Stock Picks for the Week: Zenith Bank, MTN Nigeria, AXA Mansard Lead the Way

After two weeks of losses, Nigerian stocks bounced back last week. The market capitalisation went up by 0.8 per cent due to stronger buying activity.

The oil and gas sector boosted this positive performance. Seplat Energy saw significant gains, unlike the previous week when it performed poorly among the five sector indices.

This shows that investors are getting more interested in energy stocks. The rise in crude oil prices, especially with the ongoing US-Israel tensions involving Iran, is encouraging for producers.

The positive market sentiment comes from the impressive revenue growth and, in some cases, profit increases that oil companies reported for the half-year, both locally and globally.

Looking ahead, there are high hopes this week. Nigeria’s recent reclassification as a frontier market by FTSE Russell and its upgrade from stable to positive by Moody’s could push stocks even higher.

PREMIUM TIMES has put together a list of stocks with solid fundamentals. This is to help you avoid the risk of picking stocks randomly for investment.

The selection is based on careful market analysis. It provides guidance on how to enter the market and take strategic positions. The expectation is that these selected stocks will increase in price over time.

This is not a buy, sell, or hold recommendation. You should consult your financial advisor before making any investment decisions.

Zenith Bank

Zenith Bank is at the top of this week’s list due to its strong fundamentals and because it is trading below its true value. The bank’s net profit ratio (NPR) is 21.8 per cent, while its price-to-earnings (PE) ratio is 4.8x. The 14-day relative strength index (RSI) is 55.2.

MTN Nigeria

MTN Nigeria is included for its solid fundamentals. The telecom company has an NPR of 21.9 per cent, while its PE ratio stands at 11.6x. Its 14-day RSI is 28.8.

AXA Mansard Insurance

AXA Mansard Insurance makes the list due to its strong fundamentals and because it is trading below its true value. The insurer’s NPR is 3.4 per cent, and its PE ratio is 29.8x. The 14-day RSI is 49.6.