- Stocks to watch
We are finally in the Second Half of the year 2022 and precisely the Third Quarter of the year. Market performance in the first half of the year 2022 to a large extent was quite impressive as the All Share Index of the Nigerian Exchange returned 21.31%.
The Second Quarter results of listed companies will start hitting the market by the second week in July 2022.
Capital market experts have projected a positive outlook for the market in the month of July and in general for the Third Quarter of the year.
Commenting on market expectation for the month July and Q3 2022, the Managing Director of Global View Capital Limited, Aruna Kebira stated thus:
“The market will look up in the month of July. Going by Q1 results of company, even when we know that there are issues getting raw materials; as far as most of the cost can be pushed to the final consumers, the companies will be able to report good Q2 results just like in Q1. It is actually the final consumers that will suffer it. That is why we have inflation. Especially for goods that are price inelastic or that have zero elasticity, they will be able to break even.
Most of the company will be able to return as much as they returned in Q1 and the market will begin to appreciate them to that level. Even if prices did not rise like what happened in Q1 and Q2, but the market will recover from what we have seen in the past one month.
You can see that in the second to the last and the last day of June, the market began to gain. Even if it is marginal, it has entered into the gaining mode. This is how Q3 is going to be like. The market will be up in Q3. We should expect uptrend in July, as investors will start taking position, especially for stocks that will pay interim dividend. People will also take position in stocks that have good outing Q1 because there will be that expectation that the outing will be good in their Q2 result”.
STOCKS TO WATCH
We have always advised that investors to take position in fundamentally sound stocks as they stand the test of time. As the market is anticipating the release of Q2 results, the best strategy is to take position before the release of these results.
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 N9.40. In the past 52 weeks, the stock has touched a high of N10.60.
Based on the impressive Q1 result of the bank and past Q2 earnings history of the financial institution, Q2 2022 earnings of Access Holdings is expected to grow beyond the previous year’s record.
With the Book Value of N30.84, Access Holdings is considered very cheap, relative to its current share price of N9.40.
The share price of FBHN is currently trading at N11.60. The price in the past few weeks actually dropped to as low as N8.40 precisely June 21, 2022 when Femi Otedola shed some of his holdings in the Company. Between now and then, it has gained 38.1% in the past two weeks.
Within the last 52 weeks, the share price of the big elephant has touched a high of N12.90, without doubt, there is uptrend potential in FBNH.
With the Book Value of N24.51, relative to its current price of N11.6, FBNH is underpriced.
UBA is currently at N7.40 with a 52 weeks high of N8.85. It is trading 16.38% away from its 52 weeks high of N8.85.
With good outing in their Q1 earnings, UBA is expected to return a positive Q2 2022 result to the market
Considering its Book Value of N24.14, relative to its share price of N7.40, 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 N21.85
In the last one year, the share price of the financial institution has touched a high of N27.50 and a low of N21.25.
It is trading 20.55% away from its 52 weeks high of N27.50, which implies an uptrend potential of 20.55% for the share price of the bank.
Going by its Book Value of N42.37, relative to its current price of N21.85, Zenith Bank is very cheap and embedded with growth potentials.
The share price of GTCO is currently at N20.45 and it has touched a high of N30 and a low of N20.40 in the last 52 weeks.
It is trading 31.83% away from its year high of N30, which implies an uptrend potential of 31.83% for GTCO.
The Book Value of N30.88, relative to the current price of N20.45 is a confirmation that GTCO is underpriced.
Currently trading at N165, the share price of Presco got to a year high as N200 in May 12, 2022.
There is an uptrend potential of 17.5% in the share price of Presco, relative to its 52 weeks high of N200.
Based on the past growth trajectory of the company, the Q2 2022 earnings per share of Presco is expected to grow beyond the previous year record.
The share price of Nigerian is currently trading at N58.8 and it has touched a high of N78.5 and a low of 39.9 in the past 52 weeks.
It is trading 25.1% away from its 52 weeks high of N78.5, suggesting an uptrend potential of 25.1% for Nigerian Breweries.
Currently trading at N90.50, the share price of Guinness has touched a high of N110 and a low of N29 in the past 52 weeks.