This report is an investment guide and not a buy, sell or hold recommendation. Investors are advised to consult their financial advisers before making investment decisions.
Nigerian equities closed last week on a positive note, gaining 1.9 per cent, as renewed demand for insurance and consumer goods stocks lifted overall market performance.
Investor sentiment remained upbeat, with all sectoral indices ending in positive territory, reflecting portfolio realignment by market participants seeking stocks with near- to medium-term price growth potential.
Market activity in the coming weeks is expected to be shaped by strategic positioning for the new year, as investors look for attractive entry points into fundamentally sound stocks. “Overall, the market tone is expected to remain mildly bullish, supported by targeted buying in quality names,” Meristem Securities said in a note to investors.
Against this backdrop, this week’s stock picks—based on analytical market screening—highlight companies considered to be trading below their intrinsic values or supported by strong fundamentals, with potential for gradual price appreciation over time.
Fidelity Bank Plc tops the list, supported by solid fundamentals and valuation metrics that suggest it is trading below intrinsic value. The lender posted a net profit ratio (NPR) of 19.1 per cent, with a price-to-earnings (P/E) ratio of 3.6 times and a relative strength index (RSI) of 49.6.
NEM Insurance Plc also features on the list, driven by valuation considerations. The insurer’s NPR stands at 21.2 per cent, while its P/E ratio is 4 times. The stock’s RSI of 14.9 indicates it is deeply oversold.
CAP Plc makes the selection for trading below its estimated intrinsic value. The paints manufacturer recorded an NPR of 11.6 per cent, with a P/E ratio of 11.6 times and an RSI of 35.2.
Vitafoam Nigeria Plc is included on the back of its strong fundamentals. The company reported an NPR of 8.7 per cent, a P/E ratio of 8.4 times and an RSI of 56, suggesting moderate buying momentum.
Stanbic IBTC Holdings Plc rounds out the list, supported by fairly strong fundamentals and valuation that indicates it is trading below underlying value. The banking group posted an NPR of 34.5 per cent, with a P/E ratio of 4.8 times and an RSI of 44.1.
This report is intended as a market guide and does not constitute investment advice. Investors should seek professional guidance before taking positions in the market.
