Mutual Benefits, Fidelity, Transcorp top stock pick this week

Nigerian stocks advanced by 2.2 per cent last week on gains by oil & gas equities, taking the year-to-date yield to 26.6 per cent. The market achieved that in spite of a reasonable decline in trade volume.

Investors and analysts are currently awaiting the earnings reports of four of the big lenders and those of some big-cap companies, which could shape the direction of trade in the near term.

“Investors may still seek to lock in gains on stocks that have posted strong year-to-date returns, especially amid lingering caution following the recent NGX advisory on price movements,” said analysts at Meristem Securities in their outlook for the week.

“The broader macroeconomic backdrop remains relatively supportive, and liquidity conditions appear stable, which should help sustain investor confidence,” they added.

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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, with the expectation 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.

Mutual Benefits Assurance

Mutual Benefits tops this week’s list on the basis of its strong fundamentals and for trading below its intrinsic value.

The net profit ratio (NPR) of the insurer is 22.2 per cent, while the price-to-earnings (PE) ratio is 5.2x. Its relative strength index (RSI) is 61.

Fidelity

Fidelity appears on the pick on the basis of its currently robust fundamentals. The NPR of the lender is 19.1, while the PE ratio is 3.7x. The RSI is 40.8.