Nigerian stocks pulled off a 1.4 per cent gain this week, even as the market saw limited trading sessions on account of public holidays on Thursday and Friday, marking this year’s Eid-el-Fitr celebration. Increased interest in industrial goods stocks drove the surge.
As the first quarter of the year gradually winds down, investors’ focus will be on the release of the audited financial reports of big lenders and potential announcement of dividends, with the deadline for filing barely a week away.
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“Although, intermittent profit-taking may persist, as some investors continue to lock in profits following the recent rally, we expect any pullbacks to remain largely contained, as the underlying demand for fundamentally sound counters are likely to keep the market tilted to the upside,” analysts at Meristem Securities 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.
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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.
United Bank for Africa (UBA)
UBA tops this week’s pick for its strong fundamentals and for trading below its intrinsic value. The lender’s net profit ratio (NPR) is 23.8 per cent, while the price-to-earnings (PE) ratio is 2.4x. Its (relative strength index) RSI is 57.9.
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NPF Microfinance Bank
NPF Microfinance Bank makes the list on the basis of its strong fundamentals. The PE ratio of the micro-lender is 10.5x. Its RSI is 52.9.
Lafarge
Lafarge appears on the pick for its robust fundamentals. The NPR of the cement maker is 29.4 per cent, while the PE ratio of the company is 13.4. The RSI is 73.8.
NEM Insurance
NEM Insurance makes the selection for its strong fundamentals and for trading below its underlying value. The underwriter’s NPR is 14.2 per cent, while the PE ratio is 6.9x. Its RSI is 52.
Vitafoam
Vitafoam makes the cut for its strong fundamentals. The NPR of the company is 14.1, while the PE ratio is 11.6x. Its RSI is 61.3.
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