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Tuesday, June 25, 2024

Top Stock Picks of the Week: Mutual Benefits, UBA, and Ecobank Lead the Way

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Last week, Nigerian stocks reported their first weekly depreciation this year, dropping 2.5 per cent, as investors reaped accumulated gains on some stocks that have fairly appreciated.

The market saw a lull in earnings releases during the week, allowing investors to absorb a flurry of corporate results that marked the two preceding weeks.

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Even though the bulk of financial results have been issued, there are strong indicators that the market is yet to see possibly its biggest driver this quarter.

Heavyweights like Dangote Cement, MTN Nigeria, BUA Cement, Seplat, Nestle and the Big 5 banks (excluding FBN Holdings) are yet to publish their financials, which are likely to set the tone of the market in the days ahead.

PREMIUM TIMES has assembled some stocks with fundamentals and other potential, adopting key analytical approaches to save you the hassle of randomly picking equities for investment.

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The selection, a product of analytical market watch, offers a guide to entering the market and taking strategic positions in hopes that equities will gain value over time, particularly in the short term.

This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before making investment decisions.

Mutual Benefits Assurance

Mutual Benefits Assurance tops this week’s pick for trading significantly below its intrinsic value.

The underwriter’s price-to-earnings (PE) ratio is presently 2.8x, while its price-to-book (PB) ratio is 0.4x.

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United Bank for Africa (UBA)

UBA appears in the pick for currently trading below its intrinsic value. The lender’s PE ratio is 1.7x, while its PB ratio is 0.5x.

Ecobank Transnational Incorporated (ETI)

ETI makes the list for trading well below its real value, brightening its chances of significant price appreciation in future. The PE ratio of the company is 1.5x, while its PB ratio is 0.4x.

Fidelity Bank

Fidelity Bank makes the cut for trading below its real value. The lender’s PE ratio is 2.6x, while the PB ratio is 0.9x.

Access Holdings

Access Holdings makes this week’s pick for currently trading significantly below its real value. The PE ratio of the financial services group is presently 3.3x, while its PB ratio is 0.6x.

Learn Africa

Learn Africa makes this week’s selection for trading well below its real value. Its PE ratio is currently 5.1x, while the PB ratio is 0.7x.

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