Africa Prudential, AIICO Insurance, C & I Leasing top stock pick this week

Nigerian stocks depreciated last week, after a fragile recovery in the penultimate week, dropping by 3.1 per cent as sell pressure across the sectors, notably oil & gas and industrial goods, weighed on the main equity index.

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The slide was perhaps a litmus test for Nigerian Exchange’s introduction of a T+1 clearing and settlement cycle during the week, even though the appreciation the market recorded on Friday could be an indication that activities are back in a positive direction.

“We anticipate renewed bargain-hunting, particularly in fundamentally sound stocks and banking names that recently experienced price corrections,” said analysts at Meristem Securities in their outlook for the week.

“But intermittent profit-taking could persist as investors rebalance portfolios, which may introduce some short-term volatility,” 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.

Africa Prudential

Africa Prudential tops this week’s pick on the basis of its strong fundamentals and for trading close to its lowest price in 52 weeks. The financial services company’s net profit ratio (NPR) is 45.2 per cent, while the price-to-earnings (PE) ratio is 18.8x. Its 14-day Relative Strength Index (RSI) is 40.5.

AIICO Insurance

AIICO Insurance makes the selection by virtue of its strong fundamentals. The NPR of the underwriter is 17.1 per cent, while the PE ratio is 7.3x. Its 14-day RSI is 49.2.

C & I Leasing

C & I Leasing appears on the pick on the basis of its robust fundamentals and for trading below its intrinsic value. The NPR of the company is 7.6 per cent, while the PE ratio is 5.1x. The 14-day RSI is 44.

Access Holdings

Access Holdings makes the selection on the basis of its strong fundamentals and for trading below its intrinsic value. The NPR of the financial institution is 14.1 per cent, while the PE ratio is 1.8x. Its 14-day RSI is 43.7.

May & Baker

May & Baker makes the cut by virtue of its strong fundamentals. The NPR of the pharmaceutical firm is 11.7x, while the PE ratio is 17.8. The 14-day RSI is 56.8.