The arrival of the earnings season is on track to stir up more activity in the Nigerian equity market in the weeks ahead, with the corporate results so far released largely positive.
That, combined with analysts’ view that rate cut could progress into next year and hopes that hot money may shift considerably from fixed-income assets into equities on that score, is brightening the prospects for stocks in the short term.
With a 44.7 per cent yield already delivered this year, well above the inflation rate, Nigerian stocks could be in for their strongest outing in years by the time 2025 winds down.
“The country’s upgrade to FTSE Russell’s Watchlist (for possible reclassification from Unclassified to Frontier market status) is poised to bolster investors’ appetite, given the compelling macroeconomic backdrop,” analysts at Meristem Securities said in the week that just went by.
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 in hopes 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.
Okomu Oil
Okomu Oil tops this week’s list for its fairly strong fundamentals and for announcing a special interim dividend of N10 last week. The net profit ratio (NPR) of the agro-processor is 33 per cent, while the price-to-earnings (PE) ratio is 14.5x. Its relative strength index (RSI) is 100.
Fidelity Bank
Fidelity Bank makes the pick for currently trading below its intrinsic value. The NPR of the lender is 27.5 per cent, while the PE ratio is 2.2x. Its RSI is 44.9.
Fidson Healthcare
Fidson makes the cut for its reasonably strong fundamentals. The company’s NPR is 9.4 per cent, while the PE ratio is 9.4x. Its RSI is 45.9.
United Bank for Africa (UBA)
UBA makes the selection for currently trading well below it intrinsic value. Its NPR is 22.3 per cent, while its PE ratio is 1.9x. The RSI is 33.8.
Mutual Benefits
Mutual Benefits makes the cut for currently trading below its underlying value. The insurer’s NPR is 13.1 per cent, while the PE ratio is 4.1x. Its RSI is 57.9.
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