UACN, HBM Nigeria, GTCO top stock pick this week

Nigerian stocks appreciated for the second straight week last week, adding 0.9 per cent as increased demand for oil & gas stocks and bank equities boosted gains.

Year to date, the main stock index is up by 62 per cent.

The market is still on the lookout for the half-year corporate results of four of the Big 5 banks, much as the end of the third quarter is around the corner.

“We expect the positive sentiment recorded last week to continue into the new week, supported by renewed bargain hunting and stronger market participation,” analysts at Meristem Securities said in their outlook for the week.

“With liquidity gradually returning to the broader market following the Dangote Refinery IPO positioning, investors are likely to refocus on stocks with attractive valuations and strong fundamentals. This should keep buying interest firm, particularly in names with meaningful upside to their target prices,” they added.

Looking forward, the big slash in the monetary policy rate by 3.5 per cent last week could drive more inflows into equities in the near term as yields on fixed income securities are likely to drop.

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.

UACN

UACN tops this week’s list for its strong fundamentals. The net profit ratio (NPR) of the conglomerate is 3.8, while the price-to-earnings (PE) ratio is 22.4x. Its 14-day relative strength index (RSI) is 59.3.

HBM Nigeria

HBM Nigeria appears on the pick on the basis of its attractive fundamentals. The NPR of the cement maker is 28, while the PE ratio is 18x. The 14-day RSI is 61.4.

GTCO

GTCO makes the selection for its strong fundamentals and for trading below its intrinsic value. The NPR of the banking group is 37.4, while the PE ratio is 5.7x. Its 14-day RSI is 72.8.

Unilever

Unilever makes the cut for its sound fundamentals. The NPR of the conglomerate is 14.1, while the PE ratio is 19x. The 14-day RSI is 0.3.

NEM

NEM makes the cut for its sound fundamentals and for trading below its intrinsic value. The NPR of the insurer is 15.7, while the PE ratio is 5.6x. The 14-day RSI is 38.9.