Cornerstone Insurance, Vitafoam, Fidelity Bank top stocks to watch this week

Nigerian stocks are seeing a return of strength, spurred by much-increased activity on the demand side, which led activity in the market to improve by 257.9 per cent and the yield on stocks since the year started by 2 per cent after four weeks of consecutive declines.

A myriad of companies turned in their first-quarter results in the week that just went by, some of them out significantly strong, apparently the stimulus for the boom in the trade volume reported in the week.

Currently 0.2 per cent, the year-to-date yield on stocks is among the lowest so far since the start of the year, having peaked at 8.9 per cent in the week to 10 March before diminishing returns began to set in.

This week, the centre of interest for big players like portfolio managers and institutional investors will likely be the financials of large-cap companies as they hit the market and the potential they hold for investment. Companies which have announced strong dividends whose qualification dates are yet to expire might court some investors too.

PREMIUM TIMES has assembled a number of stocks with fundamentals and other potentials, adopting key analytical approaches to save you the hassle of randomly picking equities for investment.

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READ ALSO: Nigerian bourse shed N15 bn amid fall industrial goods stocks

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The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will gain value with the passage of time, particularly in the short term.

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

CORNERSTONE INSURANCE

Cornerstone Insurance tops this week’s pick for declaring, for the first quarter of the year, eight times the net profit it reported a year earlier. The underwriter announced a post-tax profit of N778.5 million for the period, compared to the N78 million reported for the same period of 2022.

Its price-to-earnings (PE) ratio was 4.6x as of the end of the last trading session, while its earnings per share (EPS) is N0.14.

VITAFOAM

Vitafoam features on this week’s stock selection on the twin strength of trading close to its 52-week low and also for trading below its intrinsic value, both boosting its potential for price appreciation in the near term.

The company’s present PE ratio at the last trading session was 4.9x, while the EPS is N3.46.

FIDELITY BANK

Fidelity Bank appears on this week’s selection for recording a jump of 64.1 per cent in earnings, bringing net profit to N15.6 billion at the end of Q1 2023.

The lender’s PE ratio at the market close on Friday was 3.7x, while the EPS is N1.52.

DANGOTE SUGAR

Dangote Sugar features on the pick this week for reporting a 44.3 per cent leap in profit after tax to N8.9 billion for the first quarter. The firm’s PE ratio as of Friday was 4.3x, while the EPS is N4.51

WEMA BANK

Wema Bank makes this week’s selection for posting an 88.4 per cent increase in after-tax profit for the first quarter.

The company’s PE ratio at the last trading session was 4.3x, while its EPS is N0.90.

JAIZ BANK

Jaiz Bank makes the cut for declaring a profit after tax of N1.6 billion for the first quarter, 44.6 per cent higher than a year ago.

The PE ratio of the bank at the end of the last trading session was 4.8x, while its EPS is N0.20.

UNION BANK

Union Bank appears on the pick this week for more than doubling its profit for Q1 to N12.4 billion. The PE ratio as of Friday was 7x, while the EPS is N1.