Why you should pitch your tent with fundamentally strong stocks

Wole Olajide

Prices of stocks on the Nigerian Exchange last week continued its southward journey, shedding 1.04% week on week.

Year to date, the market has returned 0.20%, dropping from 8.89% being the highest return as at February 28, 2023.

Most stocks have released their Audited reports with dividend declarations for the year end 2022. Prices have been adjusted for quite a number of stocks to accommodate for the dividend payout, bringing their prices lower. Profit taking activities by investors have also brought prices of stocks lower, thereby creating new entries opportunities for discerning investors.

We have always advised investors to take position in fundamentally sound stocks because they stand the test of time. Just to mention a few, the following stocks can be considered for strategic entry:

ACCESS HOLDINGS

Access Holdings Plc declared a mouthwatering final dividend of N1.30 for 2022 year end.

Currently trading at the share price of N9.90. In the past 52 weeks, the stock has touched a high of N10.35 and a low of N7.50.

Though, it is trading close to its 52 weeks high of N10.35, Access Holdings has the potential to surpass its year high, based on its strong fundamentals.

With P/E ratio of 2.31% and earnings yield of 43.25%, Access is good BUY.

A position in Access Holdings will give dividend yield of 13.13%.

With the Book Value of N34.64, Access Holdings is considered very cheap, relative to its current share price of N9.90

ZENITH BANK

Zenith Bank closed last week at N21.95. In the past 52 weeks, the price has touched a high of N27 and a low of N18.9.

It is trading 18.7% away from its 52 weeks high of N27, which implies an uptrend potential of about 19% for the share price of the bank.

Going by its Book Value of N43.92, relative to its current price of N21.95, Zenith Bank is very cheap and embedded with growth potentials.

GTCO

GTCO is currently trading at N25 and it has touched a high of N27.05 and a low of N16.80 in the last 52 weeks.

It has uptrend potential of 8.2% relative to its 52 weeks high of 27.05.

Considering its Book Value of N32.64, relative to the current price of N25 implies that GTCO is underpriced.

UBA

UBA is currently trading at N7.85 with a 52 weeks high of N8.9 and a low of N6.55. It is trading 11.8% away from its 52 weeks high of N8.9, implying an uptrend potential of about 12% for UBA.

Considering its Book Value of N26.96, relative to its share price of N, UBA is underpriced. A position in UBA has uptrend potentials.

FBNH

First Bank of Nigeria Holdings is yet to publish its Audited Report of 2022 year end.

Currently trading at N11.20, the price has touched a high of N12.4 and a low of N8.20 in the past 52 weeks.

 It is trading close to its year high of N12.40, and has the capacity to surpass it as the stock is trading below its fair value.

With the Book Value of N24.89, relative to its current price of N11.2, FBNH is underpriced and has uptrend potential.

FLOUR MILLS

Flour Mills is currently trading at N29.7 with a 52 weeks high of N41.45 and a low of N27.

It is trading 28.35% away from its 52 weeks high of N41.45, implying an uptrend potential of about 28% for Flour Mills.

Considering its Book Value of N48.39, relative to its share price of N30.30, Flour Mills of Nigeria is considered cheap and has uptrend potential.

PRESCO

Currently trading at N150.8, the share price of Presco has a year high of N200 and year low of N110.

The market is expecting dividend declaration from Presco and this is capable of pushing the price forward.

There is an uptrend potential of 24.6% in the share price of Presco, relative to its 52 weeks high of N200.

OKOMU

Currently trading at N183.5, the share price of Okomu has a year high of N216.9 and year low of N153.9.

The company declared a final dividend of N12 for 2022 year. This is in addition to the already paid interim dividends of N7 and N2 for June and September 2022 respectively. Altogether, shareholders in Okomu will get a total dividend of N21 for 2022 financial year.

There is an uptrend potential of 15.4% in the share price of Okomu Oil, relative to its 52 weeks high of N216.9.