Transcorp, BUA Foods, NEM Insurance top stock pick this week

This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.

Nigerian stocks advanced at a quicker pace last week, shaking of the tepid market sentiment of the preceding week, when gains were generally flattish, as the benchmark index rose in this case by 1 per cent. Increased buy pressure on bank stocks drove the jump.

“While some short-term pullbacks may occur, we believe the underlying positive drivers, ranging from dividend momentum to robust liquidity—will continue to outweigh downside pressures, keeping the market on track to close the week higher,” analysts at Meristem Securities said in a note to investors last week.

Looking ahead, investors’ interest is likely to shift more this week and in the near term to fundamentally strong equities, especially undervalued stocks offering attractive dividends.

PREMIUM TIMES has assembled some stocks with sound fundamentals, adopting rigorous approaches to save you the risk of picking equities at random for investment.

The pick, a product of an analytical market watch, offers a guide to entering the market and taking strategic positions, with the expectation that selected stocks will record reasonable price appreciation with the passage of time.

This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.

Transcorp

Transcorp tops this week’s list for the twin factors of its strong fundamentals and for trading below its intrinsic value.

The net profit ratio (NPR) of the conglomerate is 25 per cent, while the price-to-earnings (PE) ratio is 5.5x. Its relative strength index (RSI) is 37.8.

BUA Foods

BUA Foods appears on the pick on the basis of its robust fundamentals. The NPR of the food company is 29.2, while the PE ratio is 27.8x. The RSI is 30.8.

NEM Insurance

NEM Insurance makes the selection by virtue of its strong fundamentals and for trading under its intrinsic value. The insurer’s NPR is 36.2 per cent, while the PE ratio is 6.7x. Its RSI is 36.2.

Mecure Industries

Mecure Industries makes the cut for its strong fundamentals. The NPR of the pharmaceutical company is 36.5, while the PE ratio is 38.1x. Its RSI is 0.

Vitafoam

Vitafoam makes the pick for its strong fundamentals. The company’s NPR is 14.1 per cent, while the PE ratio is 11.7x. The RSI is 44.7.