GTI 5 Weekly Stock Picks for the Week 08/02/ 2016 -15/02/2016
UBA claims the top spot on the table this week. The bank has shown some consistency since the beginning of this year. We were particularly concerned about the bank’s capital adequacy in the past, but are impressed by the progressive growth in the bank’s shareholders fund since the beginning of the year
Dangote Cement climbs to the second spot on the GTI 5 for this week, after strong gains recorded last week. The company controls about 80% of the cement market in Nigeria and has made major in routes into other African countries. The recent announcement of a slash in cement price as well as the tightening margins due to the tax element on some of its production lines which previously enjoyed the 5-year moratorium for expansion projects (including the economic parameters which has generally affected the market) has increased the stocks volatility in the recent past. However, our long term estimates for the firm are still realizable for its share market dominance.
Zenith Bank retains the third spot this week. The top tier lender has shed some value following the bearish sentiments that has prevailed over the Nigerian capital market. Julius Berger drops to the fourth spot on the top 5 this week. The focus on infrastructure in Nigeria to help jump start the economy in 2016 is a major incentive for stocking up on the shares of
Julius Berger. We expect increased business activities in the construction sector in 2016 and we expect that this will translate to a boost in the company’s income.
GT Bank claims the fifth spot this week. The bearish trend in the market has opened up a good entry window for the stock.
NSE Ticker *Current Price(N) Investment Horizon Fair Value/Exit Price(N) Expected Returns (%)
1. UBA 2.82 12 Months 6.09 115.96%
2. DANGCEM 124.30 12 Months 230.2 85.20%
3. ZENITH 12.83 12 Months 22.5 75.37%
4. JBERGER 41.50 12 Months 72.18 73.93%
5 GUARANTY 15.99 12 Months 27.21 70.17%
*Current Price as at 08/02/2015