Linkage Assurance, Zenith Bank, Ikeja Hotel top stock picks this week

Nigerian stocks continue to show tough resilience, with equities cumulatively recording a positive yield over the weeks since the central bank increased the benchmark interest rate in May. This increase ordinarily would have lured investors away from stocks to fixed-income assets offering improved return on investment.

Market activity is currently at its strongest in years, with trade volume averaging 2.2 billion shares weekly in the past four weeks.

This suggests that the long period of depressed trade that followed after the COVID-19 pandemic is over.

This week, the equity market is on track to witness a bulge in activity beyond secondary market trade as Access Holdings, Nigeria’s biggest lender, kicks off its rights issue where 17.8 billion shares are on offer.

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 an analytical market watch, offers a guide to entering the market and taking strategic positions in the hope that equities will increase in value over time.

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

Linkage Assurance

Linkage Assurance tops this week’s list for the twin factor of declaring a 1 for 10 bonus for the full year 2023 and for currently trading well below its intrinsic value. The underwriter’s price-to-book (PB) ratio is 0.6x, while the price-to-earnings (PE) ratio is 3.5x.

Zenith Bank

Zenith Bank makes the cut because it is currently trading below its real value. The lender’s PB ratio is currently 0.4x, while the PE ratio is 1.4x.

Ikeja Hotel

Ikeja Hotel appears in the pick for trading significantly below its actual value, boosting its chances of strong price appreciation in the future.

Its PB ratio is 0.6x, while the PE ratio is 2.7x.

UAC of Nigeria Plc (UACN)

UACN appears on the list for trading significantly below its real value at the moment.

The conglomerate’s PB ratio is 0.8x, while its PE ratio is 2.8x.

Julius Berger

Julius Berger makes this week’s list because it is trading below its current real value. The company’s PB ratio is 0.96x, while the PE ratio is 6.9x.

NPF Microfinance Bank

NPF Microfinance Bank features on this week’s pick for currently trading below its intrinsic value. The PB ratio of the company is presently 0.9x, while its PE ratio is 6x.