Top Stock Picks for This Week: Ecobank, Cornerstone Insurance, Africa Prudential

Last week, Nigerian stocks dropped by 1.2 per cent, even with more trading happening. All sector indices went down, with consumer goods leading the decline.

Trade volume hit 12.2 billion shares, compared to 5.4 billion shares a year ago.

"Given the market’s strong year-to-date performance, we expect investors to choose carefully. Profit-taking in stocks that have gained a lot could limit how much the market goes up," analysts at Meristem Securities said in their weekly outlook.

"Dividend expectations could also support stocks, especially for Tier-1 banks, where dividend yields look good," they added.

Positioning for half-year earnings season may continue this week. Corporate results from four of the Big 5 banks and some other companies are still pending.

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

The selection comes from a careful market analysis. It shows a way to enter the market and take smart positions. The hope is that the chosen stocks will see good price growth over time.

This is not a buy, sell or hold recommendation but a guide for stock investment. You should talk to your financial advisor before making any investment decisions.

Ecobank Transnational Incorporated (ETI)

ETI is at the top this week because of its strong fundamentals and because it is trading below its actual value. The banking group’s net profit ratio (NPR) is 79 per cent, and its price-to-earnings (PE) ratio is 3x. The 14-day relative strength index (RSI) is 29.4.

Cornerstone Insurance

Cornerstone Insurance is included for its strong fundamentals and for trading near its 52-week low. The NPR of the insurer is 33.3 per cent, and the PE ratio is 8.4x. The 14-day RSI is 39.6.

Africa Prudential

Africa Prudential makes the list due to its solid fundamentals and for trading close to its 52-week low. The NPR of the company is 45.2 per cent, while the PE ratio is 15.5x. The 14-day RSI is 37.2.