NPF Microfinance Bank, AIICO, Kapital Insurance top stocks pick this week

Nigerian stocks declined by 0.2 per cent last week following profit-taking activities in industrial goods stocks.

The main stock index has yielded more than 30 per cent since the beginning of the year, with oil and gas stocks leading other sectors, returning as much as 133.1 per cent.

“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 the investment bank United Capital had forecasted earlier in the week.

“Fund managers and businesses may begin to entertain mid-long-term (≥6 months) investment objectives, cherry-picking only sound equities with strong fundamentals and ongoing corporate actions,” they added.

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 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.

NPF Microfinance Bank

NPF Microfinance Bank tops this week’s pick for trading well below its intrinsic value. The price-to-book (PB) ratio of the microlender is presently 0.7x, while its price-to-earnings (PE) is 10.4x. Its relative strength index (RSI) is 37.8.

AIICO Insurance

AIICO makes the cut for currently trading below its intrinsic value. The insurer’s PB ratio is currently 0.7x, while the PE ratio is 2.5x. Its RSI is 52.6.

Veritas Kapital Assurance

Veritas Kapital makes this week’s list for trading well below its intrinsic value, making it a potentially strong investment for value investors. The underwriter’s PB ratio is 1x, while its PE ratio is 2.2x. Its RSI is 43.4.

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NASCON

NASCON makes this week’s pick for trading significantly below its intrinsic value. The manufacturer’s PB ratio is 2.2x, while its PE ratio is 6.9x. Its RSI is 27.9.

Fidson

Fidson features on this week’s list for currently trading below its intrinsic value. The drug maker’s PB ratio is 0.3x, while the PE ratio is 9.6x. Its RSI is 29.5.

Custodian Investment

Custodian Investment appears in the pick for currently trading well below its innate value.

The PB ratio of the company is 0.6x at the moment, while the PE ratio is 1.3x. Its RSI is 36.1.