Olufemi Adeyemi
Total Energies, E-Tranzact, UBA, Others have been identified as stocks exhibiting robust fundamentals and significant growth potential.
The Nigerian stock market demonstrated sustained growth last week, exhibiting a 1.8 percent increase, resulting in a year-to-date return of 2.5 percent. Trading volume data reveals a substantial surge in activity, primarily attributed to amplified investor interest in the financial services sector.
Despite a notable increase in the primary equity index last year, there remains a substantial number of equities with strong potential for price appreciation in the market.
Analysts at United Capital noted that due to elevated interest rates in the fixed income and money markets, a bearish sentiment is likely to persist in the equities market as investors favor the high yields available in fixed income investments.
They further suggested that fund managers and businesses might focus on mid- to long-term investment strategies (three months or more), selectively investing in robust equities with solid fundamentals and relevant corporate actions.
To assist investors, we have compiled a list of stocks with strong fundamentals and potential, utilizing key analytical methods to simplify the investment selection process.
This curated selection serves as a guide for entering the market and strategically positioning oneself, with the expectation that these equities will appreciate over time.
It is important to note that this is not a recommendation to buy, sell, or hold, but rather a guide for stock investment. Consulting with a financial advisor is advisable before making any investment decisions.
Total Energies is highlighted this week as it is currently trading well below its intrinsic value. The company has a price-to-earnings (PE) ratio of 7.3x, a relative strength index (RSI) of 23.4, and a price-to-book (PB) ratio of 2.2x.
E-Tranzact is also included for trading below its intrinsic value, with a PE ratio of 21.5x, an RSI of 0, and a PB ratio of 4.4x.
UBA is on the radar for trading significantly under its true value. The lender has a PE ratio of 1.8 and an RSI of 54.8, with a PB ratio of 0.5x.
Jaiz Bank is also noted for trading well below its intrinsic value. This micro-lender has a PE ratio of 4.4x and an RSI of 55.4, while its PB ratio is at 3.4x.
Veritas Kapital is highlighted for trading below its intrinsic value as well. Currently, its PE ratio is 2.5x, with an RSI of 60, and a PB ratio of 1.1x.
FCMB Group is included this week for trading under its actual value. The financial services group has a PE ratio of 1.1x, an RSI of 63.8, and a PB ratio of 0.3x.