- Investment opportunities in stocks with strong fundamentals
The stock market last week closed on a positive note, occasioned by growth in the share prices of Airtel, MTN, Nestle and 24 other stocks. The All Share Index and the Market Capitalisation grew by 0.63% week on week.
Is the market finding its way back up? How soon will prices of start looking up? These are the questions that have repeatedly asked by concerned investors. With the performance of last week, are we likely to say that the bull is gradually coming back?
Commenting of the market performance, The MD/CEO of Global View Capital Limited, Aruna Kebira stated thus:
“When you compare the performance for last week with the penultimate week, one might be tempted to say that the market fared better last week. I would have convincingly say that the market is turning, but the information at the market arena might not likely help with that conclusion.
This kind of performance that we saw last week is associated with the release of the results of Zenith Bank and Stanbic IBTC Holdings with the interim dividend declaration of N0.30 and N1.50 respectively.
The CBN is still trying out intervention the rising inflation in the economy and its attendant consequences. Coupled with the depreciation of Naira and the world supply side is still grossly down. It may take time before we see the market reversing. Be that as it may, when the Q3 Earnings begins to hit the market, we expect to see a better market. Now, I won’t actually say that the market has turned, but it can be coming back. For we never can tell, because something is actually going to trigger it. But that information that will trigger it is still actually at the market place. I think the subsequent weeks will actually determine the direction of the market”.
STOCKS TO WATCH
Most stocks have touched their 52 weeks low and some are tending towards their year low. This is creating new entry opportunities for discerning investors.
We have always advised investors on this platform to take position in fundamentally strong stocks because they stand the test of time. Just to mention a few, the following stocks can be considered for strategic positioning:
Zenith Bank declared an interim dividend of 30 kobo for its Q2 2022 earnings. The financial institution reported a Gross Earnings of N404.763 billion for the 6 months period, up by 17.13% from N345.559 billion reported the previous year.
Profit after tax grew year on year by 4.99% to N111.413 billion from N106.119 billion reported in Q2 2022.
Earnings per share of the Group increased to N3.55 from the EPS of N3.38 reported the previous year.
At the share price of N21.90, the P/E ratio of Zenith Bank stands at 6.17x with earnings yield of 16.20%.
Qualification date for the interim dividend of 30 kobo is September 6, 2022.
The Register of members will be closed on September 7, 2022. Payment date is September 13, 2022.
Zenith Bank is currently trading at N21.90 and has touched a high of N27.5 and N18.90 in the past 52 weeks.
It is trading 20.36% away from its 52 weeks high of N27.50, which implies an uptrend potential of about 20% for the share price of the bank.
Going by its Book Value of N42.37, relative to its current price of N21.90, Zenith Bank is very cheap and embedded with growth potentials.
The share price of Access Holdings Plc is currently trading at N8.20. In the past 52 weeks, the stock has touched a high of N10.60 and a low of N8.
It is trading 22.64% away from its 52 weeks high of N10.60, which implies an uptrend potential of about 23% for Access Holdings.
With the Book Value of N30.84, Access Holdings is considered very cheap, relative to its current share price of N8.20.
The share price of GTCO is currently trading at N20 and it has touched a high of N30 and a low of N18.90 in the last 52 weeks.
It is trading 33% away from its year high of N30, which implies an uptrend potential of 33% for GTCO.
The Book Value of N30.88, relative to the current price of N20 is a confirmation that GTCO is underpriced.
UBA is currently trading at N7.15 with a 52 weeks high of N8.85 and a low of N6.7. It is trading 19.21% away from its 52 weeks high of N8.85, implying an uptrend potential of about 19% for UBA.
Considering its Book Value of N24.14, relative to its share price of N7.15, UBA is grossly underpriced. A position in UBA has uptrend potentials.
The share price of FBHN is currently trading at N10.85. Within the last 52 weeks, the share price of the big elephant has touched a high of N12.90 and a low of N7.30.
It is trading 15.89% away from its year high of N12.90, which implies an uptrend potential of about 16% relative to its year high of N12.90.
With the Book Value of N24.51, relative to its current price of N10.85, FBNH is underpriced.
Flour Mills is trading at a year low of N27 with a 52 weeks high of N41.45.
It is trading 34.86% away from its 52 weeks high of N41.45, implying an uptrend potential of about 22% for Flour Mills.
Considering its Book Value of N47.78, relative to its share price of N27, Flour Mills of Nigeria is considered cheap and has uptrend potential.
Currently trading at N142.60, the share price of Presco with a year high of N200 and year low of N73.
There is an uptrend potential of 28.7% in the share price of Presco, relative to its 52 weeks high of N200.
Currently trading at N80, the share price of Guinness has touched a high of N110 and a low of N29.05 in the past 52 weeks.
Guinness has an uptrend potential of 27.3%, relative to its 52 weeks high of N110.
The share price of Nigerian is currently trading at N47.15 and it has touched a high of N78.5 and a low of 39.9 in the past 52 weeks.