year highs due to the influence of their earnings releases and investors’ positioning,” analysts at the investment bank Meristem Securities had said in their outlook for the week.

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.

Guaranty Trust Holding Company (GTCO)

GTCO tops this week’s list for its currently strong fundamentals and for trading below its intrinsic value.

The net profit ratio (NPR) of the banking group is 71.8 per cent, while the price-to-earnings (PE) ratio is 4.5x. Its relative strength index (RSI) is 30.4.

Chemical and Allied Products (CAP)

CAP makes the cut for its fairly sound fundamentals.

The company’s NPR is 7.1 per cent, while the PE ratio is 12.3x. Its RSI is 63.5.

AIICO Insurance

AIICO appears on the pick for trading below its intrinsic value.

The NPR of the insurer is 6.3 per cent, while the PE ratio is 8.3x. Its RSI is 45.6.

United Bank for Africa (UBA)

UBA makes the selection on the back of its solid fundamentals.

Its NPR is 22.3 per cent, while its PE ratio is 1.9x. The RSI is 41.4.

Fidson Healthcare

Fidson Healthcare makes the cut for its currently sound fundamentals.

The company’s NPR is 9.4 per cent, while the PE ratio is 8.9x. The RSI is 24.7.