PRICE MOVEMENTS ARE NOT UNIDIRECTIONAL
Prices of equities are not unidirectional objects. The uniqueness of equity investment is the unpredictable nature of prices to precision. No matter who you are, what you think you know as an expert or size of your funds, Mr Market has its own mind. You can manipulate for a while but the market will sure go against you and bring you down to your kneel some day.
PANIC IS DANGEROUS
If you panic when you see prices of equities down, you don’t belong. Please sell all that you own in stocks and keep in money market funds. Panic is an infectious disease in the stock market, the moment it is allowed; it crumbles the market even in the face of excellent performances from quoted companies. If you must win in stocks, you’ve got to be bold!
PROBABLE MARKET DIRECTION THIS WEEK
- Major percentage gainers most likely will remain low cap stocks. Please note that percentage gains are most achievable when stocks are still largely undervalued and price, cheap or low. When prices become high, future possibilities would have been built into it such that will make current appreciation, slim.
- Last week Friday’s closing bid and offer sizes with matching prices are more or less within same range. A cursory analysis of numbers point to a possible positive market open on Monday.
- In the market, anything is possible. Further price shed as witnessed last week is bound to slow down this week.
- High cap stocks will largely oscillate.
STOCKS TO WATCH FOR THE WEEK
- ACCESS BANK PLC
The board meeting to review its 2017 audited account and also authorise a cash dividend payment holds this week. Going by previous records, barring any delay from the apex bank- CBN, Access’ audited result is expected in the market early March. 40kobo final dividend was paid last year; 25 kobo interim has been paid already at 2017 half year. Possibilities at 2017 Q3 is enormous with N1.94 earnings. Full year EPS above N2 will sure make current price of Access a bargain. Investing in the stock of Access Bank Plc will require a measure of waiting. If you are looking for a quick win, look somewhere else. Closing last week with a marginal 1.83% and slightly above 53,000 offer size with just about 8000 bid size, Monday open might be sluggish but stability is expected within the week.
Though the market has a mind of its own, potential price direction could change but for this week, odd for sure favours Afriprud to inch up in price. The assertion is premised on the fact that most indicators are looking comfortably up.
Closing with marginal 2.2% growth with over 260,000 units extra bid size Friday suggests a sharp open Monday though week could go any way. Its EPS progression makes the stock attractive- from 41 kobo 2016 Q3 EPS to 51 kobo full year EPS as at December 2016 and to 61 kobo at 2017 Q3 despite a price range of N4.65 or 7.62 P/E Ratio at 2017 Q3 EPS and current price, any full year EPS above 80kobo makes the stock a bargain at current price. Notably, shareholding distribution makes Afriprud’ float low. Sharp price decline is not at any time expected.
- CHAMPION BREWERIES PLC
A number of investors had taken position in the stock for majorly one reason; that Nigerian Breweries will one day buy in. Currently, such expectation might be in the offing though not officially stated, Heineken being the connecting factor. The company’ 2017 Q3 earnings experienced a leap to 0.0084kobo from 0.0023kobo in the preceding year. Both earnings are damn weak for current price. it infers therefore that future expectation is already inbuilt in the stock. Further price growth without commensurate increase in earnings might make the stock risky. Even NB Plc will be buyig the company over, at what valuation? Price may rally anywhere but buyers should beware.
- C & I LEASING
The decline of 1.3% last week only makes the stock the more buyable because virtually all indicators are depicting the fact that price is largely within buyable range. 2017 Q3 EPS of 50 is attractive at current price of N1.55. its P/E Ratio of 3.1 based on 2017 Q3 EPS of 50kobo at current price of N1.55 makes the stock very attractive. Closing last Friday with 1.332 million units excess bid size sure means bright open for this week.
While many insurance companies stand to suffer terrific price shed in response to pricing rules of the Nigerian Stock Exchange, Contisure, closing with a bid of 600,000 Friday makes this week open looks bright. 2017 Q3 24 Kobo EPS or a P/E Ratio of 6.04 makes the stock looks attractive added to the fact that indicators are within buyable range.
- CUSTODIAN AND ALLIED
A number of technical tools are indicting a buy signal for the stock. Closing with 230,731 units excess bid makes Monday’s opening performance potentially positive. 76kobo 2017 Q3 earnings is good enough to make the stock a buy and hold recommendation more so as the Q3 2017 was higher than its 2016 full year EPS. P/E Ratio at the Q3 2017 EPS and current price is 5.17. This makes the stock looks cheap.
- DIAMOND BANK PLC
The stock led the market in percentage loss last week when it went down in price by slightly above 26%. Though it lost marginally Friday to complete a cycle, closing with excess bid size of over 5 million units is an indication that Monday of this week will most likely open strong. Current price brings P/E Ratio to well over 10 at 25 kobo 2017 Q3 EPS. If its 2017 audited report does not come with significant growth in earnings, current price might need further down adjustment.
- FBNH PLC
The stock closed last trading session of last week with a bid size of 188,750. Though this is nothing when compared with volume that the stock often commands but then, it is an indication of a less stressful open for the week. With a YtD price growth of over 54%, FBNH yet looks good for further growth on charts. In earnings, the stock has been compensated well enough such that EPS in the audited report must of necessity grow significantly to justify current price of N13.63 which brings P/E Ratio to 10.65 based on N1.28 2017 Q3 EPS.
- FCMB PLC
106% is the YtD return in the stock. Slowing down for four out of the five trading sessions last week was necessary. It however closed Friday with 53,000 units excess bid size. 8.27 is the current P/E Ratio based on 30kobo 2017 Q3 EPS and current price of N3.06. any further price increase without commensurate possibilities in its 2017 audited report being expected in the market makes the stock high.
- HONEYWELL FLOUR
410, 000 was the closing bid size last Friday after four days of losses and one day of gain trading week. On charts, the stock looks buyable at current price. In earnings, P/E Ratio based on 2017 Q2 EPS of 28 kobo at current price makes the stock slightly buyable.
- LIVESTOCK FEEDS:
793,993 closing bid size on Friday makes Monday open looks possibly positive. The price actually began a recovery journey last week Thursday. The stock as at 2017 Q3 was in losses. If this is sustained till full year result being expected, buyers would need to beware.
OTHER STOCKS TO WATCH FOR THE WEEK
- May and Baker
- OANDO- Issues settled with petitioner. Continuity of SEC probe doubtful
- TRANSCORP- Tremendous closing bid size of 9.501 million units
- WAPIC- New deal with NFF