HBM Nigeria, United Capital, Wema Bank top stock pick this week

Nigerian stocks retreated by 0.8 per cent last week, despite the release of several strong half-year results, as profit-taking pressured trade. Sell-offs in consumer goods stocks fuelled the slide.

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This week, more corporate results are expected, notably those of the big banking institutions, which could shape the direction the market may go in the near term.

This week, increased positioning, notably in stocks that pay dividends at least twice a year, could be witnessed as the market awaits the release of half-year corporate results.

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.

HBM Nigeria

HBM Nigeria tops this week’s list for its strong fundamentals. The net profit ratio (NPR) of the cement manufacturer is 9.6, while the price-to-earnings (PE) ratio is 18.1x. Its 10-day relative strength index (RSI) is 58.7.

United Capital

United Capital appears on the pick on the basis of its attractive fundamentals. The NPR of the company is 51.2, while the PE ratio is 10.1x.

Wema Bank

Wema Bank makes the selection for its strong fundamentals and for trading below its intrinsic value. The lender’s NPR is 30.5, while the PE ratio is 1.1x. Its RSI is 40.9.