The Nigerian stock market in the past few weeks has been bullish, except that it closed marginally lower by 0.22% last week, occasioned by profit taking in MTN and Seplat. The positive vibration was triggered by impressive performance in FY 2021, dividend pay-out and Q1 2022 results of listed companies.
Based on the quality of earnings released so far, quite a number of stocks have been rewarded with growth in their share prices.
Despite the rally that lingered for many days, some stocks with fantastic earnings have not been adequately compensated in terms of price appreciation. They are still trading far below their intrinsic values, hence they are considered cheap. By the time the market start looking at the direction of these stocks, they will not remain at their current prices.
To mention a few among cheap stocks with strong fundamentals and uptrend potentials, the following may be considered for strategic positioning:
The share price of Access Holdings Plc is currently trading at N9.85. In the past 52 weeks, the stock has touched a high of N10.60.
With Q1 2022 earnings per share (EPS) of N1.61, relative to the current share price of N9.85, a low P/E ratio of 6.12x is a pointer to the fact that the stock is cheap.
With the Book Value of N30.84, Access Holdings is considered very cheap, relative to its current share price of N9.85.
UBA is currently at N7.90 with a 52 weeks high of N8.85. It is trading 10.73% away from its 52 weeks high of N8.85.
With the earnings per share of N1.21 in Q1 2022, a low P/E ratio of 6.51x is indicative that UBA is cheap at the current price.
Considering its Book Value of N24.14, relative to its share price of N7.90, UBA is grossly underpriced. A position in UBA has uptrend potential.
Zenith Bank is trading below trading far below its intrinsic value. It closed on Friday at N24.1.
In the last one year, the share price of the financial institution has touched a high of N27.50 and a low of N22.
It is trading 12.36% away from its 52 weeks high of N27.50, which implies an uptrend potential of 12.36% for the share price of the bank.
Going by its Book Value of N42.37, relative to its current price of N24.1, Zenith Bank is very cheap and embedded with growth potentials.
Fidelity Bank within the last one year has touched a high of N4.05 and a low of N2.19. Currently trading at N3.49, due to profit taking by investors by investors, another entry opportunity has being created. The lower the price the better for entry.
There is uptrend potential of 13.83% in the share price of Fidelity Bank relative to its 52 weeks high of N4.05.
Considering its book value of N10.65, relative to its current share price of N3.49, Fidelity Bank is cheap and has uptrend potential.
FLOUR MILLS OF NIGERIA
The audited report of Flour Mills for the year ended 31 March 2022 is expected to hit market soon. There is possibility of growth in the Company’s financials which could also lead to increase in dividend payout.
A final dividend of N1.65 was paid to shareholders the previous year. It is possible that they increase dividend payout or repeat same dividend declared the previous year.
Currently trading at N37, Flour Mills has touched a high of N41.45. A position in Flour Mills has an uptrend potential of 10.74%, relative to its 52 weeks high of N41.45.
Its Book Value of N45.11, relative to its current price of N37 also confirm the fact that the stock is still trading below its fair value, hence it has uptrend potential.
Ecobank Transnational Incorporated is grossly undervalued as it is trading far below its fair value. Currently trading at N11.95, the share price of Ecobank has touched a high of N13.2 and a low of N4.95 in that 52 weeks.
With the Book Value of N35.83, relative to its current share price of N11.95, Ecobank is considered very cheap with uptrend potential.
The share price of GTCO is currently at N23.70 and it has touched a high of N30.25 and a low of N21.45 in the last 52 weeks.
It is trading 21.25% away from its year high of N30.25, which implies an uptrend potential of 21.45% for GTCO.
The Book Value of N30.88, relative to the current price of N23.70 is a confirmation that GTCO is underpriced.
The big elephant is yet to release its audited reports for 2021 and Q1 2022 report. There is every possibilities that it will be released before the end of this month.
Currently trading at N12, the share price of FBNH has touched a high of N12.90 and a low of N7.05 in the last one year.
With the Book Value of N20.99, relative to its current price of N12, FBNH is underpriced.