UACN, Access Holdings, Cornerstone Insurance top stock picks this week

Nigerian stocks fell more sharply than the previous week last week amid a market correction that saw a relatively weak investor appetite let out the bears on equities.

The flurry of dividend declarations the market witnessed a couple of weeks ago is beginning to wane, with the earnings season now inching near its close.

One notable dividend announcement, however, was the declaration by oil palm giant Presco, which has a reputation for good payout, to hand shareholders 72.8 per cent more dividend to shareholders, compared to last year.

Analysts at United Capital had said in their outlook for the week that “The equities market is expected to improve marginally as investors continue to take position for the FY-2024 earnings season and possible corporate action declarations.”

“Nevertheless, given the elevated interest rate environment in the fixed-income market, we still expect bearish sentiments to linger in the background,” they added.

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 in hopes 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 making investment decisions.

UACN Plc

UACN tops the list this week for trading significantly below its intrinsic value, raising its prospects of good price appreciation in future. The price-to-book (PB) ratio of the conglomerate is 1.2x, while the price-to-earnings (PE) ratio is 5.5x. Its relative strength index (RSI) is 16.5.

Access Holdings

Access Holdings makes the cut for currently trading well below its underlying and book value. The banking group’s PB ratio is 0.3x, while the PE ratio is 0.3x. Its RSI is 24.3.

Cornerstone Insurance

Cornerstone appears on the list for trading significantly below its intrinsic and book value. The insurer’s PB ratio is 0.9x, while its PE ratio is 2.3x. The RSI is 28.6.

First HoldCo

First, HoldCo makes this week’s list for trading below its book and underlying value. The lender’s PB ratio is 0.4x, while the PE ratio stands at 1.2x. Its RSI is 33.

Sovereign Trust Insurance

Sovereign Trust Insurance appears on the pick for currently trading below its underlying and book value. The PB ratio of the underwriter is 0.7x, while the PE ratio is 5.1x. Its RSI is 43.3.

NPF Microfinance Bank

NPF Microfinance Bank features in this week’s pick for trading below its intrinsic and book value. The PB ratio of the micro-lender is 0.9x, while its PE ratio is 6.5x. The RSI is 42.