NNFM, FBN Holdings, Ikeja Hotel top stock pick this week

This is not a buy, sell or hold recommendation but a stock investment guide.

Nigerian stocks have added 30.8 per cent this year, highlighting the resilience of the equities at a time when foreign inflows into the market remain markedly low, compared to pre-pandemic levels.

NGX 30, the index that tracks the 30 top companies on the Nigerian bourse by market value and liquidity, has itself returned 31.9 per cent year to date. It is now just a breath away from drawing level with Nigeria’s inflation, which is near its 30-year high.

“The equities market is expected to retain its buy interest as investors cherry-pick undervalued stocks. However, given the high interest rates in the fixed income and money markets, we expect some bearish undertone to persist in the equities market as fixed income biased investors take advantage of the high yields in the fixed income space,” analysts at United Capital said earlier in the week.

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

The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will increase in value 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.

Northern Nigeria Flour Mills (NNFM)

NNFM tops this week’s pick for currently trading significantly below its intrinsic value and close to its lowest price in 52 weeks, brightening its chances of strong price appreciation in the future.

The company’s price-to-earnings (PE) is 3.9x, its relative strength index (RSI) is 29.1 and its price-to-book (PB) ratio is 0.6x.

FBN Holdings

FBN Holdings makes the cut for trading below its intrinsic value. The PE ratio of the lender is 1,5x, while its RSI is 38. Its PB ratio is 0.4x.

Ikeja Hotel

Ikeja Hotel appears on the list for trading close to its 52-week low. The company’s PE ratio is 2.6x, while its RSI is 56.4. Its PB ratio stands at 0.9x.

Veritas Kapital Assurance

Veritas Kapital makes this week’s list for currently trading below its underlying value. The insurer’s PE ratio is 2x, and its RSI is 33.8. The underwriter’s PB ratio is 0.9x.

Cornerstone Insurance

Cornerstone appears in the pick for currently trading below its intrinsic value. Its PE ratio is 1.8x at the moment, while its RSI is 48.8. The PB ratio of the insurer is 0.8x.