Last week, the Nigerian stock market witnessed one of its sharpest declines so far this year, depreciating by 3.6 per cent as sell-offs in bank stocks hammered the benchmark equity index. That was not unexpected, as analysts have recently projected stocks to experience price correction, having stayed in the uptrend territory for quite a while.
“Investors are likely to continue to take advantage of recent price corrections to accumulate fundamentally sound stocks, particularly counters with strong earnings prospects and attractive valuations,” analysts at Meristem Securities said in their outlook for the week.
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Looking forward, increased positioning in stocks that pay dividends half-yearly is likely to be seen as the market approaches the end of the second quarter.
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.
Fidson
Fidson tops this week’s pick on the basis of its strong fundamentals. The pharmaceutical company’s net profit ratio (NPR) is 7.8 per cent, while the price-to-earnings (PE) ratio is 21.9x. Its 14-day relative strength index (RSI) is 32.2.
Africa Prudential
Africa Prudential makes the selection, considering its strong fundamentals. The NPR of the company is 45.2 per cent, while the PE ratio is 17.4x. Its 14-day RSI is 35.5.
Access Holdings
Access Holdings appears on the pick on the twin factors of its robust fundamentals and for trading below its intrinsic value. The NPR of the banking group is 14.1 per cent, while the PE ratio is 1.6x. The 14-day RSI is 32.4.
United Bank for Africa (UBA)
UBA makes the selection for trading below its intrinsic value. The NPR of the bank is 11.6 per cent, while the PE ratio is 4.9x. Its 14-day RSI is 26.3.
AIICO Insurance
AIICO Insurance makes the cut based on its attractive fundamentals and for trading below its intrinsic value. The NPR of the insurer is 17.1x, while the PE ratio is 6.3x. Its 14-day RSI is 35.2.
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